Although the Department of Veterans Affairs has backed a record 1.44 million home loans for veterans and military over the past year, members of Congress and veterans’ advocates said Wednesday that sellers remained wary of VA-backed loans.
Misinformation about VA appraisals, which many sellers find more complicated than others because homes must meet a series of minimum requirements determined by the department, has contributed to a backlash against VA-backed loans.
“Many veterans who try to buy a home using a VA loan find they just can’t compete,” the chairman of the House Veterans Affairs subcommittee said on Economic Opportunities, Mike Levin, D-California, during a hearing Wednesday.
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Sellers are less likely to accept VA-backed offers than conventional offers, according to a National Association of Realtors survey released earlier this year. While 89% of sellers said they would likely accept an offer from a buyer using a traditional bank loan, only 30% said they would do the same for a VA-backed buyer.
Sellers’ fears are not entirely misplaced. The average wait time for a VA-led assessment is 14.8 business days, acting executive director of the VA’s Loan Guarantee Service, John Bell, told the subcommittee. Non-VA assessments can take less than two days to process.
The VA has 6,000 assessors nationwide, according to Bell, but advocates on Wednesday called for a larger workforce and suggested paying workers more as an incentive.
“There’s a shortage of certified appraisers, and VA appraisers are even harder to find,” said National Association of Realtors President Leslie Rouda Smith.
Of the association’s 1.5 million members, less than 1% are officially certified to work with eligible veterans, active duty members, and military spouses to find the best housing options through the Professional Certification Program. group’s military relocation, she said.
Higher inspection standards among VA appraisers also deter sellers from accepting VA-backed offers, said Emily DeVito, associate director of Veterans of Foreign Wars. Fifty-nine percent of sellers said stricter inspection requirements reduced the attractiveness of the VA loan, according to the National Association of Realtors survey.
“[The VFW] also recommends funding VA to conduct public outreach and marketing to counter misinformation about the actual term of VA-backed loans,” DeVito told committee members.
Levin said “seller apprehension” toward VA loan-related offerings will need to be addressed.
“We have to make sure people are competitive,” he said.
-Mary Yang is a reporter for the Medill News Service.
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