Federal Indigenous Affairs Minister Nigel Scullion has been urged to intervene to stop the auction of 37 homes in Toowoomba.
The properties were previously owned by the Downs Aborigines and Islanders Company, set up with federal government funds in 1983 to provide secure housing to the Indigenous community.
But in 2016, ownership was transferred to a private company, Downs Housing, which later defaulted on mortgage payments.
Now the homes - worth more than $6 million - are set to be auctioned by mortgagee sale on Saturday, leaving more than a hundred Indigenous tenants when their leases run out in April or May.
Gary Oliver, CEO of the National Congress of Australia's First Peoples, says the federal government should buy the properties and convert them to social housing.
Speaking on The Point on Wednesday, Mr Oliver said the move would be a fitting way for the outgoing Indigenous Affairs Minister to end his tenure.
60-year-old Allison Duncan says she doesn't know where she'll go if forced to leave her Toowoomba home of 12 years. Source: NITV
"There is a solution and it’s a legacy item of Nigel Scullion – Nigel, come and buy these houses," Mr Oliver said.
"We had a national partnership agreement for remote Indigenous houses that did not service urban areas, so urban housing has suffered for many years.
"I’m sure it was federal money that bought these houses – Nigel, here’s your legacy item."
However a spokesperson for Mr Scullion told NITV News that responsibility rests with the state government.
"The Minister has written to the Queensland Government to demand that it step up and take its responsibility for social housing and ensure proposer support for the residents of the Downs Housing properties," they said in a statement.
"It is clearly the Queensland Government’s responsibility and the Queensland Government that needs to step up and utilise the already significant funding we have provided to support their Aboriginal and Torres Strait Islander residents that have been affected by this issue."
Queensland Housing Minister Mick de Brenni has previously ruled out buying the properties, claiming it "isn't the right move" and "doesn’t take into account the individual needs of families".
Meanwhile, the Queensland Greens have backed calls for an investigation into the dealings which led to the mass eviction.
"The state government – Mick de Brenni, Jackie Trad – they could step in immediately and make sure that the auction doesn’t go ahead, and they need to do that," Queensland Greens MP Michael Berkman told media on Thursday.
"What we also need to see is the Queensland police and the federal regulator, ASIC, investigate what has gone on behind the scenes here – has there been some kind of fraud that’s led us to this point?"
