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Home Loans

Native American Direct Loan

The Native American Direct Loan (NADL) Program provides direct home loans from VA 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.

NADL Information Resources

Interest Rate

The interest rate is 4.0%.

NADL Benefits

  • No down payment; no Private Mortgage Insurance; limited closing costs
  • $417,000 limit in most areas; some high-cost counties have higher loan limits
  • Low, fixed-rate 30-year mortgage with limited closing costs
  • Re-usable benefit

Eligibility

To obtain a NADL, the law requires that:

  1. The Native American Veteran is eligible for VA home loan benefits and have available entitlement (go to this link for information on how to get a Certificate of Eligibility)
  2. 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 here)
  3. The loan must be to purchase, construct, or improve a home on Federally-recognized trust or allotted land.
  4. The Veteran must occupy the property as his or her home.
  5. The Veteran must be a satisfactory credit risk.
  6. The income of the Veteran and spouse, 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.
  7. All prospective applicants are encouraged to contact VA to determine if they are eligible for VA home loan benefits and to contact either their local housing authority or VA to find out if this program is right for them and to apply for a home loan.

Loan Fees

Native American Veterans must pay a 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 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 do not 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.

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