BUYER WANTS TO USE VA ELIGIBILITY.

I got another call yesterday from a prospective home buyer who has been unable to find an agent who will write a contract for them using their VA eligibility.  WHAT IS GOING ON???

I understood when agents advised their seller clients to reject a VA financed contract when homes sold for 5% over the list price for the past 4 years UP UNTIL LAST AUGUST.  Are these agents living under a rock somewhere??  Don't they know that the market (spelled w-o-r-m) has turned?? 

THERE ARE 27,000,000 VETERANS ELIGIBLE FOR VA LOANS
That is a tremendous resource for sellers in this slow market.  The home the buyer wanted to see was priced at $327,000.  His VA loan makes him eligible for a NO DOWN PAYMENT loan with NO INTEREST RATE PENALTY.  Or, there shouldn't be.  I have seen rate sheets with a 1/4% higher interest rate for VA loans.  UGH! ! This buyer had been advised by three different agents that his interest rate would be higher if he used his VA eligibility.  WHAT IS GOING ON???   The home this buyer is interested in has been on the market for 13 months.  The price has already been lowered more than enough to pay a VA buyer's closing cost. 

I'd like to hear from some lenders why they would charge more for a VA loan than a conventional or FHA loan.   I've run into that in my market and the solution is to simply go to another lender.  The buyer is already charged the funding fee which GUARANTEES THAT THE LENDER CAN'T LOSE MONEY IN CASE OF DEFAULT.  Seems to me that the VA loan is more secure for a lender than an FHA loan which with the forbearance provided by FHA, makes it difficult to foreclose those loans too.

O.K.  I know that the VA appraisal can be tough when they order repairs.  That appraisal is conditioned on repairs made.  Seems to me that the solution to that problem is to make repairs BEFORE the home goes on the market.  If the seller is going to sell a home with chipping and peeling lead based paint, steps with no railing, loose and shaky banisters on the porch, a furnace with a cracked heat exchanger, etc., the home should be discounted for condition and sold to an investor.  Don't want to discount???  Fine, then make the repairs. 

THE G.I. BILL WAS IMPORTANT IN MAKING THIS A GREAT NATION AFTER A WORLD WAR
IMO, the GI Bill was the best social changing legislation ever enacted by Congress.  In 1944, with 16 million service personnel returning from WAR, Congress, in one of it's finest moments, said, "The country needs to lend a helping hand to get these fighting men and women back on their feet so they can contribute to our economy and take care of themselves and their families."  So, the G.I. Bill gave returning vets housing loan benefits, education benefits that brought economic surge in housing and helped millions of service personnel get the education needed to compete for good jobs.  WHAT HAPPENED??  Where is our gratitude for today's military???  There is something seriously misguided when the most powerful country in the history of the world takes the service of our volunteer military personnel for granted and then selfishly, denies them the right to use the benefits they earned by PUTTING THEIR LIFE ON THE LINE FOR US.  But, we have real estate practitioners denying them the opportunity to use the benefits they earned.

So, I'm outraged.  Will we help this VA buyer??  You bet your boots we will.  I've had him qualified by a trusted lender who does the best job for VA buyers that I've ever known.  He eliminates the lender's fees for my VA buyers, a saving of about $400 for this lender, more with other lenders.  I've never had an appraisal problem with this lender.  The homes in the buyer's price range are not too old and shouldn't need much if anything in the way of repairs.  WHAT ABOUT the closing costs??  Sure, it's high in Maryland.  However, homes are sitting for 6-8-10 months and the prices are creeping down slowly MORE than the closing costs for a VA buyer would be.  So, the seller isn't losing a thin dime by selling to this VA buyer.  The anti-military bias is insidious.  While I don't have any interest in engaging in that debate, it is clearly discriminatory for a real estate licensee to refuse to assist a VA eligible home buyer with his VA loan.  Unfortunately, VA buyers are not a protected class. 

I guess what outrages me more is the knowledge that real estate agents and brokers are cooperating in efforts to steer VA buyers away from perfectly good loans to lenders and loans that will cost the buyer more.  No matter how you run the numbers, with no down payment, closing costs paid, an assumable loan,  the VA loan is a good deal for an eligible home buyer.  There is also the security of the VA help if the buyer gets into financial difficulty and has to sell.  The VA has a "compromise" program whereby the VA will not only lend the VA borrower funds to close the loan but they will also pay real estate commissions.  The VA compromise loan can mean the difference between a VA owner selling their home and coming out whole or foreclosure.  Tell me a conventional or FHA loan that will do THAT for a defaulting home owner. 

LOOK AT THE BUYING POOL. There are approx. 15,900 military personnel in St. Mary's County, MD; 8,000 at Ft. Meade.  That is just two bases in the Washington Metro area.  What about the personnel at the Pentagon, Quantico, Andrews AFB and more, more. 

So, we'll help this VA buyer find a home, get it financed and get him to closing.  For Homefinders.com agents, it's all in a day's work.  Agents and brokers in Maryland and Northern Virginia who do not want to sell to a home buyer who wishes to use his VA benefits, SEND THEM TO ME.

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