section 184 indian housing loan guarantee program fargo, north dakota september 2010 u.s. department...

SECTION 184 INDIAN HOUSING LOAN GUARANTEE PROGRAMFargo, North Dakota

September 2010

U.S. Department of Housing and Urban Development

PROGRAM OVERVIEW

Section 184 Training, Sponsored by HUD

PROGRAM OVERVIEW

• 1992 Housing and Community Development Act

• Annual funding by Congress

• Nationwide Program


LENDING IN INDIAN COUNTRY IS UNIQUE

• Unique land status– Tribal Trust Land– Allotted Trust Land– Unrestricted Land

• Underserved markets– Non-traditional credit– Limited access/exposure to financing– Manual underwriting


184 PARTNERS

• HUD 184 Program Staff

• Lenders

• Tribes

• TDHEs (Tribally Designated Housing Entities)

• BIA (Bureau of Indian Affairs)


LENDER INCENTIVES/OPPORTUNITIES

• 100% guaranteed loan

• Assign or foreclose• Up to 2.5% loan origination fee on

construction/rehab loans

• Community Reinvestment Act (CRA)


PARTNERROLES AND RESPONSIBILITES


WHAT DOES HUD DO?

• Develops and implements policies

• Conducts training and marketing

• Underwrites the loan

• Issues the Loan Guarantee Certificate


WHAT DOES THE LENDER DO?

• Lends the money!• Explains the 184 mortgage loan

process • Processes and prepares the loan

package• Serves as liaison between borrower

and HUD• Underwrites the loan (Direct

Guarantee approved)Section 184 Training, Sponsored

by HUD

ELIGIBLE LENDERS

• Bank, Savings & Loan, Credit Union

• Mortgage Companies approved through FHA, VA or RD

• FHA approved Brokers with 184 Program Sponsorship

• Lenders/Tribe obtain approval through NAHASDA (Chapter 3 of Guidebook)


3 STEP LENDER APPROVAL PROCESS


Lender Package


RETAINING AN ACTIVE STATUS

• Submit annual, updated certification package to designated OLG staff. (In the planning stages)

• Request training for all new/inactive staff.

• Process at least 2 applications within a 6 months period .


CONTENTS OF LENDER PACKAGE

Statement requesting approval to include:

• Name and address of applicant, geographic service area

• EIN number for applicant and date on Incorporation,

Companies that are already approved lenders need not resubmit a new Lender package, but training is mandatory for all new staff.


CONTENTS OF LENDER PACKAGE (CONT.)

• List of Officers/Directors who supervise staff and persons holding more than 10 percent of stock in the entity including phone numbers , home addresses and social security numbers.

• List of employees who will participate in the program to include social security numbers , positions and residential credit reports.


WHAT DOES THE TRIBE DO?

• Implements foreclosure, eviction, lien & leasing procedures– Model One-Stop Docs

• Conducts environmental reviews

• Completes land status form


WHAT DOES THE TRIBE PROVIDE?

• Land

• Homeownership counseling

• Financial Assistance

• Infrastructure


WHAT DOES BIA DO?

• Serves as a trustee for tribal trust land

• Approves lease/mortgage

• Provides/updates title status reports– Records mortgage/lease

• Underwrites/reviews loan package (if allotted/restricted)


PROGRAM FEATURES AND REQUIREMENTS


Who can get a 184 Loan?ELIGIBLE BORROWERS

• Indian or Alaska Native individual enrolled in a Federally recognized tribe. Copy of enrollment card/enrollment letter required.

• TDHE/IHA (Indian Housing Authority)

• Tribe. Tribal federal designation available on Federal Register accessed on Dept. of Agriculture/BIA website


Who can get a 184 Loan?ELIGIBLE

BORROWERS (Cont.)

• Citizenship/Immigration– Not required for eligibility– Lawful permanent resident aliens –

document evidence of permanent residency

– Non permanent resident aliens • Principal residence• SSN• Eligible to work in the US


LOAN FEATURES

• Term: 30 years or less• Fixed interest rate determined by

lender• 1% guarantee fee• Minimal down payment requirement• No Adjustable Rate Mortgages• No commercial structures


HOMEOWNERSHIP OPPORTUNITIES

• Purchase existing house• Rehabilitation of existing house• Purchase and rehabilitation• New construction

– Manufactured– Modular/stick built

• Refinancing


PROPERTY REQUIREMENTS

• Trust land or land within an Indian area

• Meet construction and safety codes• Single family (1-4 units)

