Here’s a market share you don’t want to have. There are 14,000 American Indian veterans in New Mexico. The Department of Veterans Affairs NADL (Native American Direct Loan) closed one mortgage last year.
To be fair, Jeffrey Wilson, of DVA’s Phoenix Home Loan Center, traveled to the New Mexico Housing Summit in Albuquerque recently to promote additional use of the loan and explore what the barriers are to New Mexico (and other) Native vets using the program.
Native American vets are eligible for the DVA’s standard veterans mortgage as well. At least three of those were closed through Wells Fargo last year, and possibly more. Still not much of a market penetration.
The biggest difference between the two products is the standard mortgage involves a guarantee, and is extended by a private lender, such as Wells. The NADL is a direct loan by the DVA (and behind it, the federal government). A direct loan lets the DVA be more flexible than bank lending is.
Wilson cited credit and income issues as the biggest barrier to more Native vets using the program. American Indians at the session said the vets do not know how to access the program.
Both of these are solvable problems, Credit and homeownership counseling, plus training on how to use the program were suggested at the meeting. Marvin Ginn, who heads Native lender Native Community Finance, based at the Laguna Pueblo in New Mexico, suggested Native vets might be more comfortable with somebody local (like himself).
Native vets are also eligible for Department of Housing and Urban Development Section 184 loans, which are available throughout the state of New Mexico (and many other states or parts thereof). If they live on reservations, however, where conventional mortgage lending barely fogs a mirror, stepping up the market share of the NADL would be a good way to go.