VA Home Loans Rejected by Growing Numbers of Realtors

To give back to the men and women who selflessly served the United States in our Armed Forces, the government created the VA loan program in 1944, which is a mortgage loan guaranteed by the U.S. Department of Veterans Affairs (VA) to offer long-term financing to eligible American veterans.

However, there have been some bumps in the road over the years for vets who have tried to utilize the VA loan program; most come in the form of realtors and banks who are leery to embrace it for a variety of reasons, many of them seen as unfair by Militarytimes.com.

“Real estate markets in some areas have rebounded from the mortgage crisis, and houses are being snapped up quickly. And because of some real or perceived problems with VA loans, some sellers just don’t want to be bothered,” they said. “The reluctance to accept a VA loan may relate to a perception that they take longer to process; but in reality VA loans are closing faster than others.”

Nonetheless, this non-issue is causing many realtors to reject VA loans simply because they want their commissions faster; in addition, Militarytimes.com said, another misconception is that Minimum Property Requirements (MPR) as related to the condition of a prospective home are more stringent.

“Sellers are concerned that VA appraisers are more picky... that there will be repairs required,” they said. “But it’s hit or miss with all appraisals, including those for conventional loans. If there are problems with appraisals, the buyer’s real estate agent can contact VA officials.”

These misconceptions are simply the tip of the iceberg; many realtors view the use of VA loans as a long and difficult process, which is simply not the case, according to an article by the Huffington Post.

“VA-backed mortgages actually have a lower failure rate than subprime, FHA-insured, or even prime loans; only about four percent of VA loans default, compared to 29, seven, and five percent for the other loans, respectively,” they said. “Vets say they feel they’re being discriminated against, that it’s not fair.”

These situations are surprising, as reports have confirmed that an increase in home purchases are in part to the fact that vets are using the VA loan program in 20-year high numbers.

In order to increase chances of getting your offer accepted with a VA loan, we reached out to our own expert for advice that prospective shoppers can use.

· Get eligibility out of the way first. In addition to basic requirements, the VA requires that borrowers have suitable credit, sufficient income, and a valid Certificate of Eligibility. You can reach a Loan specialist by calling 888-664-9572.

· Have a pre-approval letter ahead of time. Sellers may be weary of the time it takes for veterans to be approved for their VA loan; to eliminate this possibility, have your pre-approval letter in place ahead of time.

· Prequalification vs Prequalification; know the differences. Prequalified means that your situation typically meets the basic eligibility requirements, but that additional screening is necessary. Having your VA pre-approval letter means you have already gone through this addition screening.

· Don’t pick a home in poor condition. The VA has strict guidelines on the processes that approved VA appraisers must follow as well as restrictions on their fees. To avoid unnecessary time and expense, avoid homes in need of repair.

Ensuring that buyers, sellers, and agents are all educated in the realities of the VA loan program will ensure that many of the unfair stigmas that are associated with it will be removed once and for all, opening the door to home ownership for many vets and their families.

In addition to these tips, both Nassau and Suffolk County have agencies where veterans can ask questions and get information on benefits.

· http://www.nassaucountyny.gov/Agencies/Veterans/

· http://www.suffolkcountyny.gov/veterans/Home.aspx