– Examples include: house, duplex, tri-plex, four-plex, town home, manufactured/modular home

• Manufactured Housing– Affixed to a permanent foundation– Manufactured after 6/15/76


LAND OWNERSHIP

• Tribal trust land

• Allotted individual trust land

• Fee simple land in a defined Indian operating area


LAND OWNERSHIP

• Program requirements and processing procedures vary depending upon how land is held

• Land in an Indian Area = area in which a Tribe/TDHE is authorized to provide housing


LAND CHARACTERISTICS

• Land or interest in land held in trust by BIA for a Tribe

• Land may not be encumbered or alienated (leasehold)


Tribal Trust Land


• Land or interest in land held in trust by the BIA for an individual Indian

• Tribe has no interest in land

• Subject to restrictions against alienation or encumbrance


Allotted Individual Trust Land


• Estate in land that is absolute or unrestricted

• Owner can dispose of land– Subsequent sale of home and/or

foreclosure; land and home sold together

• Located on reservation or within Tribe’s operating area for housing


Fee Simple Land

184 LENDING ONTRIBAL TRUST LAND

• Leasehold interest must be established between borrower and tribe

• Title Status Report from BIA – preliminary with lease– final with lease/mortgage

• Parties to lease: BIA, Tribe, and Borrower– HUD approval/review


184 LENDING ON TRIBAL TRUST LAND (cont.)


Note: Leasing instrument normally approved when tribe submits

documentation to participate in 184 program

184 LENDING ON INDIVIDUAL ALLOTTED

TRUST LAND

• Generally no lease

• BIA approval required

• BIA issues Title Status Report with recorded mortgage & approval


184 LENDING ON INDIVIDUAL ALLOTTED

TRUST LAND

• Fractionated ownership

• Lease (due to fractionated ownership)

• Foreclosure can result in loss of land

• Excess land


184 LENDING ON FEE SIMPLE LAND

• Lease not required

• Title policy required

• Property must be in a designated Indian Operating Area (Tribal certification on Land Status and Jurisdiction Form)


184 LEASE REQUIREMENTS

• Not to exceed 50 year term• Provision preventing termination

without HUD approval• Language indicating lessee can

mortgage the leasehold, and foreclosure is allowed

• Language preventing transfer or assignment of leasehold interest without HUD/Tribe approval


LOAN PROCESS FOR TRUST TRANSACTIONS


LOAN PROCESS For TRUST TRANSACTIONS

• Land status verified with tribe and/or BIA:– Title Status Report needed to verify

individual allotment ownership– Land Status and Jurisdiction Form



Underwriting the Title Status Report

• Documentation required from the Bureau of Indian Affairs

– Tribal Trust• Certified TSR (1 years or less) with/without

recorded lease• Executed lease



Underwriting the Title Status Report (Cont.)

– Individual Allotted Trust land• Certified TSR (6 months or less)• BIA approval to mortgage

– Individual Allotted Trust Land with lease• Title Status Report with recorded lease• NO BIA approval to mortgage


LOAN PROCESS For TRUST TRANSACTIONS (Cont.)

• Borrower works with Tribe/BIA to obtain 184 lease if tribal trust land– Lease is recorded with BIA and TSR

issued

• Borrower works with Tribe/BIA to get environmental review completed. REQUIRED ON ALL LOANS



• Lender submits simultaneously:– Complete underwriting package to

HUD (fee simple, tribal trust and individual allotment)

– Copy of proposed mortgage/DOT to BIA for approval (trust land)

– Complete underwriting package to BIA (individual allotted land)



• Lender receives commitment for BIA (individual allotment)

• Lender receives commitment from HUD

• BIA Issues Certificate of Mortgage Approval (trust land)

• BIA Title Plant completes certified Title Status Report for lender (trust land)

• Guarantee Package to HUD for Loan Guarantee Certificate


SECTION 184 LOAN PROCESSING


LOAN ORIGINATION

• Borrower contacts approved lender

• Lender determines if borrower meets program eligibility

– Native American (ID/Enrollment Card)

– Tribe on 184 approved list

– Indian operating area

• Lender requests case number from HUD using forms and process as described.


H22324

LOAN ORIGINATION (Cont.)

• Lender obtains loan documents and construction/purchase documents

• Lender orders an appraisal– HUD Manual 4150.2– Cost approach can be utilized if comps

not available– FHA approved Appraiser– Appraisal good for 120 days

• Lender prepares loan package and submits for underwriting


REQUESTING A CASE NUMBER

• Files will NOT be accepted for HUD underwriting until a case number has been assigned by OLG staff.

