"33.6% indicated they did not know about the program"
"62.8% (older veterans) said their lender never discussed the VA loan option with them."
"31.8% said a conventional and/or FHA mortgage was easier to obtain or less expensive."
"8.1% said their lender and/or REALTOR discouraged the use of the VA loan."
I learned of these number last week in a continuing education class sponsored by the Maryland Association of REALTORS® and VAREP (the Veterans Association of Real Estate Professionals), and was shocked - especially about quote #4.
A VA Home Loan (which is a guarantee not an actual loan made by the VA) is a fantastic benefit that is earned, and - obviously - underutilized. According to the infographic below, published by the U.S. Department of Veterans Affairs, approx 620,000 VA home loans were guaranteed in 2013. Fast forward 5 years and the numbers are not much higher, 610,512 for FY 18.
14,685 were made in the State of Maryland, 8,822 were purchase loans.
Having spent 14 years in the supporting role of active duty military spouse, and more than 15 now as a military-friendly REALTOR® serving the WRNMMC and Fort Meade military communities, I get the unique challenges military families - active duty & veterans - face, I've experienced a few first hand.
I have proudly supported my military community, I have successfully navigated the VA loan home process with many, have advocated for this benefit and worked to dispel the myths surrounding it. Given the above quotes and numbers, I clearly need to do more - we all do!
What are some of the misconceptions when it comes to VA Home Loans?
- VA loans are harder to obtain: many of the qualifying criteria are the same (e.g. satisfactory credit risk, stable and sufficient income, primary occupancy), on average the time it takes from contract to settlement is just 2 days longer.
- The appraisals are tough: the MPRs (minimum property requirements) are pretty much the same as for FHA loans. The purpose is to determine that the home is safe, structurally sound and sanitary - just like any other purchase or refi loan.
- There's too much paperwork involved: be prepared to have to submit everything but your death certificate to your lender - no matter if conventional, FHA, rural, or VA. That's just the way it is.
What are some of the benefits of VA guaranteed loans?
- 100% financing, no down payment requirement
- ability to finance the funding fee (if not waived)
- no mortgage insurance premium
- no prepayment penalties
And then there is the Tidewater Initiative which can be very beneficial to both, buyers and sellers, in case of low appraisals! It's a stop-gap and huge plus of a VA loan - it gives REALTORS® and lenders time to justify the sales/contract price and provide market & property evidence for the appraiser's consideration before the final value is established.
The benefits of a VA Home Loan are many. If you are in the process of PCS'ing to Maryland, or considering trading up to a more permanent home, or thinking about refinancing, I certainly hope that you'll at least think about taking advantage of it and connect with an experienced VA lender as well as REALTOR® to explore your options.
As a military-friendly REALTOR® I have served the WRNMMC and Fort Meade communities since 2004. I would be honored to help you administer your VA home loan benefit in Maryland. You have earned it.
I deeply respect your unwavering commitment to serve our country, and for taking that lifelong oath so selflessly. As a token of my appreciation, and throughout 2020, I will offer a rebate and a donation in your name to the Gary Sinise foundation at time of settlement. Thank you!