NORTH CAROLINA, USA — Buying a house is not easy, especially in a competitive market but misconceptions about the VA loan program are creating challenges for servicemembers on their path to homeownership.
VA loans come with little to no down payment, lower interest rates, and make homeownership within reach for veterans. However, a loan expert said veterans are struggling to buy homes and he is seeing one offer after another get rejected.
“In today's market, it's very difficult for anybody to get a home under contract. But it's especially difficult for the veterans, there are being told a lot of times by the wrong people, that the sellers are being told not to accept offers that are backed by a VA loan or an FHA loan,” said Scott Hastings, Loan Officer, HomeBridge Financial Services.
Hastings has been in the industry for 20 years helping people like U.S. Air Force Veteran Andre Lima and his family who are back on the hunt to find their dream home.
“It's the next step in life to actually create, you know, our place for our family to come together and spend time together,” said Lima. “Whether it be hanging out in the backyard or you meals, whatever it is, it's going to be our place and it's going to be something that we can make our own. So it's really important to us”.
They are hoping to take advantage of the VA loan program.
“This benefit allows veterans to get a hold of a house without having the upfront cash,” said Lima.
But they are skeptical about the challenges that may come with using the loan.
“VA loan is going to take a little bit longer and require a little more footwork on the sellers part…and might not look so hot compared to cash offer or conventional loans,” he said.
One of the many misunderstandings Hastings said is keeping service members from using their hard-earned benefits and having some sellers overlook their offers.
“They think that sellers will be burdened with additional cost, which is not true,” said Scott Hastings. “The new VA loan does not have cost to the sellers. They also think that the appraisers will be unduly harsh on the properties, which also is not true.”
In a new report – the Navy Federal Credit Union found that many veterans are confused about using the loan. Their data noted that nearly 60% of active duty and about 40% of veterans think the VA loan will take longer to process and delay the home buying process.
Hastings said that is not the case and it’s not the only battle vets face. They are struggling to compete.
“They just get beat out by people with conventional financing, and especially people that are offering way over the purchase price,” explained Hastings.
His message to sellers; think twice before putting offers with VA loans at the bottom of your stack. He adds the program helps those who have served this country realize the dream of buying a home.
Meanwhile, Lima and his family remain hopeful.
“Now that our budgets a little bit higher, we're looking at some homes a little more finished. I feel optimistic,” said Lima.
Hasting recommends that veterans work with experienced real estates agent with years of experience to help navigate the process. He also urges veterans and those in the housing industry to learn more about the program and its benefits.
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