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Home Loans

Native American Direct Loan

Since 1992, the Native American Veteran Direct Loan (NADL) program has provided eligible Native American Veterans and their spouses the opportunity to use their Department of Veterans Affairs (VA) home loan guaranty benefit on Federal trust land.

The Nelms home in NC

Table of Contents

What is a NADL?

Why Use the NADL Program?

How to Use the NADL Program

Am I Eligible to Use the NADL Program?

Is There a Fee Associated with the NADL Program?


What is a NADL?

VA provides direct home loans to eligible Native American Veterans to finance the purchase, construction, or improvement of homes on Federal Trust Land, or to refinance a prior NADL to reduce the interest rate.

Why Use the NADL Program?

  • The lender is the Department of Veterans Affairs
  • Dedicated VA staff to assist you
  • No downpayment
  • Easy to qualify
  • No Private Mortgage Insurance cost
  • 3.75% interest rate.  Interest rates are subject to change due to market fluctuations.  VA evaluates these market trends and determines if interest rate reductions or increases are warranted.
  • Low closing costs
  • $417,000 loan maximum limit in most areas; some high-cost counties have higher loan limits
  • Fixed-rate 30-year mortgage
  • Re-usable benefit

How to Use the NADL Program

To obtain a NADL, the law requires that the tribal government must have signed a Memorandum of Understanding (MOU) with the Secretary of Veterans Affairs. The MOU spells out the conditions under which the program will operate on its trust lands. See a sample MOU at this link

To see if your tribe has a MOU with the Department of Veterans Affairs, please click on this link

Am I Eligible to Use the NADL Program?

  • You must have a valid Certificate of Eligibility to be eligible for the VA home loan benefit and have available entitlement. Please visit this page for information on how to get a Certificate of Eligibility.
  • The loan must be to purchase, construct, or improve a home on Federally-recognized trust, allotted lands, Alaska Native corporations and Pacific Island territories.
  • You must occupy the property as your home.
  • You must be a satisfactory credit risk.
  • Your income and that of your spouses, if any, must be shown to be stable and sufficient to meet the mortgage payments, cover the other costs of owning a home, take care of other obligations and expenses, and have enough left over for family support.

Is There a Fee Associated with the NADL Program?

Native American Veterans must pay a low funding fee of 1.25% to obtain VA's direct loan to purchase a home. The funding fee to refinance a prior VA loan is a minimal 0.50%. Borrowers have the option to finance the VA funding fee or pay it in cash, but the funding fee must be paid at the time of loan closing. You never have to pay the funding fee if you are a:

  • Veteran receiving VA compensation for a service-connected disability, OR
  • Veteran who would be entitled to receive compensation for a service-connected disability if you did not receive retirement or active duty pay, OR
  • Surviving spouse of a Veteran who died in service or from a service-connected disability.

For more information on the NADL program, please contact the Regional Loan Center of jurisdiction.

 

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