Indian Home Loan Guarantee Program (Section 184) Public Law 102-550

The United States Government holds much of the land in Indian Country in trusts; land may be tribal trust, individual trust, or fee simple. Despite the fact that trusts are designed for the benefit of an individual or a tribe, they present difficulties for mortgage lenders in terms of foreclosure, liquidation, and other practices. Prior to Section 184, lands held in trust for tribes could not be mortgaged at all, while lands held in trust for individuals could be mortgaged only after being approved by the Bureau of Indian Affairs (BIA). Section 184 addresses this issue by allowing an individual eligible for the loan that owns land held in trust by a tribe to lease the land from the tribe. Thus, if there were to be a foreclosure, the home and leasehold interest would be foreclosed, while the tribe would still maintain the trust of the land. Under Section 184, the applicant must receive approval from HUD and BIA to mortgage individual trust lands. If the individual defaults, they have the option of transferring the loan to an eligible tribal member, the tribe, or the Indian Housing Authority serving the tribe before liquidating. In the event of foreclosure, these three parties are also the only three to whom the land can be sold, thus preserving the spirit of the trust and keeping the land among the parties for whom it was intended.