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The VA’s little-known program for Native American veterans

The VA's premier lending program for Native American veterans yielded just 89 loans in the continental U.S. from 2012 to 2021

A Department of Veterans Affairs lending program for Native American veterans has been severely underutilized, a government watchdog found.

According to a report the Government Accountability Office published this week, the VA’s Native American Direct Loan program only resulted in 89 loans originated in the continental U.S. from 2012 to 2021. This represents less than 1% of the estimated potentially eligible population of 70,000 veterans, the watchdog agency said.

The GAO said that the VA lacked the staff to run the lending program and failed to inform communities that it exists. Federal law requires the VA to implement an outreach program in consultation with tribal organizations to inform Native American veterans about the program.

The GAO’s investigation also found that the VA does not collect useful data related to the program’s outreach, loan processing, and negotiations of program participation agreements with federally recognized Indian tribes.

In a statement, a VA spokesperson said that from 2018 to 2020, the agency performed over 100 dedicated national outreach events, exceeding the annual outreach program performance requirements.

The GAO’s report said that from 2012 to 2021, 91 loans were originated in Hawaii using the program. In the entire country, 180 loan originations resulted from the program from 2012 to 2021.


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The GAO launched its investigation after members of Congress, advocacy organizations and other stakeholders started raising questions about the effectiveness of the program’s outreach efforts.

The program has existed since 1992, when Congress required the VA to help eligible Native American veterans purchase, construct or improve homes on tribal territories, which are subject to legal restrictions, the report said.  The Department of Housing and Urban Development and the United States Department of Agriculture have similar programs.

But HUD and the USDA have had relatively more success than the VA in approving federally recognized Indian tribes to participate in their programs. As of July 2021, HUD and the USDA had approved at least 100 more eligible tribal entities than the VA program.

In response to the GAO’s investigation, the VA pointed to the lack of examples of other lending programs with participation results dramatically more successful than its own. The GAO replied that the other programs do not consistently collect data on whether a borrower is a veteran, and besides that, the “differences in program and other requirements limited the benefits of such comparisons.”

Part of the problem with the VA’s program, the GAO argued, is a procedural bottleneck. The VA program has an additional step for approving tribal entities, which requires tribes to sign a memorandum of understanding. This memorandum authorizes a tribe to serve as a trustee, in turn protecting the VA’s financial interests in case of foreclosure and resale of collateral.

The watchdog says that this complicated and lengthy step severely limits the number of Indian tribes that can participate. The report said that as of of September 2021, 70% of federally recognized Indian tribes in the nation did not have memorandums of understanding, a step the HUD and the USDA do not require.

Another issue, the GAO said, is that the VA did not have a dedicated team running the Native American Direct Loan program until a year ago. Instead, staff in VA’s regional loan centers worked on the program on an as-needed basis.

In September 2021, the VA created a team of seven members to run the program. But there has been no detailed plan that outlines the programs priorities or the departments outreach goals, the report said.  

Going forward, the watchdog recommended the VA comprehensively assess what it needs to monitor and oversee program outreach and memorandum of understanding negotiations. The watchdog said that the department’s current data systems are missing certain information such as the status of the negotiations, which results in inaccurate and untimely data.

The GAO also recommends the VA holds focus groups to collect feedback from Native American veterans on ways to improve. The agency also recommended the VA develop and implement processes to routinely and consistently review the program’s documents to help ensure that they are accurate.

By making those changes, the GAO wrote, the VA will be “better positioned to realize the intended benefits of its new [Native American Direct Loan] staffing structure and recognize—and act on— opportunities to meet the housing needs of Native American veterans.”

EDITOR’S NOTE: This story has been updated with a statement from the VA.

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