When we create a new web application using a custom host header. There is an issue which prompts for username password repeatedly when trying to access it from the SharePoint server.

Method 1: Specify host names (Preferred method if NTLM authentication is desired)

To specify the host names that are mapped to the loopback address and can connect to Web sites on your computer, follow these steps:
Set the
DisableStrictNameChecking
registry entry to 1. For more information about how to do this, click the following article number to view the article in the Microsoft Knowledge Base:
281308 Connecting to SMB share on a Windows 2000-based computer or a Windows Server 2003-based computer may not work with an alias name
Click Start, click Run, type regedit, and then click OK.
In Registry Editor, locate and then click the following registry key:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa\MSV1_0
Right-click MSV1_0, point to New, and then click Multi-String Value.
Type BackConnectionHostNames, and then press ENTER.
Right-click BackConnectionHostNames, and then click Modify.
In the Value data box, type the host name or the host names for the sites that are on the local computer, and then click OK.
Quit Registry Editor, and then restart the IISAdmin service.

Method 2: Disable the loopback check (less-recommended method)

The second method is to disable the loopback check by setting the DisableLoopbackCheck registry key.

To set the DisableLoopbackCheck registry key, follow these steps:
Set the
DisableStrictNameChecking
registry entry to 1. For more information about how to do this, click the following article number to view the article in the Microsoft Knowledge Base:
281308 Connecting to SMB share on a Windows 2000-based computer or a Windows Server 2003-based computer may not work with an alias name
Click Start, click Run, type regedit, and then click OK.
In Registry Editor, locate and then click the following registry key:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa
Right-click Lsa, point to New, and then click DWORD Value.
Type DisableLoopbackCheck, and then press ENTER.
Right-click DisableLoopbackCheck, and then click Modify.
In the Value data box, type 1, and then click OK.
Quit Registry Editor, and then restart your computer.