• Case number assignments represent internal funds management for HUD and reservation of funds for lenders.


REQUESTING A CASE NUMBER (Cont.)

• Must be requested prior to submission of underwriting package

• Electronic (MS Word compatible) form is available and preferred

• Submit electronically as a Word document (.doc or .docx formats) via email to HUD for fastest turnaround


Underwriting Components

• Credit• Capacity• Collateral


The underwriting review determines the borrower’s ability and willingness to repay the mortgage debt.


• The borrower’s ability to repay the debt is assessed by considering:

• Income history and stability;• Employment history and stability• Debts

• The borrower’s willingness to repay the mortgage debt is assessed by considering

• Credit• Pay history



• The maximum allowable mortgage amount is determined as the lower of these 3 factors:

– 150% of FHA Loan limits (03/2008) for the County where the property is located

– Loan to Appraised Value Ratio:• 97.75% when $50,000 or greater• 98.75% when $49,999 or less

– Acquisition cost (sales price + closing costs): • 97.75% when $50,000 or greater• 98.75% when $49,999 or less


CLOSING COSTS

• Costs not included when calculating mortgage basis (paid in cash):– Prepaids (hazard/taxes/interest) – Discount points


Note: 1% guarantee fee is not included in closing costs when calculating mortgage basis. It is added on at 100% after calculating the mortgage basis.

PREQUALIFYING BORROWERS

• Lender responsibility prior to submission to HUD 184

• Determine threshold eligibility:1. Enrollment in Federally recognized

tribe.2. Credit worthiness. (see Chapter 5 of

“Draft” Guide of 12/30/09 for detailed Underwriting standards).

3. Acceptability /Cost of property.4. Evidence of stable employment,

sufficient cash availability for transaction, etc.


URLA

• Uniform Residential Loan Application– (URLA, Fannie Mae 1003, Freddie

Mac 65)

• This document must be completed in its entirety for all Section 184 loan requests


INCOME

Income - Types:

– Salary or Wages– Overtime and Bonus– Commissions– Seasonal and Part Time– Retirement, Alimony, Child Support– Rental – Trust and Non-Taxable– Self Employment– Tribal Distribution


INCOME (Cont.)

Income and Employment-Determination and Documentation

• Verification of 2 full years of employment

– Salaried or hourly:• Written or verbal VOE• All W-2’s for 2 years• Recent paystubs covering a full one

month period


INCOME (Cont.)

Income and Employment-Determination and Documentation

• Verification of 2 full years of employment

– Self Employed:

• Signed/Dated personal tax returns (2yrs)• Signed/Dated business tax returns (2yrs)• Signed/Dated year to date Profit & Loss


INCOME (Cont.)

Rental Income-Determination and Documentation

• Rental Income documented on Tax Return– Schedule E and current lease w/6 months

remaining• Rental Income NOT documented on Tax

Return– Comp factor with current lease w/6

months remaining– Full payment (PITI) counted as debt for

qualifyingSection 184 Training, Sponsored

by HUD

INCOME (Cont.)

Tribal Distribution-Determination and Documentation

1. Two year history (1099’s) Current year distribution Documented 3 year continuation

OR2. Letter from tribe verifying a prior two year

distribution to tribal members Current year distribution Documented 3 years continuation


LIABILITIES

• Recurring Obligations– Include with 6 months or more

remaining (all debts)– Subject to underwriter discretion

• Projected Obligations– Scheduled to commence within 12

months


LIABILITIES

• Contingent liabilities– Co-signed obligations

• Originator made 12 consecutive payments• Divorce Decree/legal separation with designated

responsibility to ex-spouse– Current at time of separation/divorce– Copy of separation agreement

– Mortgage Obligations (within the last 5 years without a release of liability); unless:

• Originator made 12 consecutive payments• Divorce decree/legal separation with designated

responsibility to ex-spouse • Transfer by employer and covered by home sale

guarantee planSection 184 Training, Sponsored

by HUD

What are we looking for?CREDIT HISTORY

• Show borrower(s) payment pattern

• Show previous/existing debt

• Show court order judgments, collections and liens which may affect borrower’s ability to obtain a loan


Note: Lack of Credit is not basis for denial

CREDIT HISTORYSpecial Notes

• Non Purchasing Spouse– Not to appear on the security

instrument or otherwise take title to the property at loan settlement; unless

– Required by state law to perfect a valid and enforceable first lien

• Community Property States– Debts of non purchasing spouse must be

included in the borrower's qualifying ratios– Credit history not to be considered a

reason for credit denial– States: AZ, CA, ID, LA, NV, NM, TX, WA, WI


CREDIT REPORT

• The credit report must:

– Be a RMCR or Tri-Merge Credit Report• Credit Scoring

– Be the original provided by the credit reporting agency

– Contain all credit available in the repositories, be accurate and complete, provide an account of the credit, residence history, and public record information of each applicant. This includes bankruptcies, judgments, lawsuits, foreclosures, and tax liens that have occurred within the last 7 years.

