Native American Veterans: Improvements to VA Management Could Help Increase Mortgage Loan Program Participation
Fast Facts
The Department of Veterans Affairs has made few loans under the Native American Direct Loan program, which provides loans to eligible Native American veterans for buying, building, or fixing up homes on certain types of land.
VA is working to improve the program, such as by dedicating staff to work full-time on it. But VA hasn't collected certain useful information related to program outreach or loan processing. For example, VA doesn't collect data on whether outreach efforts or materials reached eligible veterans or led them to apply for loans.
We recommended that VA address this and other issues.
Highlights
What GAO Found
The Department of Veterans Affairs (VA) has made relatively few loans under its Native American Direct Loan (NADL) program. This program provides loans to eligible Native American veterans to purchase, construct, or improve homes on certain types of land. Specifically:
In fiscal years 2012–2021, NADL originated 89 loans to veterans in the contiguous United States, 91 loans in Hawaii, and none in Alaska. This represents loans to less than 1 percent of the estimated potentially eligible population of 64,000–70,000 veterans in these areas.
During this period, VA also originated 76 loans in American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam—serving approximately 1.5 percent of the potentially eligible population of 5,200 veterans in these U.S. Pacific territories.
Veterans living in the contiguous United States make up the majority of the potentially eligible population. However, less than one-third of federally recognized Indian tribes there have agreements with VA to allow their members to apply for NADL loans.
In October 2021, VA reorganized NADL operations and formed a NADL-dedicated team to strengthen the program. However, GAO identified weaknesses with the NADL program and opportunities for VA to improve management and operations, including in the following areas:
Data collection and performance measurement. VA does not collect certain useful data related to NADL outreach, loan processing, and negotiation of program participation agreements with federally recognized Indian tribes. It also does not have performance measures for all of its key activities, including loan processing, or for their outcomes. More comprehensive data collection and performance measurement would provide management information for more informed decision-making.
Planning. VA does not have an overall outreach plan for NADL and has not integrated leading outreach practices, such as tailoring activities to populations, to inform its approach. VA also has not developed an operating plan for making NADL loans on the vast majority of NADL-eligible land in Alaska. Such plans would help ensure VA's activities are informed by best practices and appropriate to the local environment.
Leveraging expertise. VA faces barriers to NADL implementation, such as lack of borrower readiness for loans and title issues related to mortgage lending on NADL-eligible lands. NADL has addressed these barriers to a limited degree. However, it has not leveraged the knowledge of or routinely collaborated with other VA offices, federal agencies, or local organizations with applicable experience. Collaborating with these entities would increase the program's ability to serve veterans.
Why GAO Did This Study
In 1992, Congress required VA to establish a direct loan program to help Native American veterans finance homes on certain types of land that can be difficult to use as collateral for conventional mortgage loans. This could include, for example, land held in trust for Native Americans by the federal government. Members of Congress, advocacy organizations, and other stakeholders have raised questions about the effectiveness of VA's administration of NADL and outreach efforts.
GAO was asked to review the NADL program. This report examines the extent of lending to eligible veterans and program management and operations. GAO reviewed relevant laws and regulations; VA documents and data on NADL organization and activities; and estimates of potentially eligible veterans. GAO also interviewed VA officials and representatives of seven associations and 28 local organizations. GAO selected them for geographic diversity and applicable mortgage lending experience. They include tribal housing authorities, financial institutions, and tribal veterans service organizations.
