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 | 1. 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 October 2023, VA updated their policy to require an annual review of NADL program operations and outreach. According to VA officials, the review will include consideration of the NADL staffing structure, the status of key activities, and the implementation of key changes. VA intends to use the results to identify actions to correct inefficiencies and improve processes. VA officials told us that the results of the initial review were scheduled to be released in September 2024. We will continue to monitor VA's efforts to implement this recommendation.
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| Department of Veterans Affairs | 2. 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 | 3. 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 October 2023, VA officials told us that they had begun to collect and operationalize feedback from Native American veterans and NADL-eligible entities collected at outreach events held in 2022 and 2023. Based on this feedback, VA made changes to its outreach event approach, including tailoring the content to consider whether the NADL-eligible entity had an existing MOU. In addition, VA officials told us that they have partnered with other knowledgeable groups. We are reviewing details of these partnerships and will continue to monitor VA's efforts to address this recommendation.
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| Department of Veterans Affairs | 4. 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 October 2023, VA officials told us that they had implemented individual performance standards for additional management staff with responsibility for the NADL program. We will continue to monitor VA's efforts, including activities to establish program performance goals and measures (as compared to individual performance standards), to address this recommendation.
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| Department of Veterans Affairs | 5. 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 October 2023, VA officials told us they had revised their annual Strategic Oversight and Analysis review plan to include a review of NADL activities, including NADL program documents. According to VA officials, the results of their review will be available in 2024. We will continue to monitor VA's efforts to address this recommendation.
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| Department of Veterans Affairs | 6. 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 | 7. 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) |
As of February 2024, VA officials told us they faced legal and logistical challenges to implementing NADL in Alaska, particularly with respect to land owned by Alaska Native regional and village corporations. VA told us they are working with Congress on pending legislation to address these issues. We will continue to monitor VA's efforts to address this recommendation.
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| Department of Veterans Affairs | 8. 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 October 2023, VA officials told us that that VA's Loan Guaranty Service and Office of Tribal Government Relations were routinely meeting to discuss program participation, changes to the program, and NADL outreach and other activities. 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 such activities will occur routinely in the future, to address this recommendation.
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| Department of Veterans Affairs | 9. 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 October 2023, 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 | 10. 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 October 2023, VA officials told us that they were considering partnership models for NADL. We will continue to monitor VA's efforts to address this recommendation.
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