One look at society today and you can tell that securing a home for Native Americans is not easy. Most tribal areas and rural districts specifically for Native Americans are not economically strong and this can give them problems when trying to apply for a home loan. Luckily there are home loans for Native Americans that fall under section 184 Program or the housing and development program for Native Americans (and Native Alaskans).
Benefits of a Native American Loan:
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Very Low Down Payments – most down payments for a house has to be at least 15% in order to secure a house loan. A Native American home loan on the other hand can be either 1.25% or 2.25%, depending on the amount of the loan. This makes it much easier and lighter on the pockets for a Native American to fully pay the purchased home.
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No Mortgage Insurance – if the down payment is below 20%, most lenders would require the borrower to pay for mortgage insurance and this is an additional cost that only hurts one’s budget. It’s mostly to cover the risks that a lender takes when lending to someone who has a chance of defaulting their payment. Native American loans don’t have this, significantly lowering their monthly premiums.
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Flexible Underwriting – underwriting is basically the task of checking one’s credit and payment history, as well as all the submitted information, to check if they qualify for the loan. Native American home loans are far more forgiving, with HUD underwriters who understand the financial difficulties that most Native Americans face these days.
