The Department of Housing and Urban Development’s Section 184 Indian Home Loan Guarantee Program has backed more than 13,000 mortgages to American Indians, surpassing the $2 billion mark in guaranteed funds to individuals, tribes and TDHEs (tribally designated housing entities).
The HUD 184, which guarantees 100 percent of lender outlays, took 13 years to achieve its first $1 billion in volume but just 25 months to get to $2 billion, a HUD official with knowledge of the program said. The official was hopeful that the pace of lending can increase to $1 billion a year.
The loan program has made 13,149 mortgages to date, said the official, with an average dollar amount of $152,000. Of the $2 billion in credit extended, just 5 percent comes from outside tribal service areas. About 15 percent is on tribal trust or allotted land, the balance of 80 percent is on private property (“fee simple” land) located within the boundaries of reservations, the official said.
He noted the HUD 184 has endured very small delinquency rates compared to other mortgages, about 1 percent. That’s because of quick intervention by the lender, after the loan is 30 days overdue, and by HUD after 60 days overdue. Tribes sometimes intervene to assist delinquent borrowers as well, the official said.
The HUD 184 mortgage was authorized by Congress in 1992 but did not make its first loan until 1995. It superceded an earlier program, the Federal Housing Administration section 247 loan guarantee program which did only small volumes of mortgages.
Funding for the HUD 184 has fluctuated in recent years. The President’s proposed budget for 2012 calls for $7 million to support the HUD 184’s guarantees. That sum would be enough to guarantee nearly half a billion dollars of loans ($480 million) in fiscal 2012, HUD Secretary Shaun Donovan told the recent legislative meeting of the National American Indian Housing Congress in Washington, DC.
The $7 million would allow 2,900 families to buy or rehabilitate a house, he said.
But the 2012 budget request is down from the $9 million authorized for the HUD 184 in fiscal 2009.
For fiscal 2010, which ended last Sept. 30, the HUD 184 saw a volume of $492 million, its best year ever. Six percent of the lending, or $26 million, was done on trust land, while the rest was done on fee simple land, HUD statistics show.
Secretary Donovan told the HUD meeting that the Federal Home Loan Bank of Chicago is making a secondary market for HUD 184s by buying them from lenders. The Government National Mortgage Association also makes a secondary market for them by pooling the loans into Ginnie Mae securities, mortgage-backed securities with credit guaranty by the U.S. government.