Veterans Are Having a Hard Time Using Their VA Home Loans



Help could be on the way...

vet statsWashington State ranked as one of the top ten states with the most total active duty and reserve members of the military. According to the Northwest Multiple Listing Service, one in 10 homebuyers in Washington used a Veteran Affairs Department home loan to buy a house in 2017. In some counties, the ratio was much higher. For example, in Pierce County one in five homebuyers used a VA Home Loan. In Thurston County, one in four homebuyers used a VA Home Loan. 

The VA Home Loan Program is one of the ways our country keeps its promise to service members. However, because of red tape at the VA and public misperceptions, veterans often lose their bids to traditionally-financed offers. REALTORS® in Pierce and Kitsap Counties met with Representative Derek Kilmer to highlight the issue.

When he learned about the difficult time veteran-homebuyers across the Pacific Northwest were having, Rep. Kilmer, a member of the Appropriations Committee, wrote a provision that would start the reform process. It passed earlier this year, which could mean help is on the way. 

Why are veterans having a hard time using their home loans?

Kilmer: After World War II, Congress established the VA Home Loan program to make it easier to buy a house. Affordable loans are one of the benefits the men and women who served our country earned and deserved. 

Unfortunately, the process of actually using the loans can take a long time. There’s a lot of red tape, and the VA isn’t known for efficiency. I’ve been working comprehensively on that — not just for housing but to fix problems with the VA healthcare system too. 

When it comes to buying a home, the VA only accepts appraisals from VA-certified appraisers. In regions like ours, where there are a lot of veterans, VA-certified appraisers have more work than they can handle. The process is supposed to take 14 days. I’ve seen reports it is much longer. If sellers have multiple bids, they’re going to pick one that doesn’t require them to jump through government hoops or wait a long time for an appraisal.

The Tacoma News Tribune reported about this issue last year. Veterans in Tacoma said they lost multiple bids and gave up—they took out traditional loans from the bank. It cost them more to buy a house than it should have, and they didn’t get to use a benefit they earned and deserved.

So, with input from the Association of REALTORS®, I went to work on some fixes. I drafted language in the appropriations bill that requires the VA to figure out exactly what’s causing the delay, and to offer solutions that would help fix the problem. Congress passed it and that report is due early this summer.

Getting this report is the first step in seeing Congress make some fixes. And I think once a bill is introduced, it’ll likely move pretty quickly. Making sure veterans can buy a home is a bipartisan issue.

Can REALTORS® help? 

Rep. Derek KilmerKilmer: Yes! There are a few things:

First, if you’re representing a seller, there’s a misconception that a VA loan is somehow not as favorable as another form of financing. Some people think VA loans require sellers to shoulder extra fees at closing. A lot of that is urban legend. On the off chance a seller has to pay a higher escrow fee, or something similar, it often shakes out to about $100 or $200. 

That’s not nothing, but I don’t think it is a reason to reject a veteran’s application, or to take less money from a different bidder who has traditional financing. 

A lot of veterans who served in Iraq and Afghanistan are the age of first-time homebuyers. They’re starting new chapters in their life and putting roots down in our neck of the woods. REALTORS® throughout our region are doing amazing work ensuring that veterans can buy a home and realize the American Dream.   

Secondly, talk to your friends that do appraisals and ask them to register with the VA. It’s worth their while. With urging from Democrats and Republicans and teamwork from the Association of REALTORS®, the VA recently raised the amount they’ll pay for an appraisal.   

And lastly, REALTORS® are known for making a great case for their clients. When I get the report back from the VA later this summer, I’m going to write legislation on this. Help me advocate for veterans by talking to your federal lawmakers and asking them to sign on to the bill. Keep an eye out in the news in the next few months.

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