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Tellmewhyple…, Both Buyer and Seller in New York, NY

Buying a home with a VA loan. Why are owners and brokers skeptical of funding?

Asked by Tellmewhyplease, New York, NY Sat Nov 5, 2011

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Good morning Tellmewhyple...

I have long assisted Veterans with mortgage financing on VA Guaranteed Loans for 22 years and I will tell you that the uneducated Realtor and Seller are the biggest obstacle to a Buyer using the VA benefit earned by serving our country. There's some myth floating around in the smog layer above the Five Boroughs that VA financing is really slow and intolerably difficult on the Seller, the Realtor, the Realtor's extended family, including the family dog, not to mention the Seller's third cousin twice-removed. In other words, the reaction to VA financing is contrary to the actual experience.

I'm a Local Mortgage Banker in the NY Metro Region. My FHA Loans and CONVENTIONAL Loans are typically approved and ready to close in about 3 weeks. My VA Loans take a little longer, about 6 weeks. So, it's a little slower, but not to the extent that Skeptics would have you believe.

Too, I find that many mortgage professionals haven't a CLUE about how to properly qualify a Veteran. I recently originated a beautiful VA loan that started out with one of the "Big Banks" and hung around there with no activity for 3 and a half months. After all that time the Loan Originator woke up and realized the Veteran wasn't allowed to use his fiance as his cosignor. This is a fundamental qualifier of VA Guaranteed Loans: A Veteran may only qualify with a spouse or another veteran (hint: the fiance is NOT a Vet!).

As several professionals mentioned earlier, the property type is a potential issue, too. There are very few VA Approved Condos in Manhattan and the Five Boroughs. VA does not guaranty loans on Co-Ops. And multi-family homes loans are too difficult to approve under VA guidelines. Bottom line on property type is this: SFR or Single Family Home. Find VA Approved Condos here: https://vip.vba.va.gov/portal/VBAH/VBAHome/condopudsearch


I think also our market is affected by the "newness" of VA loans. While I originated many VA loans in the 90's, I have only recently seen an increase in requests by Veterans to use their benefits.

Your VA office is the best source for referrals to a Local Mortgage Banker who is VA Approved.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Sun Nov 6, 2011
An NYC's #1 VA Home Loan Specialist & someone who has worked with Veterans for 20 Years - what I can tell you is that Brokers & owners Have NO CLUE about the Program & How it works - They think they know - But they Do Not....that is why we are rolling out the SELL TO A VETERAN program - which will educate EVERYONE on the VA Home Loan Process -
0 votes Thank Flag Link Tue May 6, 2014
Sorry Folks-
But as of lately (July 2013)...
YES THE VA IS UNBELIEVABLY SLOW.
I have been trying to purchase my first home through the VA. I have been waiting 3wks for a VA home appraisal approval & VA to complete their end of "underwriting". I have been quoted ANOTHER 6-8WEEKS to complete this process (citing large workloads & under staffing). We are scheduled to close on the house in less than 2wks. By the time VA gets me an approval: my credit scores, INTEREST RATE, home appraisal, and home inspection will all be too old to use to continue the mortgage process. This is incredibly ridiculous. I will not be able to purchase this home; let alone find another place to live within two weeks time. I am contacting my state representative in order to push the process into action. ANYONE looking to purchase through VA at this time- get ready for a long and difficult ride. Sorry people; but waiting up to 4 months or longer for a VA approval has nothing to do with uneducated realtors or brokers........
0 votes Thank Flag Link Thu Aug 1, 2013
it is the quickest loan to close if you know what your doing - you need to contact me if you want to work with Veterans
Flag Tue May 6, 2014
They are likely just unfamiliar and not experienced with the program. Perhaps your loan officer can offer to speak to the listing agent to assure them of your qualifications and ability to secure a loan.

Good luck,

Richard Schulman
Keller Williams Realty
0 votes Thank Flag Link Sat Nov 12, 2011
They don't know any better and are not experienced with them, otherwise they would know its one of the best loans to accept.


