VA Loan Improvements Await Returning Troops


VA Loan
President Obama's imminent announcement of a troop withdrawal tonight calls to mind another issue: Thousands of soldiers will soon return home intent on buying houses. But are real estate agents prepared for the influx of veteran homebuyers and their special mortgage needs?
Veterans Affairs loans are mortgage loans guaranteed by the U.S. government that grant qualified veterans special privileges not afforded to civilian homebuyers . A lucky few service members who use the loan can even get their hands on the holy grail of mortgages, known in real estate parlance as a "VA No-No" -- no down payment and no closing costs.

Sound too good to be true? Well, it sort of was, seeing as real estate agents traditionally steered sellers clear of closing with VA-financed buyers. To begin with, brokers held the view that low- or no-down buyers are more likely to walk away from deals than higher-down buyers. VA loans also have stipulated much stricter property condition requirements than your average housing loan. What might have bothered agents the most, however, was that VA loans involved a slow-moving approval process, sometimes taking months longer than average.

But modifications to the loan's terms, along with thousands of veterans heading home, should prompt real estate agents to revisit these views, argues Tim Harrison, the "straight-up mortgage guy" and author of the Broadview Mortgage Blog.

"We shouldn't be afraid of them," he says.

For one, Realtors no longer have to put up with the long waiting periods associated with the loans because qualified underwriters can now approve them, not just the Department of Veterans Affairs.

Meanwhile, the strict property conditions of the loans have been loosened to the extent that they are now comparable to those associated with your typical housing loan.

And while real estate agents must still live with little or no down payment, they shouldn't wring their hands over it. In reality, Harrison says, closing deals with VA-financed buyers is no more difficult than closing with buyers who make more substantial down payments.

The loan now carries with it only mild inconveniences, he says. VAs must still be appraised by a special VA loan appraiser, who "might take a day or two longer" to book, and the loans require termite clearance, not necessary for some other loans.

See Harrison make his case below:



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