Home Buying in Plano>Question Details

Russ Roberts, Home Buyer in 75070

I am preapproved for VA financing, but the builder I want is telling me it is hard to deal with VA guidelines, would it be discrimination against me.

Asked by Russ Roberts, 75070 Thu Sep 1, 2011

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VA guidlines are not hard to work with. In fact they are similar to FHA. I would say the builder is trying to get out of paying fees. I would be more concerned he is not more focused on going the extra mile to get the deal together, and concerned his build isn't quality.
0 votes Thank Flag Link Sun Jan 15, 2012
Mr. Roberts,

Find a new builder! Veterans are prohibited from paying certain closings costs which are referred to as non-allowables. Depending on your lender and the title company, these non allowables can typically range from $1500-$3000. This is most likely the reason that your builder is pushing against VA financing. The builder will also have to pay for a 2/10 warranty which may also be the reason. This is required for VA, FHA and USDA loans which is why I believe the non-allowables are the real reason.

Unfortunately a builder can choose to build and sell a home with a financing requirement that excludes specific types of financing including VA. The builder is at full liberty to do this without violating any fair lending laws. If you are dead set on using this builder you can have your lender cover the non allowables however this typically equates to an interest rate increase of .125%-.25% to cover these costs.
0 votes Thank Flag Link Fri Jan 13, 2012
The VA is definately not as hard to deal with as the used to be. And by the way, that was because they had high standards protecting our Vets! Is he having trouble meeting high standards?....hummmm
0 votes Thank Flag Link Fri Jan 13, 2012
I would definately look for another Builder! The Va guidelines should not be an issue. Years ago, they were terrible to deal with, They had so many demands one veryone, and they were Super slow. But now? The last VA I closed was within 30 days! You have earned this priveledge, and you should use it
0 votes Thank Flag Link Thu Jan 12, 2012

As a retired US Army 1SG, I bought new construction in 2010, if you need assistance, please contact me TODAY at 214-872-0400.

Michael Brownstead
Ebby Halliday Realtors
0 votes Thank Flag Link Thu Jan 12, 2012
Sorry, meant zip codes, not area codes. S. Spencer
Flag Thu Jan 23, 2014
I am a disabled Veteran, I would like to be able to build a house with an in-law suite, square footage - 2600, area code - 19063, 19015, 19014, in that general area. Would you know around what the cost would be? I only need .25 acre. Thanks. S. Spencer
Flag Thu Jan 23, 2014
Dear Mr. Roberts,
I have been a Real Estate Professional for 18 years and understand this process well. Please contact me so I can assist you with this transaction.I'm happy to help you!!
0 votes Thank Flag Link Thu Jan 12, 2012
I spent over 25 years working for new home builders, so I know all the ins and outs of purchasing a home through them. Please contact me and I will assist you and make sure it it a smooth and seamless transaction.
0 votes Thank Flag Link Sat Jan 7, 2012

I am a retired U.S. Army First Sergeant and now a Realtor with Ebby Halliday Realtors®, http://www.ebby.com/agents_offices/find_agent/info/michaelbr… I purchased a new home from a builder here in Frisco, TX in May 2011 and it was a very simple process, yes, the guidelines are different from other loans, but the process is still simple! If the person you are dealing with tells you the process is difficult, perhaps you should contact the home office of the builder for assistance or seek the representation of a REALTOR®.
0 votes Thank Flag Link Sun Oct 2, 2011
There are lots of builders out there. Get another one with VA experience and get an experienced Realtor to represent you. Someone with New build experience.
If you are going to build a new home you have a chance "to get it right" for you and an experienced realtor can help you be sure the plans work, you are not wasting money on wasted space and help you stay in budget.
Charles Elias
0 votes Thank Flag Link Tue Sep 6, 2011

Keep your options open. I think VA financing is best in most cases, but not all.
A builder discouraging you? This surprises me.
New home construction should not be that big of a deal.
Old homes that need work...that can be a problem.

What does your realtor say? What does your lender say? Can your lender
talk to the builder to give reassurances. There are a lot of "horror" stories
about VA financing, that probably just aren't true. They don't work for all cases
but with a new home I don't see a problem. It will need to appraise....and the
home will need to be in good condition.

Go for it.

