VA lowers home loan interest rates for Native American veterans

March 22 (UPI) -- The Department of Veterans Affairs announced Wednesday it has lowered the interest rate for VA Native American Direct Loans to make housing more affordable for Native American veterans.

The VA, which provides direct loans to Native American veterans, dropped its interest rate from 6% to 2.5%, effective March 13. The new rate will be available for the next two years.

"Native American veterans are now able to more affordably buy, build and improve homes on trust land," said executive director of VA Loan Guaranty Service John Bell III.

The lower interest loans do not require down payments, have limited closing costs and no monthly mortgage insurance costs.

Mortgage rates have steadily climbed over the past few months as the Federal Reserve continues to raise the federal funds rate in an effort to curb decades-high inflation. Federal Reserve Chairman Jerome Powell announced the latest quarter percentage point hike Wednesday, bumping the rate from 4.75% to 5%.

While the VA provides VA-backed loans to help all eligible veterans obtain housing, the department is required by law to provide direct loans to Native American veterans or to veterans who marry Native American non-veterans.

Veterans who currently have an NADL loan with an interest rate of 3.5% or higher will be allowed to refinance at the lower rate.

"We at VA are laser-focused on serving Native American veterans as well as they've served our country, and that's what this decreased interest rate is all about," Bell said.