Title 12 — Banks and BankingRelease 119-73
§1715z–13 Single family mortgage insurance on Indian reservations
Title 12 › Chapter CHAPTER 13— - NATIONAL HOUSING › Subchapter SUBCHAPTER II— - MORTGAGE INSURANCE › § 1715z–13
Summary
The Secretary may insure mortgages for one- to four-family homes on trust or restricted Indian land when the loan is made by an Indian tribe or by a tribal member who will live in the home. The Secretary can also insure construction draws if the project meets tribal or national building codes and no other financing is available. The usual loan-to-value limits apply when tribes own homes. As a condition of insurance, the Secretary may require a tribe to pledge tribal income or non-Interior-restricted tribal assets, or federal grants administered by HUD, to repay any insurance claims. For individual borrowers, the Secretary may require a pledge of their share of distributed tribal or trust income, but not federal grants. The Secretary cannot refuse to insure a purchaser just because they have no distributed tribal income. Before committing to insure, the tribe must show it has eviction rules for defaults. A mortgage may be assumed if the lender approves credit and the tribe agrees to the lease assumption or a new lease. Sales generally require a new lease, though a foreclosure sale may include lease assumption with tribe consent. Insurance under this authority is the responsibility of the Mutual Mortgage Insurance Fund, and lenders get the usual insurance benefits. HUD must share loan status with local credit bureaus and require face-to-face counseling documentation before accepting assignment. HUD may seek loan reinstatement, garnish distributed tribal income if the borrower won’t try to fix a default, and start foreclosure in tribal, designated local, or federal court to protect the fund. Premiums must cover program costs but cannot exceed 3 percent per year. By September 30, 1984, the Secretary had to report to Congress on premium differences. Definitions: "Indian tribe" — federally recognized tribe or similar group; "trust or otherwise restricted land" — land held in trust, restricted against sale, or Alaska Native lands.
Full Legal Text
Title 12, §1715z–13
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(a)The Secretary, subject to such special conditions as the Secretary may prescribe, may insure under any provision of this subchapter that authorizes such insurance, a mortgage covering a property upon which there is located a one- to four-family residence, without regard to any limitation in this chapter relating to marketability of title or any other limitation in this chapter that the Secretary determines is contrary to promoting the availability of such insurance on Indian reservations if the mortgage (1) is executed by an Indian tribe and the property is located on trust or otherwise restricted land; or (2) is executed by a member of an Indian tribe who will use the property as a principal residence and the property is on trust or otherwise restricted land.
(b)Notwithstanding any other provision of this chapter, with respect to mortgages covering a property upon which there is located a one- to four-family residence—
(1)the Secretary may insure and make commitments to insure under this subchapter pursuant to this section advances made during construction where the Secretary determines that the proposed construction is otherwise acceptable and meets an applicable tribal or national model building code, and that no feasible financing alternative is available;
(2)the applicable percentage limitation on the amount of the principal obligation of a mortgage based on the appraised value or replacement cost, as appropriate, of a one- to four-family owner-occupied residence contained in this subchapter shall apply in the case of all mortgages insured pursuant to this section without regard to whether the residences are owner-occupied where the residences are owned by the tribe; and
(3)(A)the Secretary may require an Indian tribe, only as a condition of insurance made under this subchapter pursuant to this section, to pledge income from tribal resources or income from tribal assets not subject to a restriction by the Secretary of the Interior or pledge grants under title I of the Housing and Community Development Act of 1974 [42 U.S.C. 5301 et seq.] or any other Federal grant program administered by the Secretary of Housing and Urban Development to be used to reimburse the Secretary for any mortgage insurance claims paid in connection with residences insured pursuant to this section; or
(B)in the case of an individual Indian mortgagor, the Secretary may require a pledge of his or her share of distributed income from tribal resources or income from tribal assets, excluding any Federal grants received by the tribe.
(c)The Secretary may not refuse to insure a mortgage under this section to an individual home purchaser because there is no distributed tribal or trust fund income attributable to that purchaser.
(d)Before making any commitment to insure a mortgage under this section with respect to property located on trust or otherwise restricted land, the Secretary shall require a showing by the tribe that it has adopted eviction procedures to be used in the event of a default.
(e)A mortgage insured under this section may be assumed, subject to credit approval by the lender and the consent of the tribe to an assumption of the existing lease or the grant of a new lease, without an adjustment of the interest rate. Any other sale of a property subject to a mortgage insured under this section may be made only if a new lease is granted, except that a sale following a foreclosure may be accompanied by an assumption of the lease with the consent of the tribe.
(f)Notwithstanding any other provision of this chapter, the insurance of a mortgage using the authority contained in this section shall be the obligation of the Mutual Mortgage Insurance Fund. The mortgagee shall be eligible to receive the benefits of insurance as provided in section 1710 of this title with respect to mortgages insured pursuant to this section, except that all references in section 1710 of this title to section 1709 of this title shall be construed to refer to the section under which the mortgage is insured.
(g)(1)The Secretary shall make information regarding the status and payment history of loans insured under this section available to local credit bureaus and prospective creditors. Prior to accepting assignment of a mortgage, the Secretary shall require mortgagees to submit documentation that mortgagors have been counseled in a face-to-face interview, informed of the provisions of this subsection or other available assistance, and provided with the names and addresses of officials of the Department of Housing and Urban Development to whom further communications shall be addressed.
(2)Notwithstanding the requirement for conveyance of title under section 1710 of this title, a mortgagee under this section shall be entitled to receive the benefit of insurance under this section in the case of a mortgage which is more than 90 days in default upon conveyance of the lease agreement and the mortgage documents.
