Easy qualifying. Low closing costs. No downpayment. The only direct loans by the Veterans Affairs, made for Native American veterans.
These are the winning features that make up the VA’s Native American Direct Loans program. Eligible veterans can use these loans to buy, build, or improve their homes located on Federal Trust Land, as well as refinance their existing direct loans to lower their rate.
Are you eligible for this VA loan? Find out here. Click here to know more about VA’s other loan programs.
Benefitting From Native American Direct Loans
This program benefits American Indian veterans and their families, offering them home loans directly made by the VA. Native American Direct Loans accord eligible veterans like you a long list of benefits including but not limited to:
1. Easy qualifying. VA loans are less stringent when it comes to qualifications of their borrowers. Being the lender, it’s up to the VA to approve direct loans but you can always seek the help of a VA personnel.
2. No down payment. Direct loans also adopt the VA’s no down payment and 100% financing. And despite the zero down, NADLs don’t have private mortgage insurance premiums.
3. Benefit can be reusable. Eligible VA borrowers usually have full entitlement when they use their benefit for the first time, e.g. buy a home. This allows veterans to borrow up to the maximum loan amount and thus eliminate the down payment. After their first use, there could be entitlement left that can be used for the next VA transaction.
4. Low closing costs. You pay nothing for your down payment and you will likely save on closing costs. The VA is very particular with closing costs that are to be included in the loan so this keeps your costs at bay.Let’s help you find a lender.
Qualifying for a Native American Direct Loan
Eligibility for a Native American direct loan starts with a memorandum of understanding between your tribe and the VA. The MOU will govern how the program will operate on each tribe’s trust land.
For purposes of the VA, a tribe can be any Indian tribe, band, nation or organized group or community of American Indians, including Alaska Native, eligible for special programs and services of the federal government under the Indian Self-Determination and Education Assistance Act of 1975.
Eligible uses for Native American Direct Loans are: (i) buying a home, (ii) constructing a home, (iii) improving a home, or (iv) refinancing an existing direct loan with the subject property located on a federal trust land.
Just like for any other VA loan, you need to present a Certificate of Eligibility, or COE to qualify for a home loan and determine your entitlement. You must occupy the property securing the mortgage as your principal residence.
The VA also requires that you be a satisfactory credit risk. Your income, including your spouse’s, is needed to be steady and sufficient so you can meet your mortgage payments and pay for other monthly debts and living expenses.
These mortgages are 30-year fixed-rate home loans and their interest rate is at 4%, subject to changes made by the VA. As noted earlier, one can borrow up to $424,100 in most counties and $636,150 in high-cost counties.
Every time you take out a VA loan, you pay a funding fee. For example, there’s a funding fee of 1.25% of the loan amount when you buy a home and at least 0.50% when you refinance.
Contact your Regional Loan Center to know more about this Native American direct loan.Click to See the Latest Mortgage Rates»