According to the New Mexico Indian Affairs Department, the Land of Enchantment has 219,237 Native Americans. Members of the 23 tribes associated with the 3 reservations and 19 pueblos within our borders make up just under 10.5 percent of the total population of our state. While many tribal members live in their respective home countries, significant numbers live in the towns, villages, and hamlets that are scattered throughout New Mexico. According to the US Census Bureau, 5,018 of these tribesmen live in Dona Ana County.
Until the early 1990s, traditional mortgage lending was not available to Native American and Alaskan tribesmen who wanted to buy homes on tribal land. To address the lack of mortgage availability, Congress passed the Housing and Community Development Act 1992 and the Section 184 Loan Program. Initially, the program only applied to loans to tribal areas. In 2005, it was expanded to include loans to tribal members living in most states, including New Mexico.
The loans, which offer many advantages over traditional mortgage products, are issued by local lenders and 100% guaranteed by the Office of Loan Guarantee of the Office of Native American Programs of the US Housing and Urban Development. The guarantee protects the lender in the event that the borrower defaults on the loan.
Loans are drawn according to traditional FHA guidelines, which means borrowers must demonstrate that they have stable income and are able to repay the loan. Credit is still an important part of the qualification process, but scores will be downgraded according to the guidelines in Section 184.
Other differences include a down payment of 2.25 percent for loans of $ 50,000 or more and 1.25 percent for loans less than $ 50,000. The interest rates are based on market rates and not on the credit scores. Therefore, borrowers who meet minimum credit standards will be offered the same interest rate as exceptionally qualified borrowers. To date, over $ 100 million in loans have been made to tribal members of New Mexico.
The loans can be used to buy a new or existing single family home, or to build a house that in any case must be owner-occupied. Prefabricated homes on permanent foundations also qualify as long as they are condominiums, have permanent furnishings, and have not been removed from the land they were delivered on when they were new. Owner-occupiers can also buy a fixer-upper or refinance an existing loan.
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Income properties consisting of 2 to 4 units can also be funded under the program as long as the borrower lives in one of the units. Investment properties with more than 4 units and second homes are not eligible for 184 mortgages under any circumstances. The maximum loan amounts in Dona Ana County are $ 331,760 for single family homes, $ 424,653 for a duplex, $ 514,228 for three units, and $ 636,979 for a 4-unit building.
Each tribe sets membership requirements as set out in their constitutions, statutes, or ordinances. Current tribe members can go ahead and apply for a loan from one of HUD’s participating lenders. A list can be easily found by typing “HUD 184 participating lenders” into your browser.
If you are not a tribe member but feel you are eligible to attend, you will need to conduct your family history research, document your ancestors, and file an application with the tribe to which your ancestor is or was associated. Once membership is established, you can apply to a participating lender.
With a little legwork and luck, you could be the next tribe to buy property in the Las Cruces area.
See you when you close!
Gary Sandler is a full-time real estate agent and President of Gary Sandler Inc., Real Estate Agent in Las Cruces. He is happy to answer questions and can be reached at 575-642-2292 or [email protected].
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