3 Reasons You May Want To Consider A Section 184 Loan Over A Traditional Mortgage
If you are not familiar with Section 184 home loans, this type of HUD loan is designed specifically for members of the Native American and Native Alaskan tribes and their families. Assuming you belong to one of these native populations, there are many reasons you should consider the use of a Section 184 loan over a more traditional mortgage loan such as an FHA or conventional loan. Continue reading to learn more about three of these reasons.
Easier To Qualify
Oftentimes individuals will find that Section 184 loans are easier to qualify for than traditional mortgages. This is because banks and other traditional lenders typically rely on software programs to determine whether or not a person meets a predetermined set of criteria necessary to qualify for a loan. If you do not fall within these very specific parameters, you will not be able to get the funds you are looking for. With Section 184 loans lenders, each application is reviewed by a real person on a case-by-case basis. This allows for issues such as a lack of credit history to be addressed on a case-by-case basis and can often improve your overall chances of being approved.
Buy On Or Off The Reservation
One of the primary roadblocks that many Native tribe members encounter when trying to obtain a home loan is that banks are unwilling to make loans for homes that are located on tribal land. The reason for this is that this land is kept in trust by the tribe and is, therefore, unable to be foreclosed on if the borrower neglects to pay off their loan. Section 184 loans address this issue by allowing for the home itself to be mortgaged rather than the land that it is built on. This distinction allows members of Native American and Alaskan tribes to purchase a home either on or off the reservation without worrying about their ability to obtain the necessary financing.
Traditional housing loans are designed for one purpose only: to purchase a home. Section 184 home loans offer a bit more flexibility. In addition to being used for the purpose of buying an existing home, the funds from these loans can also be used to refinance/renovate your home or to build a brand new home. This flexibility is made possible by the fact that 184 loans do not have many of the same requirements as traditional loans. For example, there is no mortgage insurance requirement that accompanies a Section 184 loan.
To learn more about the terms of a Section 184 loan or to apply for one of these loans, be sure to reach out to a participating lender like Today Lending in your area.