Marco Gomez
Associate Broker
Keller Williams Landmark II
Marco.gomez@gmail.com
Covering Queens, Nassau, Brooklyn & Manhattan
0 votes Thank Flag Link Mon Nov 7, 2011
Fair housing, and fair lending practices require lenders and agents to give you facts so that you are properly educated on the buying process. The fact that you are on trulia talking about it, you clearly were not given the facts. Owners are not schooled agents, so they need to be educated on what VA program is. If a property for whatever reason won't allow for no money down financing (main benefit of a VA loan) , Instead of going through VA use another program, there are others! Use your VA benefit on your next purchase if it makes sense.
0 votes Thank Flag Link Sat Nov 5, 2011
Tellmewhy,
I would not say it's a matter of being "skeptical" of a VA loan; but rather the fact that what you are probably looking at are co-ops and condos. In other parts of the country where you would likely be purchasing a private detached home, a VA loan might be fine. Here in NYC, which admittedly is a quirky market, co-ops and condos have particular requirements where funding is concerned. Co-ops require a minimum of 20-25% down, often more. Condos require 10% down. There is no getting around that. In addition when a seller's agent looks at an offer, they do not just look at the amount, they look at the percentage down (more is better) and other terms. Some recently built condo buildings have applied for and received FHA approval. That allows them to accept as little as 3.5% down, so your best bet with your VA loan is to look into FHA approved condo buildings.
0 votes Thank Flag Link Sat Nov 5, 2011
NYC agents are not skeptical it's unfortunately not feasible to a VA loan here. Coops and Condos have their rules of what they want a buyer to put down. Typically a coop wants 20% down and condos allow 10%. That said, this is not negotiable. The only way a VA loan would work is if you find a new condo developement that allows a FHA loan (3.5%).
0 votes Thank Flag Link Sat Nov 5, 2011
It's possible they simply don't know better; if you are preapproved no reason to be skeptical...
0 votes Thank Flag Link Sat Nov 5, 2011
I personally am not skeptical of a VA loan. As an agent, we do need to qualify the buyers for our sellers. A buyer with 50% down is a much better deal than a buyer with 10% or 5% down. There is much less risk that the deal won't happen and we can help our sellers feel more comfortable with the quality of the deal. We are also very aware that government backed loans like FHA or VA just take a lot more time to process, and close. That is not the intention of them, but it is a reality. I am not a mortgage expert to provide the details, but it is something that I have seen. We have an obligation to be open and honest with our sellers so they know this. Part of the issue for owners is that they have invested a lot of time in trying to sell their property, and when they have a deal, they don't want to wait to finally close. Many times they really do need to move quickly, so deals that take longer than standard timing for them are no go's. Now, if I were a buyer, and were qualified, and had a substantial amount to put down, AND could get a VA loan, better for me. The agent below is correct in that there are a lot of protections, and they make for very nice loan packages for buyers. I wish you luck in finding a place, just make sure that you have a mortgage broker who has done a lot of VA loans and can make the process very smooth for you and your seller.
Kelly Killian
Bond New York
954-675-9915
0 votes Thank Flag Link Sat Nov 5, 2011
Are you putting money down?

Most sellers and agents are not skeptical of your funding. They are skeptical of no money down. If you put no or limited money down and then change your mind about moving forward after you have fully executed contracts the seller will be left just holding a contract and no money for the time lost with the deal.

I am dealing with a similar situation at this time as I type this response. The buyers offer a great offer and they are getting 100% va funding on the purchase of the home. Their initial offer had an earnest down payment that would put no burden on the buyer to execute the terms of the deal.

If the down payment on contract is the challenge ask the sellers agent to explain their concerns. Set a meeting to discuss the funding the challenge with your agent, the seller or the sellers agent and get resolved.

http://www.homefinder.com/content/Buying-Guide:Making_an_Ear…
Web Reference: http://EgenWarner.com
0 votes Thank Flag Link Sat Nov 5, 2011
Understand, there was a time, not very long ago, when there was no such thing as a VA Loan.
Even now, a lot of lenders do not do VA.
VA has the No-Down feature which is really important to us, but they also have restrictions on Closing Costs and extra paperwork to protect the Buyer.
Some Sellers have been "poisoned" into believing that they don't want to sell to a Veteran.
Try to work through it. We have a lot to overcome when I got out after Nam.

Good luck and may God bless
0 votes Thank Flag Link Sat Nov 5, 2011
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