Native American Housing:

VA Could Address Some Barriers to Participation in Direct Loan Program

GAO-02-654: Published: Aug 23, 2002. Publicly Released: Aug 23, 2002.

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Several federal programs have been developed to provide homeownership opportunities for Native Americans because private institutions have rarely supplied conventional home loans to Native Americans on trust lands. In 1992, Congress directed the Department of Veterans Affairs (VA) to create the Native American Veterans Direct Home Loan Program to assist veterans in purchasing, constructing and improving homes. The Native American Veterans Direct Home Loan Program has been characterized by differences in the numbers served, with native Hawaiians and Pacific Islanders together receiving almost five times as many as loans as Native Americans. Several factors that apply to Native Americans, but not to native Hawaiians and Pacific Islanders, may explain this difference. Long-standing barriers to lending on Native American trust lands include insufficient income and credit history, a lack of meaningful interest in land among many Native Americans, and insufficient infrastructure on trust lands. Other factors that VA can address include program limits that may be lower than housing costs for some trust lands and potential applicants' inexperience with the mortgage lending process. VA has conducted outreach but has taken limited steps to meet the assessment and reporting requirements specified in the program's authorizing legislation. VA attends housing conferences, distributes promotional materials, and responds to inquiries about the program to meet outreach requirements specified in its authorizing legislation.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To increase opportunities for participation for all Native American, Native Hawaiian, and Pacific Islander veterans, the Secretary of Veterans Affairs should direct regional loan centers to obtain local housing cost data for trust lands to determine the need for exceptions to the current loan limit. Additional exceptions should be granted if the data support such increases.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: VA completed a study comparing average guaranteed loan amounts in areas contiguous to Federal Trust Land to the $80,000 limit currently in place. While VA continues to increase loan limits upon request by tribal authorities, no other action is being taken because pending legislation (H.R. 1773) would index maximum loan amounts to the limits for conventional loans in the secondary market.

    Recommendation: To increase opportunities for participation for all Native American, Native Hawaiian, and Pacific Islander veterans, the Secretary of Veterans Affairs should explore partnerships with local housing organizations, such as One-Stop Mortgage Centers, that assist and support Native Americans on trust lands with the mortgage lending process.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: Based on FY 2005 training and outreach contacts, VA has been exploring partnerships with local housing-related organizations.

    Recommendation: To increase opportunities for participation for all Native American, Native Hawaiian, and Pacific Islander veterans, the Secretary of Veterans Affairs should assess program outreach efforts to Native American, Native Hawaiian, and Pacific Islander veterans and report on this assessment to Congress, as the program's authorizing legislation directs.

    Agency Affected: Department of Veterans Affairs

    Status: Closed - Implemented

    Comments: On March 15, 2006 VA reported to Congress on the status of the Native American Veterans Housing Loan Program. This report included a section on program outreach that (1) detailed outreach activities,(2) reported four new Memorandum of Understanding with tribes entered into during FY 2005 (for a total or 74), and (3) discussed obstacles to program utilization. The report also included a section on eligible participants that reported the latest avaiable data from the 2000 census. While the program faces many obstacles outside the contral of the VA including questions about trust land title and generally low income among eligible native american veterans VA's action reasonably implements our recommendation that VA assess outreach and report to Congress as required by the program's authorizing legislation.

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