By Larry Dandridge
According to the VA webpage “VA Housing Assistance,” found at https://www.va.gov/housing-assistance/, VA housing assistance can help veterans, service members, and their surviving spouses buy a home or refinance a loan. The VA also offers benefits and services to help you build, improve, or keep your current home.
At the VA Housing Assistance webpage, veterans, service members, and their surviving spouses can find out how to:
- Get help if you are homeless or at risk of becoming homeless.
- Get VA home loan benefits.
- Get veterans housing assistance grants.
- Get other VA benefits and services, including Disability Compensation, Pension Benefits, Veterans Readiness and Employment Benefits, and VA life insurance.
The VA Housing Assistance webpage also provides information about:
- Appraisers and staff appraisal reviewers (SARs): VA fee appraisers determine a property’s reasonable or market value for VA home loan guaranty purposes. The VA webpage titled “VA Home Loans Appraisers/Staff Appraisal Reviewer” is at https://bit.ly/4ehgRrM.
- Lenders: Lenders are persons or entities (private sector or government) that originate, hold, service, fund, buy, sell, or otherwise transfer a loan guaranteed by the Department of Veterans Affairs. The VA webpage, titled “VA Home Loans Lenders Page,” is at https://bit.ly/4d3xfLn.
- Real estate professionals: Real estate professionals are a vital resource for educating Veterans and Active-duty Service members about VA home loans and connecting them to them. The VA webpage titled “Real Estate Professionals VA Home Loan Tool Kit” is at https://bit.ly/4d3mvMS.
- Servicers (Mortgage companies) of VA loans: See the VA webpage “Servicers of VA Loans” at https://bit.ly/3TqoeF7.
Veterans Home Loans are underutilized
Only about 14 percent of veterans nationally utilize VA home loans, and many veterans and their surviving spouses are unaware of the exceptional VA Housing Assistance, one of the most valuable VA benefits. Many veterans have not discovered that a VA home loan can provide 100 percent financing and require no down payment.
VA loans reduce risk, assure the best mortgage rates
It’s a lesser-known fact that the VA guarantees the lender (mortgage company/underwriter) 25 percent of the loan amount, significantly reducing the risk associated with lender loans to veterans. This assurance provides veterans with the best mortgage rates, which equals lower payments. They also benefit from the most favorable credit guidelines (credit score requirements, debt-to-income ratios, and down payment) and are not required to buy Private Mortgage Insurance (PMI).
Review past The Island News articles
In May of 2022, I wrote three well-received articles on VA Housing Assistance. Veterans, military members, and their families (including survivors) who are thinking about buying a home, refinancing a VA loan, or bankruptcy should review those articles and the VA webpages in those articles, which can be found in The Island News’ archives at https://www.yourislandnews.com under “military” and at:
- How to get VA Housing Assistance, some things you need to know (Article 1 of 3), May 11, 2022, https://bit.ly/3MXCwcc.
- How to get VA Housing Assistance, some things you need to know (Article 2 of 3), May 18, 2022, https://bit.ly/3Tmu7mR.
- How to get VA Housing Assistance, some things you need to know (Article 2 of 3), May 25, 2022, https://bit.ly/3ZfUMFL.
VA-backed veterans home loans
According to the VA webpage titled “VA-Backed Veterans Home Loans,” found at https://bit.ly/3fcQqKm, VA direct and VA-backed Veterans’ home loans can help veterans, service members, and their survivors buy, build, improve, or refinance a home. They still need the required credit and income for the loan amount they want to borrow. However, a veteran home loan may offer better terms than a traditional loan from a private bank, mortgage company, or credit union.
Recent important real estate industry changes
Veterans, military members, and their surviving spouses should read the VA News Story “What real estate industry changes mean for VA home loan borrowers,” dated August 29, 2024, by Tahmina Burks, at https://bit.ly/4gmG45E. The National Association of Realtors® (NAR) settled a class action lawsuit that resulted in changes to buyer broker fees in real estate transactions. The settlement took effect on August 17, 2024, and requires two significant changes to how buyers and sellers negotiate services from a buyer’s agent.
- When agents list homes on the Multiple Listing Service (MLS), they can no longer include the buyer’s agent’s compensation.
- Buyers must enter into a written agreement with realtors before touring a home, and the agreement must include terms about their (Buyer’s) own agent’s fee.
Veterans using VA home loan benefits can still negotiate and may pay for their real estate professional’s commission (i.e., the buyer-broker fee) beginning Aug. 10, 2024, subject to certain safeguards. The VA encourages veterans to seek out the services of mortgage lending and real estate professionals “who have experience with the VA home loan program.” Veterans need to read the entire VA News Story at https://bit.ly/4gmG45E to understand the full implications of these changes.
VA Home Loan Guaranty Buyer’s Guide
Veterans, military members, and survivors should download and read the “VA Home Loan Guaranty Buyer’s Guide: found at https://bit.ly/3B2o0hm.
The bottom line
The VA Home Loan is often the best home loan product for veterans. Some VA home loan benefits include:
- No down payment if the sales price is at or below the home’s appraised value (the value set for the home after an expert review of the property).
- No loan limit with full entitlement if you can afford the loan. VA will back loans in all areas of the country, regardless of home price.
- Competitive terms and interest rates from private banks, mortgage lenders, or credit unions.
- No need for private mortgage insurance (PMI) or mortgage insurance premiums (MIP). PMI is a type of insurance that protects the lender if the borrower is unable to pay the mortgage. It’s usually required on conventional loans if the down payment is less than 20% of the total mortgage amount. MIP is what the Federal Housing Administration (FHA) requires borrowers to pay to self-insure an FHA loan against future loss. Not having to pay PMI could save a borrower on their monthly mortgage payment.
- Fewer closing costs may be paid by the seller, lender, or any other party.
- No penalty fee for paying off the loan early.
- Access to VA loan staff who can answer questions by mail or phone at 1-877-827-3702. (Contact information is online at https://bit.ly/3IjV6ca).
Continued next week.
Larry Dandridge is a Vietnam War wounded warrior, disabled veteran, ex-Enlisted Infantryman, ex-Warrant Officer Pilot, and retired Lt. Colonel. He is a past Veterans Service Officer, a Patient Adviser at the RHJ VA Hospital, the Fisher House Charleston Good Will Ambassador, and the VP for Veteran Affairs for the local Army Association Chapter. Larry is the author of the award-winning book Blades of Thunder and a contributing free-lance writer with the Island News. Contact him at LDandridge@earthlink.net or 843-276-7164.
