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HUD 184 may close 1,000 mortgages

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WASHINGTON -- The Department of Housing and Urban Development is on-track
to close 1,000 mortgages to American Indians this fiscal year, the
department's top official told the National Congress of American Indians.

HUD Secretary Alphonso Jackson also told the NCAI's annual legislative
meeting that the Bush administration has proposed increasing the amount it
will commit to back the HUD 184-guaranteed Indian mortgage for fiscal year

Jackson told the Native leaders that the HUD 184 is on pace to close 1,000
loans for $120 million in mortgage finance this year.

The $2 million increase in extra guarantee money called for in the FY '07
budget would double the guarantee authority under the HUD 184 program to
$250 million.

Since the program's inception in 1994, the HUD 184 has guaranteed more than
2,800 loans for $300 million in mortgage finance, HUD said.

Jackson said the expanded guarantee money was part of Bush's program to
create 5.5 million additional homeowners by the end of this decade. HUD
will play "a vital role" in adding Natives to this tally, he said.

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The HUD 184 guarantees 100 percent of a lender's outlay on American Indian
mortgages. It can be used for new homes, existing homes, rehabilitations or
refinancings. Lenders can also package it into mortgage-backed securities
guaranteed by the Government National Mortgage Association.

The HUD 184 is by far the most successful government home loan program for
Indians, outstripping an earlier program, the Federal Housing
Administration Section 248 program, by a wide margin. The Department of
Veterans Affairs has run an Indian veterans' home loan program, and the
Department of Agriculture has had some success targeting Indians through
its Rural Development home loan programs. The BIA does not have a home loan
program per se, but does have a home improvement program for rehabs.

Last year, HUD 184 was expanded off-reservation to include areas with high
numbers of Indians, including the entire state of Florida and such cities
as Phoenix and Albuquerque. Tribes or their designated housing entities
must request the expanded areas.

Jackson also touted HUD's other American Indian loan program, the
less-successful Title VI, to the NCAI meeting.

This program guarantees 95 percent of lender outlays. It is far less used
than the HUD 184 and is generally used to finance infrastructure or
construction on housing projects.

HUD said 2006 has seen its greatest number of applications for Title VI
loans, after improving the program by developing a method to shorten the
processing time.

By far, the biggest Title VI loan has been to the Cherokee Nation of
Oklahoma -- $50 million, designed to construct almost 500 units of housing.