– Contain a 24 months employment and 24 months residency history if not verified otherwise. Section 184 Training, Sponsored

by HUD

CREDIT REPORT (Cont.)

• The credit report must:

– Identify each applicant’s name, social security number, date accounts were opened, credit limit, required payments, unpaid balance and payment history of each account.

– Payment history must appear in the "number of times past due" format and be otherwise easy to read and understandable.

– Must have no whiteouts, erasures, or alterations.


CREDIT REVIEW

• Bankruptcy- general requirements– Chapter 7:

• Discharge with credit reestablished• Two years since discharge• 12-23 months with documented unusual

circumstances

– Chapter 13:• One year payout with good performance• Court approval


CREDIT REVIEW (Cont.)

• Foreclosure– Extenuating circumstances– Re-established good credit

• Short Sales – Must have been approved by the lender

prior to the becoming delinquent or in default



• Collections – Paid in full (at or before closing)

• Resulted in collection 12 months prior or more• Written letter of explanation• Medical (can remain if documented 3rd party

responsibility)

• Liens/Judgments– Paid in full 12 months prior to date of

application• Written letter of explanation• Re-established good credit


Exceptions: Executed repayment agreement with two year history; caution


• Recent Debt and Undisclosed Debt• Delinquent Federal debts – LDP/GSA:

– Borrower not eligible unless account is current, paid or otherwise satisfied

• Credit Alert Interactive Voice Response System (CAIVRS):– FHA system to verify if borrower is/has

been delinquent on Federal debt



Credit Requirements:• No late payments within 12 months

• No late mortgage payments within 12 months

• No bankruptcy, judgments in 24months (special circumstances reviewed on case by case basis)

• No accounts reverting to collection in 12 months


Lack of credit not grounds for rejection; alternative credit accepted; 1 to 3 sources.

H22324

DEBT-TO-INCOME RATIO

• 41% debt-to-income ratio (guide):– Determines if borrower(s) has/have

the ability to repay the mortgage

– Compensating factors when ratio exceeds guide

• Documented in underwriting file


BORROWER’S INVESTMENT

• Cash investment — difference between the mortgage loan and the cost to acquire the property

• Range of investment — 1.25% to 2.25% based on maximum mortgage limit


FUNDS TO CLOSE

• Saving/Checking• Secured funds• Gifts• Cash• Land equity


•Sale of personal items• Sale of home proceeds• 401K loan• Sale of Investments

Borrower can obtain the down payment and closing cost funds from any of the following sources:

FUNDS TO CLOSE VERIFICATION

• Savings/Checking/Deposit Accounts– Verification of Deposit– Two months bank statements (all pages)

• Secured funds– Copy of signed loan docs showing collateral

• Gifts– Gift letter– Verification of donors ability– Documented receipt of funds

• Sale of current home– Certified copy of signed HUD-1


TRIBE/TDHE ASSISTANCE

• Provide a gift or loan to borrower:– Gift letter– 2nd mortgage letter– Recorded documents with the

endorsement package

• Tribal funds:– No restriction on use/amounts


APPRAISAL

• Market ApproachUsing FHA appraiser/guidelines

• Cost ApproachTrust land, rural areas

• Types of Appraisals– Manufactured – Condominium– Standard 1 – 4 Units


APPRAISAL

• Appraisal Issues– Land value > 50%– Declining market loans > $400,000– Other

• FHA Approved Certified Appraisers

• Appraisal valid for 120 days


SUBMITTING UNDERWRITING

PACKAGE TO HUD


FIRM COMMITMENT CHECKLIST

See Handout


H22324

SECTION 184 MCAW

• See Handout


HUD FILE PROCESSING

• OLG staff receives file, conducts preliminary completeness review, logs file and accepts in pipeline.

• Incomplete, improperly packaged files subject to rejection/return by Program.

• Files generally processed in date order as received.


HUD FILE PROCESSING (Cont.)

