1. It is vital that instructions are followed as stated in the correct sequence. Not following the procedure properly may invalidate the heter iska.

2. Before signing a mortgage or loan document, both parties (investor and recipient) should orally state that their agreement is in accordance with the terms and conditions of this heter iska.

3. If there is a mortgage or loan document, it should be completed and signed. No changes or additions to that document are necessary.

4. The investor must give the recipient $1.00 (in addition to the investment) as wages for his labor. This dollar is a salary – it is not returned and is not included in the sum of money specified on the heter iska.

5. The heter iska must be filled out completely. The investor and recipient must sign at the bottom in the presence of a witness. The witness must be valid according to the law of the state in which the heter iska is executed.

6. When filling in the percentage, use the percentage equivalent to the amount found on the mortgage or loan document. If the rate is not fixed, enter the agreed upon amount (e.g. if it is the prime rate plus 2%, enter prime+2%).

7. If you have any further questions, contact your rav.

A downloadable heter iska form is available on our site for your convenience.