A Section 248 Mortgage on Indian Land refers to a purchase or refinance mortgage covering one- to four-family dwellings on Indian Lands. Only an Indian Tribe or a member of the Indian Tribe may be a borrower. Where there is a co-borrower, at least one borrower must be an Indian Tribe or a member of the Indian Tribe. The borrower must occupy the property as their principal residence. The property must be located on land held by the Indian Tribe or held by the United States government for the benefit of the Indian Tribe. Units in cooperatives are not eligible. The borrower must hold a residential lease for the property.

The lender must obtain a certification from the Indian Tribe confirming the Indian Land/reservations compliance with HUD’s requirements and take the following measures:

  • Certify to HUD that it has adopted eviction procedures and will enforce them;
  • Permit HUD access to tribal lands for the purpose of servicing properties;
  • Agree to the lease form that HUD prescribes; and
  • Enact a law that grants the tribal government’s court the jurisdiction to hear evictions and foreclosures so that FHA-insured and FHA-held mortgages can be assured a first lien or provides that the law of the state in which the property is located shall determine the priority of liens against the property.

If the reservation spans two or more states, the state in which the property is located is the applicable state law