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.
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........
Keller Williams Realty
Keller Williams Landmark II
Covering Queens, Nassau, Brooklyn & Manhattan
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.
Bond New York
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.
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