VA Direct Home Loans for Native American Veterans Living on Trust Lands (On-Line Version)
WHO IS ELIGIBLE?
VA direct home loans are available to eligible Native American veterans who wish to purchase or construct a home on trust lands. Details on the military service requirements are spelled out below.
WHAT CAN THE LOAN BE USED FOR?
A VA direct loan can be used to purchase, construct, or improve a home on Native American trust land. These loans may also be used to simultaneously purchase and improve a home or to refinance another VA direct loan made under this program in order to lower the interest rate. VA direct loans are generally limited to the cost of the home, or the Federal Home Loan Mortgage Corporation single-family conforming loan unit, whichever is less. Contact a VA office with loan activities for information regarding the current loan limit and any other questions you may have concerning VA direct home loans. The addresses and toll free numbers of the VA office servicing your area can be found at the bottom of this page.
FIVE EASY STEPS TO A VA LOAN
HOW TO GET A VA DIRECT LOAN
Who is Eligible?
Veterans who were honorably released from active duty service, during World War II and later periods are eligible for VA loan benefits. World War II (September 16, 1940 to July 25, 1947), Korean conflict (June 27, 1950 to January 31, 1955), and Vietnam-era (August 5, 1964 to May 7, 1975) veterans must have at least 90 days service. Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 days active service. Veterans of enlisted service that began after September 7, 1980, or officers with service beginning after October 16, 1981, must in most cases have served at least 2 years.
Persian Gulf Conflict. Basically, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were honorably released from the period of activation are eligible.
Reservists. Members of the Selected Reserve, including the National Guard, who are not otherwise eligible and who have completed 6 years of service and have been honorably discharged or have completed 6 years of service and are still serving, are eligible. Ask VA about what is needed to establish eligibility. Reservists will pay a slightly higher funding fee than regular veterans. (See paragraph entitled "Costs of Obtaining a VA Direct Loan.")
VA DETERMINATION OF REASONABLE VALUE
The maximum loan amount may not exceed VA's estimate of the reasonable value of the property to be purchased. A qualified appraiser assigned by VA will perform the appraisal and make this determination. An application fee, collected from the veteran at the time of loan application, will be used to pay for the cost of the appraisal and for other expenses connected with the processing of the loan.
It is important to recognize that VA does not guarantee the value or condition of the property. Homebuyers should carefully inspect the property themselves, or have it inspected by a reputable inspection firm.
Loan Application
Contact either your local housing authority or VA to apply for the loan. The party processing the loan verifies the applicant's income and assets, and obtains a credit report to see that other obligations are being paid on time. If VA office reviewing the package determines that all is well and the appraised value of the property is enough to cover the loan needed, the loan will be approved and a date set for loan closing.
REQUIREMENTS FOR LOAN APPROVAL
To obtain a VA direct loan, the law requires that:
COSTS OF OBTAINING A VA DIRECT 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:
No commissions, brokerage fees, finders fees, or "buyer broker" fees may be charged to the veteran buyer.
NEED MORE INFORMATION?
Veterans seeking more detailed information concerning the VA direct loan program should contact their local housing authority or VA. Loan Guaranty personnel at VA will be pleased to answer specific questions and provide any other assistance they can.
If you are a Native American veteran interested in obtaining or improving a home on trust land, or know of someone who is, it makes sense to look into the VA direct loan program as a good way to finance a home purchase.