Native American Direct Loan Program Overview 2022

Veterans Benefits Administration VALoan Guaranty Service Native American Direct Loan (NADL) Program Overview October 2022 Preparedby: VA LoanGuaranty Service

Why we have the NADL Program VA provides direct loans for the purchase, construction, or improvement of a home to eligible Native American Veterans, or Veterans married to Native American non-Veterans, who reside on Federal Trust land. (Includes the refinance of existing NADLs). Program created in 1992. Most mortgage lenders will not make loans on Trust Land for several reasons: Tribes are Sovereign Nations. State Laws do not control Real Estate Transactions on Federal Trust Land. Obtaining a Security Interest on Trust Lands is difficult. Fills the void of credit scarcity due to private lenders not making loans on Trust Land. Intended to mirror the no down payment Loan Guaranty benefit that would otherwise be available to eligible Veterans through a third-party lender. 2

Determining Veteran Eligibility Native American Veterans with sufficient entitlement i.e. length of service, character of service. The tribal organization has a standing Memorandum of Understanding (MOU) with the Secretary of Veterans Affairs. The home is on trust/lease/allotted land. The Veteran or spouse is a member of the tribe. 3

Comparing VA Home Loan Programs VA NADL vs VA-Guaranteed Loan Native American Veterans may use either loan. Typically, no down-payment is required on either type of loan. NADL VA-Guaranteed Loan VA processes the loan VA approved lender processes the loan VA sets the interest rate Interest rate is negotiated with the lender Low closing costs Closing costs are negotiated with the lender within limits Lender originates the loan and VA guarantees the loan VA originates the loan 4

Memorandum of Understanding To obtain a NADL, the law requires that the tribal government must have signed an MOU with the Secretary of Veterans Affairs. The MOU spells out the conditions under which the program will operate on its trust lands. 110 MOUs have been entered into between Federally Recognized Tribes (574 in 2022) and traditional Pacific Islander communities, and VA. VA is currently working with 9 tribes who have expressed interest in Memorandum of Understanding establishing MOUs. Recent updates to annual correspondence with Federally Recognized Tribes and traditional Pacific Islander communities. A listing of NADL tribes is available online at: https://www.benefits.va.gov/homeloans/nadl_mou.asp 5

Closed NADL and Outreach Overview FY 2022 40 Closed Loans 21 Construction 10 Purchase 6 Renovation 3 IRRRLs 38 Outreach Events Note: As of October 5, 2022 6

Active Loan Volume Location Not depicted:American Samoa 157,Guam 11,Northern MarianaIslands 41 Note: As of August 31, 2022 7

Im a Veteran, how do I get started? 1. Contact an NADL Coordinator: Call: 1-888-349-7541 Email: NADL@va.gov 2. Ask your tribal territorial government representative and/or the Bureau of Indian Affairs (BIA) for: 1. A copy of your lease agreement 2. A recorded Title Status Report (TSR) from BIA 3. A copy of the archaeological survey. Memorandum of Understanding Submit a complete loan application with supporting documentation. 3. 4. A NADL Coordinator will work one-on-one through the loan application process. Note: The processing for an NADL requires the coordination of numerous entities (i.e. BIA, Indian Health Service, building contractors, the tribe, etc.) which may lead to potential delays, outside VA s control, in the loan process. 8

U.S. Government Accountability Office (GAO) Report Native American Veterans: Improvement to VA Management Could Help Increase Mortgage Loan Program Participations was issued in April 2022 GAO made 10 recommendations to VA on program aspects including data collection, performance measurement, planning, and leveraging expertise to mitigate barriers to NADL use. Report is available online at: https://www.gao.gov/products/GAO-22-104627 8

Draft Bill: Native American Direct Loan (NADL) Improvement Act Expansion of the NADL Program to allow Native American Veterans to use the NADL program to refinance existing non-NADL mortgage loans. Require VA to make grants to local service providers for conducting outreach, homebuyer education, housing counseling, risk mitigation, and other technical assistance, as needed, to assist Native American Veterans seeking to qualify for mortgage financing. Pilot relending program on relending of Direct Housing Loans by native Community Development Financial Institutions

Keys to Future Success Improved NADL Communication and opportunities to provide feedback Tribal Entities Veterans Partnership with other VA Entities Office of Tribal Government Relations Outreach, Transition, and Economic Development Service Strategic Program Management Office Veterans Experience Office Continued expansion of outreach Veteran Tribes Native Partners Tribal Veterans Service Organizations Program Utilization in Alaska Ongoing review/updates to NADL policy/guidance Loan Guaranty Service has a fully staffed team dedicated to improving program awareness and utilization across all tribal lands. 9

NADL Resources List of Tribes with Memorandum of Understanding NADL Program Fact Sheet NADL Marketing Fact Sheets: Arid regions Tropical regions Great Plains Snow-Covered Regions Native American Direct Loan (NADL) Improvement Act 12

NADL Contact Information Contact the NADL Team by: Calling: 1-888-349-7541 Emailing: NADL@va.gov 13