Anyone ever use a SECTION 184 Loan

[Wade Alderson]

I just found out I qualify for a Section 184 Loan 

I am not ready to start just yet, I still am planing to spend the rest of this year fixing my credit and saving up the down payment on my first house hack. 

My step mother (who I LOVE to death) has cancer and gave me the "I want to see you start achieving your dreams while I am still alive." speech yesterday and one of those was to start investing in real estate in the next year or less and to move to Florida. 

Then out of the blew today I found out that with the right savings and credit I qualify for a Section 184 Loan and wondered if any other real estate investors had used one and if it was a good fit. 

I would really appreciate any feedback I could get. 

[Jason Little]

@Wade Alderson  

I am a lender in New York, and have never personally done one of these deals, but my understanding is that the terms of the 184 are not based on your credit, but on current market rates. This could be a major benefit to you if you have a weaker score, and could fast track you to getting a fair market rate. I believe it also offers a lower down payment option, but i would always suggest trying to put down as much as you reasonably can. 

The one thing I would worry about is that this plan was set up to increase home ownership, and I don't believe it is open to investment properties. It does cover 1-4 family as long as its owner occupied so it could be a great option for a house hack. 

Good luck and good health to you and your family.

[Account Closed]

Hello,

@Wade Alderson I am also Native American and considering going this route for funding my first house hack as well. Did you end up using Sect. 184, and if so how did your deal go?

@Jason Little I’ve received differing opinions on what the 1-4 unit means in this context. To clarify, this loan may be used to purchase a 2plex, 3plex, or 4plex, as an owner occupant?

Thank you!

[Wade Alderson]

@Harrison Moseby I have not started my real estate empire yet. My wonderful Step Mother beat cancer but my younger sister was in a car accident that crushed one of her ankles and broke her tail bone. I am her at home care giver so until things change it would be very rude of me to pack up and just leave her. On the upside since my sister needs someone here most of the time I have come up with some very creative money making opritunites (and learned that 90% of the Digital Marketing Guru's are scam artist. Case in point... anyone who says you can be making $10K a month in 90 Days but never tells you in training that you have to spend $5K in marketing to make that happen, tends to be one of those jerks who makes more money selling the training than by actually doing what they teach) and the best part is everything I am learing can be used for my real estate when I need to market it. I am so golden I should sparkel in the sun. 

[Kristy E.]

@Wade Alderson @Account Closed My husband and I are searching for the right lender to do a Section 184 loan for us at the moment. I'll update throughout the process to hopefully give more insight into this program as I know first hand information from a buyer perspective is extremely limited.

[Ryan Shannon]

I purchased the home I currently live in using a Section 184 loan. The process itself was fairly easy, but there was a ton of paperwork to sign at closing. There are more than a few lenders that will do a section 184 in Oklahoma, but I would definitely shop around. My realtor never did an actual 184 prior to me, but I researched most of it and they helped me along with my first home purchase, so we both filled in the gaps as we went. It's basically the same as purchasing a home with a regular FHA or conventional, just 2.25% down and very good interest rate that's market based and not score dependent (although it didn't matter too much for me).

What you will want to shop around for are the additional points added to your mortgage by each lender. Some do less than others. I'm thinking about refinancing, but may end up purchasing my first rental property in Tulsa, which I'd opt to do rather than refinance, but the refinance option is very attractive as well.
Otherwise, as a buyer, it seemed to be a very simple process for me, and you pretty much do all the same as a regular mortgage, just more paperwork at the end.

Yes, you can do up to a 4-plex as long as owner occupant and I would definitely go in that direction if it fits you. The question I have now is that I don't know if I have to refinance into a conventional if I don't occupy the home and want to rent it out.

Also, don't forget about the closing costs. That was more than the down payment, honestly.

Good luck taking advantage of this excellent program!

[Tim Lucas]

These are very cool loans. Never done one myself but have been researching them lately. You can house hack by buying a 2-4 unit and living in one unit. You can use the loan for a home on or off-reservation which is what really sets it apart from FHA. There's a lot more background work to do if buying on-reservation.

There are about 140 lenders nationwide that do them. It's a good idea to shop around for the best rate and fees. I have a complete lender list, calculator, and all the details about the loan here: https://thisismortgage.com/section-184-loan/