Getting a home loan for any purpose—whether it is to buy, build, renovate or refinance—can be a highly difficult process. For Native people trying to build on their BIA trust or restricted land, it is an even more laborious process. The proverbial red tape can be miles long and go all the way to the Secretary of the Interior. However, through memorandums of understanding (MOU) with specific tribes, the Department of Veterans Affairs is finding ways to get home loans to Native veterans.
On February 5, the VA Loan Guaranty division expanded its Native American Direct Loan (NADL) program by signing an MOU with the Seminole Nation of Oklahoma. The signing took place at the Donald Reynolds Wellness and Community Center in Seminole, Oklahoma, with the signatures of Guaranty Loan Director Mike Frueh and Seminole Nation Chief Leonard Harjo making everything official. The MOU had been in development since at least 2014.
Harjo told ICTMN that the permanent MOU will “allow our Native American veterans to build a home on their land—land they grew up on, land in some ways they fought for. That’s something that has been denied them,” he said.
The MOU is the final step needed for Seminole veterans to obtain a NADL loan, which went into effect immediately after signing. The VA Loan Guaranty program has nearly 100 specific MOUs with tribal nations—nearly one-fifth of all the federally recognized tribes.
“We’ve still got a long way to go, but we have momentum going,” said Ivonne Perez, the national coordinator of NADL. “We’re going to continue on. Our goal is to have an MOU with every single one of our federally recognized tribes.”
The specifics of NADL include a current interest rate at 4 percent, with the maximum loan amount in most parts of the country being $417,000. Furthermore, the loan is directly from the VA, has simpler qualifications than other loans, and does not require a down payment. Although there is a funding fee of 1.5 percent on newly purchased homes and .5 percent for renovations, this amount may be rolled into the loan amount.
An additional benefit is that, according to Perez, VA loans have the lowest foreclosure rate in the country, especially with tribes where the MOU exists. “If there is a delinquency, a default or a foreclosure, the VA and the tribes work together to resolve that,” Perez said.
According to Harjo, a VA loan is “one of the best lending programs out there—no principal mortgage interest,” he said. “No down payments. They’re willing to work with people who may not have credit. This is one of the most tangible benefits available to veterans for the last 70-plus years.”
Although interest rates and loan amounts are measurable, home ownership, ultimately, provides more than holding a deed. It can provide a sense of security. This is one area that Perez emphasized beyond the numbers and monetary amounts.
“I truly believe one of the main things for health, for quality of life, for personal satisfaction is a home—a home you can call your own, a home for your family. It’s stability.”