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TUESDAY, AUGUST 27, 2002

The federal government isn't doing enough to increase participation in a home ownership program for Native veterans, a new Congressional report charges.

But due to trust land problems, low incomes and lack of infrastructure on reservations in the continental U.S., the Department of Veterans Affairs (VA) can only do so much, the General Accounting Office (GAO) said on August 23. These obstacles have to be addressed elsewhere, according to Congressional investigators.

"Our review suggests that certain elements of the program may be barriers to participation for Native Americans," the report stated.

The Native American Veterans Direct Loan Program is designed to combat low home ownership among American Indians, Alaska Natives and Native Hawaiians. Fewer than a third of Native Americans own homes, according to federal statistics.

But American Indian veterans have received just 38 loans since 1992. Alaska Natives received no money because none applied, VA officials said.

Other veterans, however, have benefited from the program, which has been extended twice and is up for reauthorization in 2005. Four out of every five loans have gone to Native Hawaiians and Pacific Islanders, the report stated.

To obtain a loan, the VA has four key requirements. They are:

• honorable service in the military
• member of a federally-recognized tribe with a VA housing agreement; or Native Hawaiian
• sufficient credit / income
• holder of a "meaningful" interest in land

American Indian veterans faced difficulties meeting the last two requirements and were denied loans, the report stated. For example, income among Native Americans is the lowest in the nation, at $16,800 per year, based on the 1990 Census.

"VA officials said that while they make every effort to assist applicants in qualifying for a loan, insufficient income and unacceptable credit history are still major barriers to loan approval for Native Americans who are found not to be creditworthy," the report stated.

Fractionation, which has split up the individual Indian land base, also impedes ownership. Loans were denied because applicants lacked a "meaningful" interest, according to the report.

Congressional investigators did find that the VA hasn't been doing enough outreach in Indian Country. The GAO recommended the department engage in homebuyer counseling and education and partner with American Indian and Alaska Native organizations.

Also recommended was an increase in the home loan limit to better reflect market costs. Currently, the cap is $80,000, an amount the GAO said should be extended if necessary.

Finally, the GAO said the VA failed to evaluate and report on its efforts as required by law. "[B]y not assessing its outreach efforts, VA cannot be certain that it is effectively reaching the population that the program was designed to serve," the report said.

In a response, Secretary for Veterans Affairs Anthony Principi said he supported the GAO's findings. "VA agrees it can do more in delivering its benefits, and concurs with your recommendations," Principi wrote on July 12.

But he said the program has succeeded. He cited statistics which showed that 64 percent of Native veterans own homes, more than twice the rate of the general Native population.

The VA has made $26 million in loans through February 2002, according to the GAO. Each year, $500,000 is provided for outreach.

Get the Report:
Native American Housing: VA Could Address Some Barriers to Participation in Direct Loan Program (GAO-02-654 August 23)

Relevant Links:
Department of Veterans Affairs - http://www.va.gov

Related Stories:
Principi salutes Native veterans (2/23)