Rate Change for VA’s Native American Direct Loan Program


In 1993, the Native American Direct Loan (NADL) was first made available to the Native Hawaiian Veteran community through the Veterans Administration (VA), providing a critical financial resource for home and land financing.

Recently, in March 2023, the Secretary of Veterans Affairs, the Hon. Denis R. McDonough, lowered the interest rates of the NADL from 6% to 2.5%, potentially saving thousands in home and land costs for Native Hawaiian beneficiaries.

Since the inception of the NADL program, more than 110 Memorandum of Understandings (MOUs) have been signed with Native Communities throughout the nation and Pacific, the Native Hawaiian Community (NHC) being one of them.

The NHC MOU exists between the Department of Hawaiian Homelands (DHHL) and the federal government. DHHL land inventory is classified as “Federal Trust Land” allowing for DHHL veteran beneficiaries on the lease document to utilize the NADL benefit only for DHHL lands. Unlike the stereotypical VA loan, there is no third-party loan vendor – the VA will directly finance this loan.

The NADL allows for direct loan opportunities from the VA for both financing and refinancing toward the purchase, construction, or improvement of a home. Veterans who are interested in qualifications should check with their local or state VA resources to ensure they meet eligibility and qualification standards for enrollment.

Veterans currently with an interest rate of 3.5% or higher will be able to refinance their current loan to take advantage of the lower interest rate of 2.5%. This rate adjustment is approved for the next 24 months.

Currently, DHHL has more than 10,000 active leases with more than 4,450 actively financed. The NADL program finances more than 180 mortgage loans, roughly 4%.

The Native Hawaiian veteran community has been and continues to be at the forefront of NADL home financing; of the existing 550+ NADL loans throughout the nation, Samoa and the Marshall Islands the NHC accounts for more than 30% – far more than any other group. With 40,000 beneficiaries on the wait list and limited opportunity for financial institution financing, for those who qualify the NADL provides an excellent opportunity for home financing.