The need to increase financing for the native families and the tribe to own homes and improve their living standards led to the establishment of the HUD 184 loans. Besides, it was aimed at protecting the private lenders who were not allowed to seize the native property should one default, since they are held in trust by the United States. This created harmony and has since helped many own homes.
Before you go to apply for a loan, it is I order to understand the type of loans you can get under this program. The idea was to access finance for home ownership excluding other investments. The good thing is that this piece will not only help you know the loan you can go for but also the documents that will typically be required from you.
Loan for purchase
One of the purposes of the Section 184 loan is buying a home. This applies to both on or off the reservation. If you are eligible for the loan, it will not matter where you live at the moment; you will be able to get one for purchasing a home. The HUD 184 loans is similar to the FHA loan only that this is cheaper and more flexible.
Some of the required documents:
- Proof that you belong to the tribe
- Copies of your ID and the social security card
- Previous three months’ bank statements
- Contact information from landlord for rental verification
- Purchase agreement
Cash Out Refinancing loan
This is used for the consolidation of debt from the equity of your home. The Section 184 loan allows for borrowing up to 85% of the current appraised value of the home. You will receive cash to settle your debts and may also receive a maximum cash in hand of $25,000 at closing.
Some of the required documents:
- Proof that you belong to the tribe
- Copies of your ID and the social security card
- Previous three months’ bank statements
- Most recent check of per capita income and two years 1099
- The deposit for new appraisal
Streamline Refinancing loan
Maybe you are seeking to reduce the term of your current loan or cutting the rate of interest you are paying, Section 184 loans can help you with that. The streamline financing loan is easy to acquire since you need no appraisal or income and asset verification. All you have to show is that you have been paying your mortgage on time for the past one year.
Some of the required documents:
- Proof that you belong to the tribe
- Copies of your ID and the social security card
- Copy of your current mortgage and note
Construction loan
Another thing you can do with the Section 184 loans is to construct your home right from scratch to completion. The flexibility of the financing is ideal for building stick, modular or manufactured home to settle your family. Furthermore, you can get the lending for restoration, renovation, remodeling, and expansion of your already existing home.
Besides the common documents mentioned before, you will be required to provide a building contract, specifications of the new house, and an itemized line budget.
