As of March 13, 2023, the Department of Veterans Affairs lowered interest rates for VA Native American Direct Loans (NADL) from 6% to 2.5%. This significant drop in interest rates allows eligible Native American Veterans and those married to Native Americans to get VA Loans for homes on federal trust lands at a lower rate for the next two years.
Native Americans have participated in every major US military encounter, from the Revolutionary War to current conflicts in the Middle East. The lowered interest rates allow Native American Veterans greater access to high-quality and affordable housing. The VA NADL offers loans to Native American Veterans and active-duty personnel to help them purchase, build, or improve property on trust land with no down payments or monthly mortgage insurance and limited closing costs. Note that Veterans who close their NADL loans on or after March 13, 2023, will automatically receive the 2.5% interest rate for the life of the loan.
There’s a time limit on the lowered interest rates
The 2.5% interest rate for the NADL became effective on March 13, but it will be available for only 24 months. So, it’s vital that any eligible Native American borrowers take advantage of the lowered rates during this timeframe because afterward, interest rates on NADL loans will jump back up. Also, within the 24 months, any Veterans who currently have a NADL with an interest rate of 3.5% or higher will be eligible to refinance their loan to receive the lower rate.
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The lower interest rate is only good for purchases on federal trust lands
Remember, Native American Veterans and active-duty servicemembers who aren’t purchasing or refinancing property on federal trust lands cannot receive direct NADL loans at the 2.5% rate. They can, however, get a traditional VA Home Loan. Contact any Aligned Mortgage loan officer to check your eligibility for a VA Home Loan.
Eligibility requirements for an NADL
You may be eligible for an NADL if you’re either a Native American Veteran or a non-Native American who is married to a Native American and you meet all of the following requirements:
- Your tribal government has an agreement – or Memorandum of Understanding (MOU) – with the Veterans Administration detailing how the program will work on its trust lands
- You have a valid VA Home Loan Certificate of Eligibility (COE)
- You meet the Veterans Administration’s credit standards
- You have proof that you earn enough money to cover the mortgage payments and other costs of owning a home
- You’ll live in the home you’re using the NADL to buy, build, or improve
Note that with a NADL, you will work directly with the VA to apply for and manage your loan. For more information, email NADL@va.gov or call 888-349-7541.