• Consideration given when possible for occasional emergencies (expiring contracts, expiring rate locks, delays beyond the control of Lender/Borrowers).

• Turn time for issuance of Firm Commitment/Conditional

Commitment 5-7 days.( Longer response times may occur during peak work load periods)

• Commitment or declination letter issued by Underwriter, signed and faxed to Lender.


CLEARING COMMITMENT CONDITIONS

• Additional submission required for all items referenced in pre-closing section of commitment.

• Preference is for submission of a complete package of all documentation needed to clear. May be faxed or e-mailed.


CLEARING COMMITMENT CONDITIONS (Cont.)

• Underwriter will review (within 24 hours), approve, initial date and return by fax to Lender.

• Closing not authorized until fully cleared commitment is received from HUD. Loan closing to be scheduled before the commitment expiration date. (Extensions are not automatic).


THE TRIBE OR TDHE AS BORROWER


UNDEVELOPED MARKETS

• Limited Housing Supply– Low turnover, vacancy rate– Limited availability of developed lots– Limited sales

• Modest homes• Tribal developers

– Financing generally grant based– Limited exposure/access to financial markets

• Subsidies – Construction (grants, guarantees, interest rate)– Down payment & closing costs


TRIBE/TDHE LOANS

• When the Tribe or TDHE borrowers for the construction/purchase of rental property, they must demonstrate:

– Property management skills– Rental and maintenance plan– Renters able to pay


TRIBE/TDHE LOANS (Cont.)

• These properties are eligible for assumption by qualified borrowers:

– Tribe/TDHE pays cash investment and loan payments during construction

– Qualified Borrowers able to assume– After qualifying assumption, Tribe or

TDHE is released from liability


TRIBE/TDHE LOANS(Cont.)Financial Capacity

• Demonstrated ability to pay mortgage loan:– Credit History (Dunn & Bradstreet)– Sources of funds to close– Income– Liabilities



• Coverage of debt service

• Skills, experience to undertake project

• Demonstration of need

• Marketing plan

• Audited financial statements



• Evidence of authority to borrow

• Evidence of ability to obtain deficiency judgment

• Plans for projects exceeding 20 homes must be built in phases


184 SINGLE CLOSE CONSTRUCTION LOANS


CONSTRUCTION LOAN OPTIONS

• 2 options available to borrowers:– Lender or Bank carries interim

construction loan • 184 loan used to payoff construction

loan; not closed or guaranteed until after house is complete

– 184 single close construction loan


SINGLE CLOSE CONSTRUCTION LOAN

• One time Single Close

• Construction starts within 60 days after closing

• Mortgage payments begin after closing

• 6 month construction period

• Guarantee issued after closing


H22324

SINGLE CLOSE CONSTRUCTION EXPENSES

The following expenses can be included in the loan amount , if supported by the appraisal:– Inspections – Up to 2.5% loan origination fee– Contingency Reserve – 0-6 mortgage payments– Title update fees– Permits


SINGLE CLOSE CONTINGENCY REQUIREMENT

• $0 - No contingency for manufactured and modular homes

• 10% requirement for site built, site work, rehabilitation – Included in loan: unused portion used

to pay down unpaid principal balance– Excluded from loan: separate escrow;

unused portion may be returned to borrower


SINGLE CLOSE REHAB LOANS

• Acquisition or existing debt + improvements can’t exceed program LTV requirements

• $10,000 + of improvements required for eligibility

• Appraisal requirements or borrower’s wish list allowable.

• Luxury items and items not a permanent part of the property are not eligible


SINGLE CLOSELOAN PROCESSING

• Borrower/contractor determine cost to construct /rehabilitate

• Appraisal based on completed or after improved value

• Lender completes construction/rehab worksheet; to determine mortgage amount


SINGLE CLOSELOAN PROCESSING (Cont.)

• Lender submission package to include all construction documents:– Single Close Max Mortgage Worksheet– Plans & Specs/Description of Materials– Site Map and Plot Plan– Proposed Contractor/Homeowner

Agreement and Breakdown of Costs– Proposed Construction Schedule– Builders Certification, HUD 92541



• Closing Requirements:

– Section 184 applicant acknowledgment– Construction loan rider– Construction loan agreement– Evidence of construction escrow– Notice to Proceed issued to Borrower and

included in closing package– Final release of contingency reserve funds

approved by the lender; final accounting sent to HUD



• Post Endorsement Documents– Sent to HUD after completion of

construction

• Post Endorsement Checklist


REFINANCES


REFINANCES

• Statute and regulations amended to allow refinance under Section 184

• No statutory or regulatory authority to refund Loan Guarantee fee

• Loan Guarantee fee required• Loan amounts must be within

mortgage limits for area (150% of FHA limit published March 2008)