Recommendations
GAO is making 10 recommendations to VA, including on data collection, performance measurement, planning, and leveraging expertise to mitigate barriers to NADL use. VA concurred with all of GAO's recommendations. For four, VA described actions it considered fully implemented them. GAO maintains that VA needs to take additional actions to fully implement those recommendations, as discussed in the report.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Veterans Affairs | The Director of the Loan Guaranty Service should develop a plan for implementation of NADL activities under the new staffing structure, to include staff priorities, resource needs, time frames, and assessment of the changes made. (Recommendation 1) |
As of April 2024, VA conducted a systematic review of NADL activities. Although this review did not assess the start of the new staffing structure due to time elapsed, it addressed the intent of the recommendation to evaluate and manage staffing resources. This review addressed NADL's staffing levels, changes and scope of staffing workload, staff management, utilization, attrition, and training needs. It also described significant future trends affecting NADL and made three recommendations to improve the program. According to its policy updated in January 2023, VA will conduct annual reviews of NADL activities in the future. This policy states that annual reviews of staffing levels and methodology, employee training needs, workload management, equipment needs, policy guidance/clarification needs, and barriers to efficient/effective operations of Loan Guaranty Service will also occur.
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| Department of Veterans Affairs | The Director of the Loan Guaranty Service should comprehensively assess its needs for collecting and using data to monitor and oversee NADL outreach and MOU negotiation. (Recommendation 2) |
As of October 2023, VA had collected additional data on outreach activities and MOU negotiations and demonstrated a consideration of needs in what they decided to collect. They assessed and used these data to monitor changes in the number of NADL applications submitted. According to VA officials, these data have been and will be incorporated into annual risk assessments and used to make adjustments to NADL outreach and MOU negotiation based on the results. In addition, VA has mapped the MOU review process and established a mechanism to track the status of MOU negotiations.
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| Department of Veterans Affairs | The Director of the Loan Guaranty Service should develop and implement mechanisms, such as surveys or focus groups, to collect feedback from Native American veterans, NADL-eligible entities, and other knowledgeable groups on NADL activities and identify any opportunities for improvement. (Recommendation 3) |
As of January 2025, VA officials told us that they had developed a mechanism to collect feedback on their outreach activities from Native American veterans and NADL-eligible entities during outreach events. Based on this feedback, VA had made changes to its approach to outreach events, including tailoring the content to consider whether the NADL-eligible entity had an existing MOU. However, VA has not yet developed mechanisms to collect feedback on NADL MOU negotiation and loan processing activities. VA officials told us that the Loan Guaranty Service was working with the VA office responsible for measuring customer experience to explore techniques to collect and analyze feedback from NADL participants and stakeholders. They have also discussed opportunities to gather feedback from Native American veterans during their quarterly meetings with the Office of Tribal Government Relations. We will continue to monitor VA's efforts to address this recommendation.
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| Department of Veterans Affairs | The Director of the Loan Guaranty Service should develop and implement program performance goals and measures for NADL outreach, MOU negotiation, and lending activities. (Recommendation 4) |
As of January 2025, VA officials told us they were using five program performance measures to assess outreach, MOU negotiation, and lending activities. These included a 2024 update to their annual outreach goal to increase the frequency of contact with federally recognized tribes and other housing entities. However, VA's measures of program outreach and MOU negotiation do not assess the outcomes of its activities--such as the number responses received--and two of the five performance measures lack clear and measurable targets against which to monitor and assess performance. We will continue to monitor VA's efforts to address this recommendation.
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| Department of Veterans Affairs | The Director of the Loan Guaranty Service should develop and implement processes to routinely and consistently review NADL program documents (including MOUs and policies and procedures) to help ensure they are current, complete, and accurate, and also identify parties to help conduct the reviews, such as VA's Office of General Counsel. (Recommendation 5) |
As of January 2025, VA conducted a review of NADL activities that described its legal documents and MOUs. As part of the review, VA identified VA's Loan Guaranty National Practice Group (part of the Office of General Counsel) to conduct periodic document reviews. However, VA has not provided support that the periodic reviews have occurred, or that these reviews include helping to ensure that previously issued NADL program documents are current, complete, or accurate. We will continue to monitor VA's efforts to address this recommendation.
