source:
  type: guide
  id: hud-4000-1-ii-a-section-248-indian-land-program
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Section
    248 Indian Land Program (09/14/2015)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Section
    248 Indian Land Program (09/14/2015).
  coverage_tier: operative
obligations:
- id: hud-4000-1-ii-a-section-248-indian-land-program-full
  canonical_id: hud-4000-1-ii-a-section-248-indian-land-program-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Section
    248 Indian Land Program (09/14/2015)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Section
      248 Indian Land Program (09/14/2015)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'a. Section 248 Indian Land Program (09/14/2015) i. Property
      Rights to be Appraised The Appraiser must identify the interest to be appraised
      based on the type of ownership. (A) Fee Simple Unrestricted Fee Simple Unrestricted
      ownership refers to ownership in Real Property that may be bought, sold and
      transferred between Native American and non-Native American purchasers without
      review by the tribe or the Bureau of Indian Affairs (BIA). (B) Tribal Trust
      Lands, Restricted Trust Land (1) Standard The FHA Section 248 program insures
      Mortgages on houses that are located on Indian tribal trust land or Restricted
      Trust Lands. For these Properties, leased ownership of the underlying land remains
      with the tribe and will be subject to a long-term, 50-year ground lease (or
      a 25-year lease with a 25-year renewable term). (2) Required Analysis and Reporting
      The Appraiser must determine the value for the Leasehold Estate using the analysis
      and reporting guidance on Leasehold in this Handbook 4000.1. ii. Access to Property
      Tribally owned and maintained streets and utilities are considered publicly
      owned. The Appraiser must report Easements and maintenance agreements for nonpublic,
      common ownership interests that affect the access and utility of the Property.
      iii. Approaches to Value The Appraiser must be familiar with the applicable
      ownership and use restrictions and develop a credible value for the Property.
      The supply of comparable sales and rental transactions varies by site and by
      tribe. Until sufficient sales exist on a reservation or within the specific
      Indian area to provide a reasonable sales comparison approach for determining
      the value of tribal trust Leaseholds or allotted land sales, the Appraiser must
      rely on other value indicators. The appraisal process must be documented more
      thoroughly than a typical market appraisal. USPAP Standards 1 and 2 are effective
      in allowing the Appraiser to “correctly employ those recognized methods and
      techniques that are necessary to produce a credible appraisal.” In addition,
      “in reporting the results of a Real Property appraisal an appraiser must communicate
      each analysis, opinion and II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      D. Appraiser and Property Requirements for Title II Forward and Reverse Mortgages
      11. Programs and Products Handbook 4000.1 865 Last Revised: 11/26/2025 conclusion
      in a manner that is not misleading.” An appraisal on trust land may rely more
      on the cost approach or data developed from other tribes. HUD will accept the
      report if the Appraiser has documented the research, information developed and
      conclusions clearly for the intended users to understand. iv. Cost Approach
      to Value The cost approach is often the primary indication of value based on
      the unique nature of land rights in the reservation. The value of the site as
      vacant will depend on the property rights held by an individual. If the Appraiser’s
      analysis indicates that the value of the site may be zero or a small Leasehold
      value, the Appraiser must enter this information in the “Cost Approach” section
      of the form and enter the statement “subject is on Tribal Trust Land with annual
      rent not capitalized” in the “Comments” section. If a market exists and an interest
      in the land was purchased, the value is estimated via traditional cost approach
      methods described in this Handbook 4000.1. (A) Cost Approach for New Construction
      The following are instructions specific to New Construction on tribal lands.
      In addition to including the cost of water, septic, and any other onsite costs
      in the cost approach, for lands within the reservation the Appraiser may provide
      an allowance for off-site development costs. The lesser of actual pro-rated
      costs or up to 15 percent of the cost of the construction of the subject house
      may be added for off-site infrastructure associated with development of the
      subject lot. This policy applies principally to New Construction where such
      charges are assessed by tribally approved entities, such as housing entities
      or housing authorities, or agreements with other federal or local government
      bodies for providing power, utilities, sewer, water or road construction. The
      costs to bring utilities, including public water, sewer, electricity and telephone,
      to sites represent significant development costs. The traditional tract development
      of residential houses may not be a part of the local culture. Therefore, the
      utility costs to hook up to any form of a public system in a more rural area
      can exceed local standards. In remote areas, the construction costs in construction
      cost manuals may have to be adjusted for transportation, labor or other costs
      not included in the basic estimate. Architect fees are not typically reflected
      in the base building costs. Due to special circumstances, the normal allocation
      for this fee may not automatically reflect the above actual cost. The Appraiser
      must provide a supporting explanation for the adjustments to the construction
      costs. (B) Cost Approach for Existing Construction Where market sales are limited,
      FHA requires the cost approach to be completed on all tribal trust appraisals,
      including a credible estimate of depreciation. In addition to developing the
      cost approach described in this Handbook 4000.1 the Appraiser must report the
      following: II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT D. Appraiser and
      Property Requirements for Title II Forward and Reverse Mortgages 11. Programs
      and Products Handbook 4000.1 866 Last Revised: 11/26/2025 • the name of the
      cost service; • the source and date, if electronic version. Upload as an exhibit
      into the report when available; • the page numbers of cost tables or factors,
      if paper version. The reviewer or reader must be able to replicate; • all current
      multipliers applicable to locale and time as updated and published by the cost
      service used; and • depreciation due to normal aging, which may be derived from
      the tables in the cost service book. A computer-generated cost analysis is acceptable
      in place of the above as long as the printout contains sufficient information
      to verify that all significant property features have been properly addressed
      in the cost analysis. v. Sales Comparison Approach to Value The Appraiser must
      follow the Sales Comparison Approach instructions outlined in this Handbook
      4000.1. In addition to the typical data sources the Appraiser must obtain sales
      information from the local tribal or BIA realty office if available. The Appraiser
      may consider sales from other reservations within the region if appropriate.
      The order of selection preferences for sales depends upon the type of interest
      in the land being appraised: • tribal trust Leasehold sales (market sales between
      tribal members); • sales of allotted land trust between tribal members; • Fee
      Simple within the reservation (residual value of the improvements by adjusting
      out the land contribution); or • Fee Simple proximate to the reservation. The
      Appraiser must report the property rights in the “Ownership” line of the SCA
      Grid and apply an appropriate adjustment (if any). In addition, the Appraiser
      must explain the differences in ownership rights of the comparable properties
      as compared to the subject, and the basis for any adjustment. vi. Income Approach
      to Value If the Appraiser determines that this approach can be credibly completed,
      refer to the income approach section in this Handbook 4000.1. If the Property
      includes a rental unit(s), the Appraiser must provide an estimate of monthly
      rent for each unit and note if the rent is limited to the tribal sub-market.
      vii. Final Reconciliation of Value The Appraiser must follow the final reconciliation
      of value instructions outlined in this Handbook 4000.1. Where market information
      is limited and the support for the sales II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      D. Appraiser and Property Requirements for Title II Forward and Reverse Mortgages
      11. Programs and Products Handbook 4000.1 867 Last Revised: 11/26/2025 comparison
      analysis is weaker, the Appraiser may need to place greater consideration on
      the cost approach.'
  judgment: false
