Strengthening the Section 184 Indian Housing Loan Guarantee Program

Issuing agencies

Abstract

This final rule amends the regulations governing the Section 184 Indian Housing Loan Guarantee Program ("Section 184 Program") to strengthen the program by clarifying rules for stakeholders. As the program has experienced an increase in demand, it is necessary that HUD update the Section 184 Program implementing regulations to minimize potential risk and increase program participation by financial institutions. This final rule adds participation and eligibility requirements for Lender Applicants, Direct Guarantee Lenders, Non- Direct Guarantee Lenders, Holders and Servicers and other financial institutions. This final rule clarifies the rules governing Tribal participation in the program, establishes underwriting requirements, specifies rules on the closing and endorsement process, establishes stronger and clearer servicing requirements, establishes program rules governing claims submitted by Servicers and paid by HUD, and adds standards governing monitoring, reporting, sanctions, and appeals. This final rule adds new definitions and makes statutory conforming amendments, including the categorical exclusion of the Section 184 Program in HUD's environmental review regulations. Ultimately, the changes made by this final rule promote program sustainability, increase Borrower protections, and provide clarity for new and existing Lenders who participate in the program. This final rule follows the publication of a proposed rule on December 21, 2022, and takes into consideration the comments received in response to that proposed rule and during the Tribal consultations.