HUD Raises the Section 184 Upfront Guarantee Fee to 1.50% for New Commitments

Why this matters: Native American and Alaska Native borrowers using HUD's Section 184 program now face a higher one-time fee on new loans. On a $300,000 loan, the change from 1.00% to 1.50% adds $1,500 to the upfront fee.

Cover: a loan guarantee certificate, a percentage dial and a calendar page. Illustration created for mortgage.news; it does not depict a real person, property or document.

What changed

HUD published a Federal Register notice on September 28, 2026, raising the upfront loan guarantee fee for all new Section 184 Firm Commitments, including refinances, from 1.00% to 1.50%, effective October 1, 2026. For the Section 184 Skilled Workers Demonstration Program, the upfront fee rose from 0 to 1.00% on the same date.

The notice says the annual loan guarantee fee will remain at zero for all Section 184 loans.

Who is affected

The new fee applies to loans that receive a Firm Commitment from HUD on or after October 1. HUD states that the increase "will not apply to loans currently guaranteed by this program." Borrowers who already have a Section 184 loan do not owe the higher fee and see no change to their payment from this notice.

Borrowers in process should ask when HUD issued or will issue their Firm Commitment. That date, not the application date, determines which fee applies.

Why HUD made the change

The program guarantees private mortgages for Indian families, tribes and tribal housing authorities, including loans on trust land. HUD said the program has relied on a mix of congressional appropriations and fees, and the increase is meant to let it operate without annual appropriations. HUD cited a lifetime default rate of about 3.50%.

The 1.50% level is not new. HUD set the upfront fee at 1.50% in 2014, then cut it to 1.00% and eliminated the annual fee in July 2023, according to the notice. Federal law allows an upfront fee of up to 3.00%.

Example

On a $300,000 loan, the upfront fee is now $4,500 instead of $3,000. If the fee is financed into the loan, the balance rises and the monthly payment increases slightly. Your lender's figures will depend on the loan amount and whether the fee is financed.

Questions for your lender

• Has HUD issued my Firm Commitment, and on what date?
• Is the 1.50% fee included in my Loan Estimate, and is it being financed?
• For a refinance, how does the higher fee change my break-even point?
• Am I eligible for the Skilled Workers Demonstration Program, and what fee applies?

The takeaway

The Section 184 upfront fee is back at 1.50% for new commitments, while existing loans and the zero annual fee are unchanged. Check your Loan Estimate for the updated amount before closing.