This article was published in the Daily Bulletin on Saturday, June 4th, 2011. By Tim Harrison
It is time to change the stereotype about Veteran Affairs home loans’ being problematic.
In general, I have strong opinions and this is a big one — I would love to help my community and the public at large to under-stand the merits of giving high priority to offers from veterans using the VA loan.
Too often, I have noticed that some real estate agents steer their sellers away from a VA home loan offer.
I feel this is both a missed opportunity, and potentially, an injustice to a worthy Vet!
Part of the unfortunate tendency to give lower consideration to a VA loan is the result of misunderstanding the VA loan itself.
Because the VA offer may not include a cash down payment, uninformed sellers and their agents consider the offer to be less desirable than an offer with a cash down payment.
The VA loan includes a low-or no-down payment option through our federal government, which has the ability to insure the loan. (VA loans are insured through the Department of Veterans Affairs.) Actually the loan is insured up to a 30-percent loss by our government for those veterans who are eligible.
Another issue can be an outdated idea about VA guidelines. Long ago, VA loan guidelines included much stricter policies on property condition.
For that matter, so did the Federal Housing Administration home loan pro-gram, although it seems real estate professionals are now aware that an FHA offer is one to consider, because the FHA guidelines on property are pretty much in sync with conventional offers.
Since the VA guidelines have been modified, there is very little reason to give lower consideration to an offer from a potential home buyer using a VA loan.
The only real difference is that a VA loan requires a termite report and clearance with both Sections 1 and 2 of the report cleared. Most homebuyers want the termite work done prior to closing the transaction anyway.
In reality most home loan programs these days have the same concern when it comes to property condition and that is that health and safety issues be addressed. The question is, does a condition exist that is potentially harmful to the new occupant or occupants? The VA loan, Fannie Mae, Freddie Mac, FHA or any other loan is in sync on this concern.
Our veterans are the people who fight or have fought for the amazing liberties that we benefit from every day — I believe these are the very people who are worthy of being given a more-than-fair consideration. This is a point I feel passionately about — veterans are the heroes in our communities. They are our neighbors, colleagues, friends, children, wives, husbands, mothers, brothers, sisters and fathers who have served through our armed forces to ensure the freedom that you and I enjoy today.
I feel certain that if most people selling a home understood this vital financing tool available to our veterans, sellers would insist on high consideration for offers that are made by the veterans.
Real estate professionals have a fiduciary duty to represent their sellers’ highest good. I understand that if an offer is made with a significant down payment as compared to a low to no down payment, regardless of loan type, that the real estate professional must represent the seller well by advising them that the higher down payment may be a safer offer to consider. I am just saying the VA loan is also a good loan and they close quite easily with lenders who have experience with closing a VA loan.
I become frustrated because of an idea about loan guidelines that are 15 years out of date, that veterans do not get the fair or even preferred treatment they deserve. When you think about this from a practical point of view, as long as the buyer making the offer will be able to complete the sale in a timely and professional manner, why shouldn’t top priority to vets be the industry standard?
There is one more aspect about this topic that I am particularly bothered about — I have witnessed VA loans given lower priority or no consideration at all when the property being sold is a bank-owned property. To be clear, not all banks practice this and I take my hat off (if I wore a hat) to Bank of America for being sellers of bank-owned properties that regularly consider and accept VA offers. However there are some banks that do not, and these are banks that the American people bailed out when they were in trouble. The fact that these institutions do not consider VA offers as a general rule is both insupportable and unconscionable.
I will stand firm in my opinion that all banks should make it clear to real estate agents they want to see all offers, including VA, because these buyers deserve consideration.
For my part I offer deeply felt thanks to each of you, especially to my stepfather, Ray Lyons, a proud Purple Heart recipient from his service in the Vietnam War and to my brother, Dr. Dan Harrison, who served in the United States Air Force. Also, to the families who are left at home holding thoughts of love, support and well being for their loved ones off at war, you have all my respect for staying strong and supportive. Truly, my heart and prayers go out to you all every day, thank you, as well. Tim Harrison is branch manager of the HLC Team at Broadview Mortgage in Upland