If you need help let me know. ALWAYS ALWAYS ALWAYS use a realtor when purchasing from a builder.
You can see why at this link:
0 votes Thank Flag Link Fri Sep 2, 2011
Bruce Lynn, Real Estate Pro in Coppell, TX
No, Russ, veterans are not a "protected class" under the Fair Housing Act.

The good thing about VA financing is that it takes some of the financial burden off of the purchaser. The big mistake, in my view, it that it has placed some of that burden on the seller. In my view, the Government - We the People - should absorb that cost as a small part of the collective "Thank You" for your service.

But, we don't, and it is, and so, yeah, you might find it more difficult to put a deal together with VA financing than if you had FHA financing.

So sorry,
0 votes Thank Flag Link Fri Sep 2, 2011
Did you hire a Realtor to represent you and your best interests in buying a home? That Realtor should be your advocate with the builder. You have seen some good information below...and it likely is a matter of money (since a VA buyer is not allowed to pay some of their closing costs so the seller has to pay them). In the Dallas/Fort Worth area the non-allowable expenses are not too high....so the builder should be able to work with you to get this done.

Good luck! Enjoy your new home.
Melissa Hailey
Coldwell Banker Jane Henry Realtors
North Texas Top Team, Realtors
0 votes Thank Flag Link Fri Sep 2, 2011
I am amazed the builder would say that? I have not found my clients having any issues by using VA financing. It is a Veterans right to use this service. You have earned it!
0 votes Thank Flag Link Fri Sep 2, 2011
I am surprised that a builder would say that. VA loan guidelines are not difficult, perhaps this builder is remembering how these loans worked in the past because it is just not that way today. I just closed with clients a new construction VA loan and there were no complications, the lender just has to be sure to order the final appraisal at least 2 weeks prior to closinng - that is the only major difference I know of. I do hope you are using a Realtor to assist you because they would be able to address this issue with the builder for you. The builders in this area are usually very cooperative and eager to do business with you. Yes, they would prefer you use their lender but you have the final choice (by the way their lender should be able to do VA loans).
Web Reference: http://www.LindaLorenzo.com
0 votes Thank Flag Link Fri Sep 2, 2011
All right agents, let’s say your commission rate is disclosed at the beginning of the deal and you typically get 3%, then the buyer says I have switched to a special loan which only allows 2% are you still happy? If the financing was disclosed upfront as a VA loan product and the builder bid the job and accepted the job the builder should move forward and keep all parties happy. In our area if it is switched from FHA to USDA or VA it is NOT a few hundred dollars but several thousand dollars since we have to frame in the basement and insulate and provide different sizes and more sheetrock. It’s a BIG deal, in the 70’s and 80’s not so much. We appreciate all who served and we would bend over backwards to help but this is a business, like my comments earlier if the VA loan product was disclosed upfront then the builder should move forward and live up to their commitment.
Web Reference: http://www.randshomes.com
0 votes Thank Flag Link Fri Sep 2, 2011
Unfortunately, it may seem some builders are more concerned about the financing than building a quality home. But I can assure you the really good ones with excellent reputations don't care what kind of financing you have. New home sales/building is DOWN and builders are crying for business. You being a "pre-approved" buyer makes you highly desired. Balking at building to VA specs, which cost maybe a few hundred bucks, is a farce! From your statement, the builder hasn't said "no" to building VA. Negotiate for yourself and tell him you respect his point of view and don't want to cause him stress over this situation and you'll pursue other avenues. I promise he'll change his mind. But if he doesn't, there are plenty of awesome builders who would be ecstatic for your consideration. Along with being a Realtor for 36 yrs, I've also been a custom home builder from the 70's through the 80's priced from $140K to $400K and was proud to build for Vet's. I considered the VA "extra costs" as a small token of appreciation or my "thank you" to the Vet for service to our country. It's cases like this that are supreme examples of why people need a Realtor. Best of luck!
0 votes Thank Flag Link Thu Sep 1, 2011
The builders prefer that you use their lender, as it allows them to save on fees and offer discounts to you, the buyer. VA, FHA and other loans do cost the seller/builder more money, so not all sellers will work with buyers with these loans. It isn't a question of discrimination but an issue of costs they don't want to pay. Some builders are more flexible than others. You should have your Realtor talk to the builder.
0 votes Thank Flag Link Thu Sep 1, 2011
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