(3)In the event that any default is cured, the Secretary shall seek to reinstate the loan with the mortgagee or another mortgagee. For purposes of this paragraph, the Secretary may provide appropriate financial incentives to reinstate the loan commensurate with sound management of the General Insurance Fund.
(4)If the Secretary determines that a mortgagor is not making a good-faith effort to cure a default, and that trust fund or tribal income is available under subsection (b)(3)(B), the Secretary shall commence proceedings for the garnishment of the mortgagor’s distributed share of tribal or trust fund income in order to collect loan payments that are past due. Proceedings under this paragraph may be instituted in a tribal court, court of competent jurisdiction designated by the tribe, or Federal district court.
(5)If the Secretary determines such action is necessary to protect the General Insurance Fund from undue loss, the Secretary may initiate foreclosure proceedings with respect to any mortgage acquired under this subsection. Such proceeding may take place in a tribal court, a court of competent jurisdiction, or Federal district court. Any such court shall have jurisdiction to convey to the Secretary the remaining life of a lease on the real property and to order eviction of the delinquent mortgagor.
(h)In the administration of this section, the Secretary shall establish a premium charge for insurance that will be sufficient to cover the full costs of the mortgage insurance program under this section, except that such charge may not exceed 3 percent per annum of the principal amount of the mortgage outstanding at any time. Not later than September 30, 1984, the Secretary shall determine and report to the Congress on the feasibility of eliminating any excess amount of the premium under this section over the premium under section 1709 of this title. In the event such premiums are not sufficient to cover the full costs of the mortgage insurance program under this section, the Secretary shall make recommendations to the Congress about changes to the program.
(i)For purposes of this section:
(1)The term “Indian tribe” means any Indian or Alaska native tribe, band, nation, or other organized group or community of Indians or Alaska natives recognized as eligible for the services provided to Indians or Alaska natives by the Secretary of the Interior because of its status as such an entity, or that was an eligible recipient under chapter 67 of title 31, prior to the repeal of such chapter.
(2)The term “trust or otherwise restricted land” means (A) that area of land, as defined by the Secretary of the Interior, over which an Indian tribe is recognized by the United States as having governmental jurisdiction; (B) land held in trust for the benefit of any Indian tribe or individual or held by any Indian tribe or individual subject to a restriction by the United States against alienation; or (C) land acquired by Alaska natives under the Alaska Native Claims Settlement Act [43 U.S.C. 1601 et seq.] or any other land acquired by Alaska natives pursuant to statute by virtue of their unique status as Alaska natives.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
The Housing and Community Development Act of 1974, referred to in subsec. (b)(3)(A), is Pub. L. 93–383, Aug. 22, 1974, 88 Stat. 633. Title I of the Housing and Community Development Act of 1974 is classified principally to chapter 69 (§ 5301 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see
Short Title
note set out under section 5301 of Title 42 and Tables. Chapter 67 of title 31, referred to in subsec. (i)(1), was repealed by Pub. L. 99–272, title XIV, § 14001(a)(1), Apr. 7, 1986, 100 Stat. 327. A new chapter 67 of Title 31, Money and Finance, was added by Pub. L. 103–322, title III, § 31001(a), Sept. 13, 1994, 108 Stat. 1859. The Alaska Native Claims Settlement Act, referred to in subsec. (i)(2), is Pub. L. 92–203, Dec. 18, 1971, 85 Stat. 688, which is classified generally to chapter 33 (§ 1601 et seq.) of Title 43, Public Lands. For complete classification of this Act to the Code, see
Short Title
note set out under section 1601 of Title 43 and Tables.
Amendments
2008—Subsec. (f). Pub. L. 110–289 substituted “Mutual Mortgage Insurance Fund” for “General Insurance Fund established in section 1735c of this title” and struck out “(1) all references in section 1710 of this title to the Mutual Mortgage Insurance Fund or the Fund shall be construed to refer to the General Insurance Fund; and (2)” after “except that”. 1988—Subsec. (a)(1). Pub. L. 100–242, § 429(i)(1), substituted “land” for “lands”. Subsec. (a)(2). Pub. L. 100–242, § 429(i)(2), substituted “on trust or otherwise restricted land” for “on trust lands or otherwise restricted land”. Subsec. (d). Pub. L. 100–242, § 429(i)(3), substituted “trust or otherwise restricted land” for “tribal or trust land”. Subsec. (f). Pub. L. 100–242, § 413(c)(3), added subsec. (f). Former subsec. (f) redesignated (g). Subsec. (g). Pub. L. 100–242, § 413(c)(1), (2), redesignated former subsec. (f) as (g) and substituted “General Insurance Fund” for “insurance fund” in pars. (3) and (5). Former subsec. (g) redesignated (h). Subsecs. (h), (i). Pub. L. 100–242, § 413(c)(2), redesignated former subsecs. (g) and (h) as (h) and (i), respectively. 1986—Subsec. (h)(1). Pub. L. 99–272 substituted “was an eligible recipient under chapter 67 of title 31, prior to the repeal of such chapter” for “is an eligible recipient under chapter 67 of title 31”.
Statutory Notes and Related Subsidiaries
Effective Date
of 1986 AmendmentAmendment by Pub. L. 99–272 effective Oct. 18, 1986, see section 14001(e) of Pub. L. 99–272.
Reference
Citations & Metadata
Citation
12 U.S.C. § 1715z–13
Title 12 — Banks and Banking
Last Updated
Apr 6, 2026
Release point: 119-73