Break Down The Barriers To Veteran Homeownership
There are about 46,000 active duty and reserve/guard personnel in Hawaii today and an estimated 140,000 veterans, yet per Jennifer Thomas of Title Guaranty Hawaii, only 2,932 VA home loans were done in Hawaii in 2013. Why is that?
Lack of financial literacy and lack of education on the loan program from our real estate community could be the cause of this. Nationwide there is a stigma to the VA loan that impedes many veterans use of the program they have rightfully earned.
According to the Department of Veterans Affairs presentation at the inaugural Veterans Association of Real Estate Professionals Policy Conference in Washington D.C. this past June, the stats on the average VA buyer in 2013 were as follows: Median FICO Scores of 722, median assets of $8,670, median income of $71,066, and 17% were active duty. Those are very good numbers for qualifying for home loans and the median income is actually about $3,000 more than the median income of all of Hawaii, but the alarming number is that just 17% of active duty invested in a home in 2013. Again, why is that?
The general assumption in our market is that the VA loan is slower than conventional and FHA financing and that the appraisal system makes it too hard to do VA loans in a fast paced sellers’ market. This is where I think we need to start debunking the myths. There are a few great companies locally including Mann Mortgage who specialize in VA Purchase loans. With local processing, underwriting and funding locally this process can easily match other financing options.
The VA buyer is motivated by time restraints that other buyers may not have, making them valuable buyers less likely to get cold feet than other types of buyers. In addition, with the recent changes to conventional financing qualification guidelines, the VA buyer actually has much higher buying power and much more flexibility in underwriting guidelines, making the loan actually less likely to be denied than other types of financing. We have to make sure that as a community we educate our active duty and veteran families as well as our real estate community on the earned benefits of doing a VA loan like zero down payment, zero closing cost option, flexible underwriting, and the absolute lowest monthly payment for a low down payment loan in the market.
Active military families have a lot to worry about with very unique challenges. Let’s do our part by welcoming them to VA education seminars either in a group setting or one-on-one, and let’s get those offers accepted. They deserve it. I have heard a lot of rumblings from our real estate community about sellers not accepting VA buyers, but I have never had a Realtor tell me they refused to sell a veteran’s home. Active military and veteran families deserve the chance to not only own their own home, but participate in the wealth-building concept many civilian families partake in.
Jeff Howard is the #1 loan officer in Mann Mortgage nationwide for 2012, 2013, and year-to-date 2014. He is Public Relations Director of the Veterans Association of Real Estate Professionals Hawaii Chapter. If you are active military, a veteran, or a Realtor and want to know more about VA Home Loans, please feel free to contact him directly at 808-258-7653 or visit his Facebook Fan Page at www.facebook.com/jeffhowardhomeloans.