Joaqlin Estus
ICT
ANCHORAGE, Alaska —New Housing and Urban Development (HUD) regulations for a popular Indian housing program are designed to “increase lender participation in the Section 184 Indian Housing Loan Guarantee (Section 184) program, strengthen regulations to meet the program’s growing demands, and ensure that the program will remain a vital resource for Native American families looking to become homeowners for years to come,” said HUD in a prepared statement.
“Homeownership is key to building generational wealth. By enhancing the Section 184 program, we are ensuring homeownership and wealth-building opportunities are available to Native American borrowers,” said HUD Acting Secretary Adrianne Todman.
Miki Adams is the president of CBC Mortgage Agency, an investor that is owned by the Cedar Band of Paiutes in Utah. She said in an email, “the new regulations will bring more clarity and predictability to this important program, and we applaud the Administration for the improvements and their efforts to work closely with Tribal leaders and other stakeholders. There is still more that must be done to modernize the program and we look forward to working collaboratively with HUD on future improvements.”
Tanya Krueger, of the Oneida Nation in Wisconsin, is vice president of Bay Bank, which is owned by the Oneida Nation. She told ICT the new regulations will primarily affect lenders. “(They) have to be able to show the capacity to do the loans and then service the loans if there are servicers as well. So there’s new requirements in that standard. HUD is pushing lenders also to have more requirements that they’re responsible (for) and have more strict guidelines and deadlines of when to submit documents. So it’s putting lenders at more constraints than there are now.” Individual tribal members and tribes will not see big changes, she said.
Krueger said the new regulations still leave a lot of room for interpretation. “The new regulations, yes, are approved, but the new guidebook isn’t out yet. That guidebook is going to be our key to the program, what’s going to be acceptable.”
She said there aren’t significant changes for borrowers, and the program is still a good deal for Native Americans enrolled in a tribe. “The 184 loan program is a great program, especially for first time home buyers. It’s low down payments. There is no private mortgage insurance. I mean, I wish I knew about the program when I bought my house when I was a first time home buyer. I believe in the program. I do outreach for the program because it is a great program and I’m glad to see that they’re making some changes.”
Jeff Tickle, president of Cook Inlet Lending in Anchorage, told ICT, “I think that the new policy guidelines have good intentions in so much as updating the 184 program. I think the spirit is to make it more accessible and beneficial for Native American communities as a whole.”
“Number one,” Tickler continued, “it has a very low down payment requirement of two and a quarter, 2.25 percent, which if you compare that to an FHA loan, which is 3.5 percent or a conventional loan at 5 percent, it requires less money from the borrower upfront. Another big advantage in my opinion, is that the HUD 184 currently does not carry any monthly mortgage insurance…which is a big deal for making monthly payments and keeping that mortgage payment lower than it would be if it did have monthly mortgage insurance.”
“Another big HUD 184 loan (advantage) is that there is no minimum credit score requirement. That doesn’t mean that HUD does not look at credit or patterns of credit. It just means that there is no minimum credit score that’s not going to be a barrier to getting a HUD 184 loan.”
Tickler said lenders who lend on reservation, or trust land, may have different views. “I know that some of the concerns of other organizations was that the new policy included a minimum lending requirement on trust lands for what are called direct guarantee lenders. But the idea, the spirit of that was to encourage those lenders to lend more on trust lands because there are certain lenders across the country that do HUD 184 loans limit their lending on trust lands. And so I think the changes are in good spirit in trying to increase that activity on the trust land.”
Margaret Nelson, who is enrolled in Tlingit and Haida, is a broker with Denali Real Estate in Anchorage. She told ICT another change is that buyers can buy property outside the state where their tribe is located. Before the reg change, “if you wanted to borrow, If you’re an Alaska Native, you could only buy in Alaska… So they’ve widened that, they’ve lifted the boundary restrictions.”
Another positive change, said Nelson, is that the best qualification you could use in Alaska was if you showed a card identifying you as a shareholder in one of the for-profit corporations created under the Alaska Native Claims Settlement Act. “So the whole (new) thing about being able to accept a tribal card is very good. I think that’s great. We do have quite a few Alaska Natives who are not enrolled in a corporation.”
The national housing market has changed due to the effects of COVID-19, according to Fast Expert. People working remotely don’t need to live near their place of employment. So they’ve been leaving crowded, expensive housing markets such as in New York City and San Francisco and been moving to places like Phoenix, Tampa, Miami and Boise, Idaho. Pent up demand after the pandemic and inflation have driven up prices.
“The median sales price of new houses sold in November 2014 was $280,900; the average sales price was $321,800,” according to HUD. “The median sales price of new houses sold in March 2024 was $430,700. The average sales price was $524,800.”
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