VA Loans for Native Americans

Loan Requirements and Costs

To obtain a VA direct loan, the law requires that:

• The applicant must be an eligible Native American veteran who has available entitlement.
• The tribal organization or other appropriate Native American group must be participating in the VA direct loan program. The tribal organization must have signed a Memorandum of Understanding with the Secretary of Veterans Affairs which spells out the conditions under which the program will operate on its trust lands.
• The loan must be to purchase, construct, or improve a home on Native American trust land. Individually allotted land is considered trust land for this purpose.
• The veteran must occupy the property as his or her home; a loan for rental or investment purposes is not permitted.
• The veteran must be a satisfactory credit risk.
• 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.
• We would encourage all prospective applicants to first contact either their local housing authority or the nearest VA regional office to discuss their financial situation and obtain a general idea of whether or not they might qualify for a home loan.

COSTS OF OBTAINING A VA DIRECT LOAN

A funding fee of 1.25 percent must be paid to VA except for veterans receiving compensation because of a service-connected disability. In the case of veterans who qualify based on service in the Reserves or National Guard which was not active duty, the funding fee is 2 percent of the loan amount. The funding fee may be paid in cash or it may be included in the loan.

Other closing costs may not be included in the loan. Closing costs may vary because of differing local laws and customs. The following items may be paid by the veteran purchaser, the seller, or shared:

• VA appraisal
• Credit report
• Loan processing fee of up to $300 to a party who processes your loan
• Title search and title insurance or other title review fee
• Recording fees
• State and/or local transfer taxes, if applicable
• Survey
• Hazard insurance premium

NOTE: No commissions, brokerage fees, finders fees, or "buyer broker" fees may be charged to the veteran buyer.

VA Direct Home Loans for Native Americans on Trust Lands

1. Introduction and Overview
2. VA Loan Eligibility and Application
3. Loan Requirements and Costs