The VA Home Loan Guaranty Program began in 1944 with the original Servicemen’s Readjustment Act which was passed by the United States Congress in efforts to offer a wide variety of benefits to eligible veterans in appreciation for serving in war.
Related: Top 10 Reasons to Get a VA Loan
Why is getting a VA loan so difficult today?
Getting a VA loan today is pretty much the same as it has been since 1944. The difficulty lies in getting an offer accepted when your loan of choice is VA.
The reason? VA non-allowable costs.
In order to make homeownership affordable for the veterans it serves, VA guidelines designate certain closing costs as “non-allowable”, meaning they cannot be paid by the veteran.
Related: How VA Loans Protect Veteran Home Buyers
The following fees are always not allowed to be paid by the veteran if the 1% origination fee is charged:
• Lender’s appraisal – the veteran can only be charged for 1 appraisal unless VA deemed a second appraisal mandatory
• Lender’s inspection – if it is not required on the appraisal/NOV, it can not be charged to the veteran
• Settlement fee, escrow fee, closing fee
• Document preparation fee
• Underwriting fee
• Processing fee
• Pest inspection fee
• Attorney fees if for something other than title work
• Assignment fee
• Copying fee
• E-mail fee
Related: Closing costs increasing for VA loans?
These fees, however have to be be paid by someone and in a normal real estate transaction that leaves the seller.
However in today’s market where the buyers far outnumber the sellers, that can be a sticking point in negotiations. Failure to reach an agreement could result in a rejection of your offer.
This is when you need a Lender and Realtor who specialize in helping veterans work out a solution that will be acceptable to ALL the parties to the transaction.
Related: 4 Steps to a Quicker Closing using a VA Loan
We have helped countless veterans and their families successfully navigate through these issues and get the home of their dreams with the VA loan they served so hard to earn. They all have one thing in common, they contacted us.
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