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| Department of Veterans Affairs | The Director of the Loan Guaranty Service should develop a NADL outreach plan based on sound planning practices. (Recommendation 6) |
As of October 2023, VA had taken steps to gather and analyze information to inform its outreach efforts. Those steps can be viewed as consistent with practices that might be taken in response to an outreach plan that reflects sound planning practices. For example, by using data to analyze its outreach audience and leveraging knowledge of groups familiar with their target audience, VA identified potential outreach events that NADL staff might attend during the year. Specifically, VA analyzed data from (1) Census' My Tribal Area Tool and VBA's interactive benefit map; (2) outcomes from successful outreach events that resulted in program applications; and (3) tribes with HUD MOUs to prioritize a list of tribes for additional outreach in FY 2024. As part of their planning, VA also revised its outreach materials, including developing NADL fact sheets tailored to the specific characteristics of the regions served by NADL.
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| Department of Veterans Affairs | The Director of the Loan Guaranty Service should develop a plan for conducting NADL outreach, MOU negotiation, and lending activities in Alaska, including how to assist eligible veterans with interests in land owned by Alaska Native regional and village corporations or, if eligible, Alaska Native allotments and townsites. (Recommendation 7) |
In January 2025 Congress passed the Senator Elizabeth Dole 21st Century Veterans Healthcare and Benefits Improvement Act which included changes to NADL in Alaska. Among other changes, the act broadened the definition of eligible land and made changes to NADL MOU requirements that VA officials told us will affect NADL implementation in Alaska. As of March 2025, VA was working on a plan to implement these program changes, according to VA officials. We will continue to monitor VA's efforts to address this recommendation.
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| Department of Veterans Affairs | The Director of the Loan Guaranty Service should develop and implement a mechanism for NADL staff to routinely consult on outreach, MOU negotiation, and lending activities with staff from other VA offices serving Native American veterans. (Recommendation 8) |
As of January 2025, VA provided documentation of its policy updated in 2023 requiring NADL staff to coordinate their outreach efforts with other VA offices serving Native American veterans which include the Office of Tribal Government Relations, the Veteran's Health Administration's Office of Rural Health, and the Center for Minority Veterans. VA staff provided documentation that VA's Loan Guaranty Service and Office of Tribal Government Relations have been routinely meeting since 2022 and have discussions that included NADL program participation, outreach, challenges, lending activities, and MOU negotiations. In addition, Loan Guaranty Service staff has been working with staff with VA's Veterans Health Administration to improve outreach and identify areas for improvement. We will continue to monitor VA's efforts, including specific efforts to develop a mechanism to help ensure consultation on MOU negotiation and lending activities will occur routinely in the future, to address this recommendation.
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| Department of Veterans Affairs | The Director of the Loan Guaranty Service should develop policies and procedures for staff to determine whether eligible entities without a NADL MOU previously received approvals from other federal agencies to participate in their mortgage programs and use such information to inform its approach to outreach. (Recommendation 9) |
As of January 2025, VA had taken steps to target NADL outreach to eligible entities using existing approvals from other federal agencies. We will continue to monitor VA's efforts, including the development of relevant policies and procedures, to address this recommendation.
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| Department of Veterans Affairs | The Director of the Loan Guaranty Service should partner with organizations in Alaska and the contiguous United States to conduct NADL outreach or assist with program activities and assess which partnership models are most effective. (Recommendation 10) |
As of January 2025, VA had not systematically partnered with organizations involved in mortgage lending or assessed potential partnership models that might be effective for conducting NADL-related activities. The January 2025 Senator Elizabeth Dole 21st Century Veterans Healthcare and Benefits Improvement Act included changes to NADL, including the requirement for VA to partner with local service providers to conduct outreach and assist veterans to qualify for NADL loans. It also established a temporary program for VA to lend funds to Native Community Development Financial Institutions for NADL loans. As of March 2025, VA officials told us VA was working on a plan to implement these program changes. We will continue to monitor VA's efforts to address this recommendation.
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