including a VA direct loan and three VA-backed loans.
VA Native American Direct Loan (NADL) program
A VA direct home loan is when The U.S. Department of Veterans Affairs serves as your mortgage lender. This is the only VA loan that does not involve a third party lender like a bank, credit union or private mortgage lender. With a VA direct loan, the VA loans the money directly to the veteran. The full and formal name of the program is the Native American Direct Loan (NADL) program, and it is only available to Native American veterans and their Native American spouses. It can only be used to buy, build, or improve a home on federal trust land or a reservation. These loans often have better terms than a home loan from a private lender and have all the benefits of VA-backed loans, like no- money-down, no PMI, no early pay-off penalties, low funding fees and waivers for qualified VA-related disabled veterans. They do require minimum service requirements, and borrowers must qualify and be able to afford the mortgage. Plus, the home must be used as the veteran’s primary residence.
VA-backed Home Loan
A VA-backed home loan means the U.S. Department of Veterans Affairs guarantees — or stands behind — a portion of the loan a veteran gets from a private lender. This means if the veteran defaults on the loan and the home goes into foreclosure, the lender will recover some or all of their losses. Since these loans are less risky for the lender, they are more likely to loan the money and give those borrowers more favorable terms. Lenders follow VA guidelines when making VA-backed home loans, but may also require borrowers to meet additional standards like having a high enough credit score or getting an updated home appraisal.
There are three types of VA-backed home loans available to
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