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VA Loans for Native Americans
REQUIREMENTS FOR LOAN APPROVAL
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.
FREQUENTLY ASKED QUESTION # 10 [ -more VA Loan questions- ]
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Q: Adjustable Rates - Do I have to take a fixed-rate VA loan?
A: Veterans who shop around will learn it's possible to get a fixed rate loan, negotiated with the lender of your choice. Another option? The adjustable rate loan, where interest may be adjusted one percent annually, up to five percent over the duration of the loan period. Which to choose? No matter which way you think is best, do your homework, shop around and get the best rate possible. Some make the mistake of taking the first offer that sounds fair, but don't be intimidated by the process. You may be eager to get the "hard part" over with and get into a home. Take some time to research the biggest purchase of your life! When in doubt, consult an expert, a legal advisor or a trusted friend in the real estate business. The more research you do, the better you'll feel at closing time. The VA is in the business of loan guaranty, but the choice of which loan to take is strictly up to you. It's also a good idea to look for businesses who make a habit of cultivating customers who are veterans--you may find their expertise in VA matters quite valuable to reduce unnecessary waiting times on paperwork.
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Remember, the VA does not make home loans. They insure the loans that we can assist you in getting.
Let us help you get a VA insured mortgage loan at the lowest possible rates.
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