Section 184 loan down payment

Section 184 Loan Down Payment Requirements and Assistance

As a Native American, there’s no reason that you need a large down payment to buy a home. Section 184 loan down payment requirements are ultra-low, and assistance may be available.

That’s great news, since the down payment is often the biggest barrier to homeownership.

Here’s how much down payment you need for this homebuying program.

Connect with a lender to see if you’re eligible for Section 184.

In this article:

Section 184 Loan down payment requirements

The Section 184 Loan requires a 2.25% down payment for loans over $50,000. For loans under $50,000, it’s just 1.25%.

For a quick estimate, you can think of the down payment as $2,250 for every $100,000 in loan amount.

On a $250,000 home, the down payment is just $5,625.

This is one of the lowest down payment levels of any loan program. Compared to FHA, it’s significantly less expensive upfront.

Loan AmountSection 184 Down PaymentFHA Down Payment

Find out your exact down payment with this Section 184 Loan Calculator

Check your homebuying eligibility with a lender now.

Common down payment amounts

Not all loan programs need the same down payment. Fortunately, HUD 184 loans offer one of the smallest down payment levels available today.

Loan TypeDown Payment
Section 1841.25-2.25%
VA (Military Veterans only)0%
USDA (Rural properties only, income limits apply)0%

What if you don’t have a down payment saved?

Even a small down payment can seem like a huge roadblock to many buyers. That’s okay. You have a secret weapon: down payment assistance. 

As a Native homebuyer, you have more going for you than other buyers. Many Tribes offer down payment assistance to members. This encourages safe, adequate housing on and off the reservation.

The first place to check is the housing section on your Tribe’s website. See if down payment assistance is available. Even if you don’t use Section 184, you may be eligible for assistance.

If no Tribal assistance exists, look for city, county, or state programs. Google search: “down payment assistance in [city], [state] or [county],” filling in your specifics.

You might be surprised that you’re eligible for a deferred loan, a loan with a small interest rate, or assistance with no repayment required.

Connect with a lender to check down payment assistance options.

Closing costs: a cost many buyers didn’t count on

Closing costs are a surprise to most first-time buyers. These are extra costs for services related to buying a home. An example is the home appraisal.

These costs, plus costs that you prepay at closing like property taxes, add up to about 2-5% of the home’s price. These are above and beyond your down payment. 

With your down payment and closing costs, you’ll need about 4-7% of the home price upfront in cash or assistance to close.

Closing costs, like the down payment, can be covered by assistance programs from your Tribe or local government. For ideas on how to pay for these costs without your own money, see our article on Section 184 loan closing costs.

Can I use gift funds?

Gift funds are an acceptable way to pay the down payment and closing costs. 

You can use a gift from a family member, spouse, or non-profit organization. The gift can cover the entire down payment.

The lender will require a mortgage gift letter that details who the gift is from, the amount, and donor information.

Download your gift letter template.

Keep in mind that the donor has to supply a bank statement showing funds coming out of their account. You will supply your bank statement showing funds entering your account.

Related reading:

Section 184 Loan down payment FAQ

Why do Section 184 Loans require a down payment?

Lenders require down payments for most mortgage types because it has proven to motivate the buyer to stay in the home. If mortgage borrowers hit hard times, they are more likely to continue making payments and keep their loan in good standing to avoid foreclosure.

How much is the Section 184 Loan down payment?

The required down payment for Section 184 Loans is 2.25% for loan amounts over $50,000 and 1.25% for loans under $50,000.

Can the lender help pay my down payment?

Parties that have a financial interest in the transaction closing may not contribute toward the down payment requirement. Interested parties include the lender, Realtor, builder, and seller. However, a non-profit, family member, Tribal organization, or local municipality can contribute all or part of your down payment.

Should I apply if I only have the exact down payment in savings?

You should apply because you may be able to receive assistance for closing costs, and the down payment, too. Typically, you’ll need 4-7% of the home’s price to cover the down payment and closing costs It’s also a good idea to have at least 2-3 months of future housing payments in savings in case of a job loss or other unforeseen event. Assistance can help you cover upfront costs, leaving you with more money left over after closing.

How do I save up for a down payment?

Figure out how much you need to close a home purchase including down payment, closing costs, and an emergency fund. Now set a timeline for when you’d like to buy a home. Divide the amount you’ll need by the months until your goal date. For instance, if your goal is to have $5,000 and you want to buy a home in 10 months, save $500 per month. Each paycheck, before any other bills or expenses, set aside the right amount in an account you can’t easily access.

Down payment: Don’t let it stop you

A down payment can be a formidable barrier, but you can overcome it by saving up over time and searching for down payment assistance programs.

You may be closer than you think to owning a home.

Start your home loan pre-approval by speaking with a lender.


  • Tim Lucas

    Tim Lucas (NMLS 118763) has 20 years of hands-on mortgage industry experience helping everyone from first-time buyers to experienced investors. He purchased his first home at 26 with just $1,100 out-of-pocket and now owns real estate worth $2.4 million. Tim was the managing editor at national websites and and has been featured in publications such as Time, U.S. News, MSN, and more. He is a licensed loan originator (NMLS 118763). Connect with Tim on LinkedIn, Twitter, and TikTok.