Mortgage Insurance Programs
Indian Reservations
and Other Restricted Lands

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A family who purchases a home under this program can apply for financing through a FHA approved lending institution such as a bank, savings and loan, or a mortgage company. To quality, the borrower must meet standard FHA credit qualifications. An eligible borrower can receive approximately 97% financing . An eligible party can produce a gift for the downpayment. Closing cost can be financed; covered by a gift, grant, or secondary financing; or paid by the seller without reduction in value. To learn more about the mortgage limits in your area, go here.

You may buy an existing home (including a manufactured or mobile home, providing it meets certain FHA requirements) or build a home under this program. The home must meet the property standards required by FHA including water, sewer, and electrical systems. Prior to approving the loan, FHA will send an appraiser to determine the value of the home and see if it meets the property standards for insurance. For new construction, the plans will need to be approved by FHA.

To find out if you qualify for the FHA Section 248 program contact a loan officer at a FHA approved financial institution or mortgage company. Be prepared to answer questions about your income and how much you would like to borrow. The loan officer will tell you if you qualify, how much you can borrow, and will help you meet all the requirements for obtaining a loan.

You will have to think about a site lease if you plan to build a home or a lease for the land on an existing home. If you don't presently have a lot, you may be able to get an assignment from your tribe or lease a homesite on tribal land. Your tribe may have its own policies for assigning or leasing land, so talk to your tribal officials. The loan on the property must have a FHA approved lease in the borrower's name.

Although the tribe is not a party to the mortgage, the program cannot operate without the tribe's active participation.

There are four other program requirements which must be satisfied by the tribe before FHA will insure mortgages on the reservation. The tribe must:

1. Certify to FHA that it has adopted eviction procedures and will enforce them. The most important part is to name the court which will have jurisdiction over any cases filed on the reservation.
   
   
2. Permit FHA representatives access to the tribal lands for the purpose of servicing the property in case of eviction.
   
   
3. Agree to use the prescribed lease form.
   
   
4. Enact an ordinance (where a tribal government's court has jurisdiction to hear foreclosures) so that FHA-insured and FHA-held mortgage can be assured a first lien or providing that state law shall determine the priority of liens against the property.
   

When these requirements have been completed, the tribe sends the documents to the FHA Homeownership Center that serves the reservation. FHA will review the documents and notify the tribe if they are acceptable and mortgages can be insured under the Section 248 program.

In the event the home is resold, the tribe must approve the next buyer. If the family fails to make their payments and loses the home through foreclosure, FHA will attempt to resell the home to a qualified Indian family, with tribal approval. If a buyer is not found, the tribe may suggest a renter for the home, or it may buy the home itself.

Visit the FHA Resource Center for more Section 248 program information.