TYPES OF REFINANCES

• Streamline refinances (existing 184 loans)– With or without an appraisal– With or without credit qualifying

• Cash out with an appraisal and credit qualifying

• No cash out with an appraisal and credit qualifying


TRUST LANDREFINANCES

• Acceptable existing lease:– Sufficient term remaining– Current TSR with recorded lease

• New lease when existing lease is unacceptable: – Old lease must be canceled– Current TSR with new lease recorded

and old lease removed


TRUST LANDREFINANCES (Cont.)

• Responsibility of Lender after closing:

– Satisfaction of existing mortgage is recorded on TSR

– New mortgage and rider approved and recorded on TSR


TRUST LANDREFINANCES (Cont.)

• Appraisals:– Follow HUD Handbook 4150.2– Cost approach usually utilized


STREAMLINE REFINANCES

• Limited to existing Section 184 loans

• Purpose:– Lower borrower’s monthly payment; or– Reduce mortgage term

• Subordinate financing can remain in place if subordinated to new loan

• No repairs financed

• Cash back to borrower cannot exceed $250


STREAMLINE REFINANCES (Cont.)

• Social Security numbers/Tribal enrollment verified

• Loan must be current prior to refinance

• Premium pricing allowed for no cost loans

• Evidence of cash to close not required but at OLG discretion


CASHOUT REFINANCE

• Not limited to 184• Credit qualifying• No DG approval, HUD underwritten• Appraisal• All subordinate liens paid off• Mortgage payments on time


CASHOUT REFINANCE (Cont.)

• Tribal approval when down payment assistance provided on original loan

• Maximum cash back limited by OLG ($25,000 cash in hand)


CASHOUT REFINANCE

Credit Requirements:

• No late payments within 24 months


• No bankruptcy, judgments in 48 months ( special circumstances reviewed on case by case basis)



NO CASHOUTREFINANCE

• Used to refinance mortgage loans other than existing Section 184

• No cash back• Max mortgage amount may include

payoff, closing costs, and prepaids – Not to exceed the appropriate

program LTV and FHA loan limits on 03/2008


NO CASHOUT REFINANCE

Credit Requirements:• No late payments within 12 months


• No bankruptcy, judgments in 24months (special circumstances reviewed on case by case basis)



PROCESSING RESOURCES

• Chapter 5 of the Guidebook



• All Forms with HUD number can be obtained on www.hudclips.org


http://www.hudclips.org/

LOAN CLOSING


LOAN CLOSING

• Lender closes loan

– All commitment conditions met– All closing documents including

specific to 184– 1% guarantee fee sent to HUD

Lockbox– Lender sends Mortgage/DOT for

recording to BIA and/or county/tribe and requests final TSR/Title Policy


ENDORSEMENT PACKAGE

• Received within 60 days after closing• Reviewed

– 184 required documents– Commitment conditions– Closed as underwritten

• Late endorsement (more than 60 days after closing)– Special processing requirements , fees

may apply


GUARANTEE FEE

• HUD 53038, Guarantee Fee Transmittal Form

• Check to lock box in Atlanta, GA– Must be received 15 calendar days

after closing

– Late charge/interest


LOAN SERVICING

• Protecting HUD’s interest

• File retention (life of mortgage + 3 years)

• Escrow accounts

• Notification of servicing change


DELINQUENT SERVICING

• Face-to-face interview before 3 payments owed

• Borrower information packet

• Delinquency letter (30-45 days)

• Notice of intent to foreclose

• Leased land (review for reporting requirements to tribe)


FORECLOSURE OR ASSIGNMENT

• Option to foreclose or assign

• 100% payment

• Claim submission


REPORTING REQUIREMENTS

• Notify HUD when delinquent 30-45 days

• Quarterly reports to HUD– Principal balance

– Delinquency status (if applicable)

• 184 Servicing Contact:– Thelma Pillay (202) 402-2786


SECONDARY MARKETS

• Ginnie Mae

• Fannie Mae

• Freddie Mac

• Local Markets


THANK YOU!

• More information on the 184 program:

– http://www.codetalk.fed.us/loan184.html

– HUD/Office of Native American ProgramsToll Free: 1-800-561-5913


http://www.codetalk.fed.us/loan184.html

http://www.codetalk.fed.us/loan184.html