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A
family who purchases a home under this program can apply for financing
through a HUD 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 down payment. 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 HUD
including water, sewer, and electrical systems. Prior to approving the
loan, HUD 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 HUD.
To find out if you qualify for the FHA Section 248 program contact a
loan officer at a HUD 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 HUD 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 HUD will insure mortgages on the reservation. The tribe
must:
- Certify to HUD 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.
- Permit HUD representatives access to the tribal lands for the
purpose of servicing the property in case of eviction.
- Agree to use the prescribed lease form.
- Enact an ordinance (where a tribal government's court has
jurisdiction to hear foreclosures) so that HUD-insured and HUD-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 HUD/FHA office that serves the reservation. HUD 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, HUD 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.
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