Native American Direct Loan
Native American Direct Loan (NADL) VA Loan Program
The Native American Direct Loan (NADL) VA Mortgage Program is a type of VA mortgage program offered by the Veteran’s Administration. These mortgage loans are provided to Native Americans who are active military, veterans, or surviving spouses.
The mortgages may be used to purchase, build or improve a residence on Federal Trust Land. The borrower may also get NADL to refinance an existing NADL mortgage and reduce its interest rate. Specific requirements must be met to qualify for a NADL mortgage.
What is the VA Native American Direct Loan Mortgage Program?
A VA home loan is a mortgage offered through a U.S. Department of Veterans Affairs program. VA home loans are available to active military, veterans, and their surviving spouses. The federal government backs these types of mortgages.
What are the benefits of a Native American Direct Loan (NADL) mortgage?
1. No down payment, private mortgage insurance, and low closing costs.
2. Below average fixed interest rates and 30-year fixed mortgage.
3. Ability to refinance a current NADL mortgage loan and the ability to borrow up to the Freddie Mac and Fannie Mae conforming loan limit
4. Reusable benefit
What are the requirements for a NADL VA Loan?
1. The veteran borrower must be an active military, veteran, or surviving spouse.
2. The tribal government has an agreement with Department of Veterans Administration; it is called a Memorandum of Understanding. This MOU will detail how the direct loan program will work on its federal trust lands. The veteran borrower must check with their lender to ensure the lender is approved to make direct home loans on federal trust land.
3. The Native American veteran borrower must have a valid Certificate of Eligibility.
4. The Native American veteran borrower must meet the VA loan qualifications and credit standards, meet the debt-to-income guidelines, and provide proof of income.
5. The property in which they will use the NADL to purchase, build or make improvements.
Are there any additional fees with a NADL Mortgage Loan?
The veteran borrower may need to pay a one-time fee known as the VA funding fee. The VA funding fee is a one-time fee paid to the Department of Veterans Affairs, supporting the VA loan program. Veterans who put down less than 5% on their home purchase will pay 2.15% of the loan amount when buying a home for the first time, and they’ll pay a funding fee of 3.3% on subsequent loans.
How does the NADL work with Native American Tribes?
The Veterans Administration first enters an agreement, a Memorandum of Understanding (MOU), with Native American Tribes. Once completed, the veteran borrower may apply for a NADL mortgage loan.
Suppose the veteran borrower wants to purchase, build or make improvements on a property or residence not located on Federal Trust Land. In that case, they must apply for a different VA program.
What is a Memorandum of Understanding (MOU) used for?
The Memorandum of Understanding (MOU) is the agreement between a federal government and a Native American Tribe. The MOU will set out the rights and responsibilities of both Governments with respect to access to the land, default and foreclosure proceedings, and other legal rights and obligations. The Native American tribe will be responsible for entering into a lease agreement for the land where the property is located or where the home may be built.
How does a Veteran Borrower obtain a NADL?
The veteran borrower must receive a Certificate of Eligibility for a VA NADL mortgage loan.
The veteran borrower must be active-duty military or honorably discharged from service.
The veteran borrower must be an eligible veteran have served for at least 90 continuous days. If they have served 30 days of wartime, they may be eligible.
Are there any options if the NADL Veteran Borrower does not meet the Minimum Requirements for a Certificate of Eligibility (COE)?
They may still be eligible if discharged for one of the following reasons.
1. Hardship or Early Out (they must have served 21 months of a two-year enlistment).
2. The convenience of the government (they must have served 20 months of a two-year enlistment.
3. Certain medical conditions or a disability related to their military service
4. Reduction in force.
Additional situations to receive a Certificate of Eligibility
A NADL veteran borrower may be eligible if they meet one of these requirements:
They are United States Citizens who served in the military of an allied government with the United States during World War II
They served in specific organizations:
Public Health Service Officer
Cadet at the United States Military, Air Force, or Coast Guard Academy
Midshipman at the United States Naval Academy
Officer of the National Oceanic and Atmospheric Administration
Merchant Seaman during World War II
Conclusion of NADL VA Home Loans
NADL VA direct home loans are a type of mortgage loan offered by the U.S. Department of Veterans Affairs (VA) to eligible Native American veterans or their spouses. These loans provide a range of benefits, including no down payment requirement, no private mortgage insurance, and flexible credit and income guidelines. They can be used to purchase, build, or improve a home on Federal Trust Land, Native American Trust Land, or fee simple land. NADL VA home loans also offer competitive interest rates and can be used for refinancing existing mortgage loans.
Please read through this article, and if you have questions, we are here to assist.
Please call us at 1-866-713-9292 or apply online.
