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Veterans Housing and Mortgages Continue to Rise for Tribes

One hundred tribes have signed MOUs, passing 1,000 loans from the VA’s Trust Land Mortgage Program to assist with veteran housing and mortgages.
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The Department of Veterans Affairs has passed the 1,000 mark in the number of direct mortgages it has made to American Indian veterans of some 100 tribes.

As of May of last year the number of loans stood at 1,010, with total financing of $120 million, according to a VA presentation. That is an average of $120,000 per loan.

The program mandates that veterans’ tribes sign a memorandum of understanding (MOU) with the VA before veterans can receive financing. As of last May 97 MOUs had been signed with tribes.


Tribes have continued to sign up for the program in 2017, with the Morongo tribe recently becoming the first in southern California to sign an MOU.

“Historically, securing a home loan has always been an extremely difficult process for Native Americans, and it’s exponentially harder if the property is located on reservation land,” said Morongo chairman Robert Martin. “This agreement will help ensure that our tribal veterans who have honorably served in the U.S. military will be able to purchase, construct, or improve a home for their families, and that the terms of that loan will be fair.”

“The VA Native American Direct Loan is an excellent option when a mortgage lender is unwilling or unable to make a loan on trust land,” VA director of loan guaranty services Jeffrey London said at a ceremony to mark the agreement on the Morongo reservation, which is near San Diego.

The tribe noted that VA’s Native American Direct Loans are offered with no down payment, no private mortgage insurance and competitive interest rates, which are now four percent.

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The tribe has adopted foreclosure, eviction, priority of lien and other procedures called for in the NADL program.

Native veterans are also eligible for the regular VA home loan program that is open to all veterans, but there are significant differences. The general VA loan is made by a private lender and guaranteed by the VA. In the NADL, VA itself lends directly to the veteran. This eliminates the private lenders, who have been reluctant to lend on reservation trust land.

The NADL program is dwarfed by the other main mortgage lending program specifically for Indians. The Department of Housing and Urban Development’s Section 184 guaranteed Indian mortgage has guaranteed nearly 40,000 mortgages for a total of $6.4 billion. However, the bulk of the HUD 184 money has gone to Indians living off reservation. Around 4,000 mortgages have been made on reservations.

The loan can be used to purchase, construct or improve a home on trust land. It can also be used to simultaneously purchase and improve a home and also to refinance an NADL mortgage.

The veteran must use the home as his or her principal residence. Rentals and investment properties are not allowed.

The funding fee, 1.25 percent for active duty members and two percent for Guard/Reserve members, can be financed along with the loan, and waived if the veteran is receiving service-related disability pay.

Additional fees can include the VA appraisal, title review fees, state and/or local transfer taxes, recording fees, survey fee, and hazard insurance premium.

New Mexico tribes have been active users of the program, with 15 tribes with MOUs with the VA. Washington state has 10 tribes in the program.

Besides the Morongo, just three other California tribes have signed MOUs.