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Federal home loan program is still failing Native American veterans after 30 years

Henry Speelman, a former U.S. Marine and member of the Northern Cheyenne Tribal Council, has been renting a house on the reservation.
Quil Lawrence/NPR
Henry Speelman, a former U.S. Marine and member of the Northern Cheyenne Tribal Council, has been renting a house on the reservation.

LAME DEER, Mont. — The GI bill has near-mythic significance in American history — generations of veterans got an education and an easy home loan, the sort of thing that pulls families up into the middle class.

That benefit has never really been available, though, to one group of Americans who serve in the military in very high numbers — Native Americans living on tribal land. Which was the subject of a small gathering this summer at the Mennonite Church in Lame Deer, Mont.

Jeannie Beartusk, the veterans coordinator for the Northern Cheyenne Tribal government, set up snacks and refreshments for the vets in attendance, but that did nothing to change the fact that no bank will finance a GI bill home loan on tribal land.

"I tried to explain it as best as I could," she said, "You know, I can't bend the rules."

That's because the banks can't take back tribal land if the loan defaults. This isn't new — Congress tried to fix this problem 30 years ago. In 1992, the Native American Direct Loan (NADL) was created so the Department of Veterans Affairs can work directly with the tribes to finance a home loan.

"But the numbers are tiny," says Bill Shear with the federal Government Accountability Office.

Shear authored a recent report that found that in the continental United States, the VA has used this Direct Loan just 89 times in the past decade. Outreach by the VA gets to less than 1% of eligible Native vets, Shear says.

"This would be an example of ... how badly can a government program run," he says.

The GAO report found that the VA doesn't collect good data about the NADL's results, and uses manuals that are out of date and reference offices that don't exist anymore.

Another issue that hinders is that the VA can't legally make a loan until it has a Memorandum of Understanding (MOU) with each tribe. That takes action from from the tribes, but also outreach from the VA.

Bryant Lacey, who oversees the Native American Direct Loan program at the VA, says there are MOUs with only a fraction of the nearly 600 tribes in the United States.

"Right now we're only capable of hitting nearly 20% of these federally recognized tribes with the VA program. So we are really focused on ... engaging with tribes that do not have these memorandums of understanding with us," he said.

Lacey has read the critical GAO report, and he says the VA is already working on solutions including a new NADL team created in October, 2021. Lacey also confirmed that the Northern Cheyenne Tribe that Jeannie Beartusk works for is one of the few that already has an MOU to use the Direct Loan program.

That was news to the veterans who gathered at the Menonite Church in Lame Deer.

"Never did hear of a direct loan," said Henry Speelman, a former U.S. Marine and member of the Northern Cheyenne Tribal Council.

Speelman has a particular interest – he's been renting a house on the reservation, and he says the owner is willing to sell.

The house overlooks horses and cows grazing in a pasture and is framed by low hills and those other-worldly sandstone formations of Eastern Montana. Speelman could probably get a regular VA home loan — but only to buy a house off the reservation. He wants to stay here.

"It's our stronghold," he says. "We've been born and raised here, so it's just ... a sense of you feel safe here."

Deer visit the back yard almost every night, and occasionally a black bear. A few grandkids live with him, and one of them rides the quarter horses grazing out front.

"And as chaotic as it is, it's still home," he says. "It's just where I wanna be."

But he needs a loan.

Despite several government programs designed to make that happen, he can't seem to get one.

Copyright 2022 NPR. To see more, visit https://www.npr.org.

Quil Lawrence is a New York-based correspondent for NPR News, covering veterans' issues nationwide. He won a Robert F. Kennedy Award for his coverage of American veterans and a Gracie Award for coverage of female combat veterans. In 2019 Iraq and Afghanistan Veterans of America honored Quil with its IAVA Salutes Award for Leadership in Journalism.
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