Securing a home loan can be a challenge for any potential homebuyer. But for those who serve or have served in the U.S. military, the Department of Veterans Affairs (VA) can make a huge difference. As part of its mission, the VA helps service members, veterans, and eligible spouses become homeowners. The VA provides a home-loan guaranty benefit and other housing-related programs to help service members buy, build, repair, retain, or adapt a home for their personal occupancy. 

While more than 20 million home loans have been issued through the VA, not all real estate agents are familiar with the process. So we asked Cathy Palme, Branch Assistant Manager of our La Mesa office, to highlight what agents and potential buyers should know. Cathy’s father was in the Air Force, so she experienced firsthand how the VA assists military families, since hers moved about 25 times. She also pointed out there are more advantages to a VA loan than just the big one: not having to come up with a down payment.

Can a real estate agent be VA-certified?

Not by the VA itself, Cathy points out, but by many private lenders, such as banks and mortgage companies, including our affiliate HomeServices Lending. In addition, the National Association of REALTORS® offers its Military Relocation Professional (MRP) certification for real estate professionals who want to work with current and former service members. Each institution’s certification program educates agents about solutions that best suit the needs of military families and how to take full advantage of available benefits and support. The certification process can include online and classroom training, followed by a final exam.

When and how is a certified agent an asset to a military family?

There are times when a service member might have to move very quickly, says Cathy, who has held her MRP since 2009. Or, if they’re married, the spouse might be the one looking at the property instead, so the agent has to be their eyes and ears. “You really want to bond with that person. You want them to know that you’re going to take them through every step of the process, and to not worry because you’re handling everything. You know all the VA guidelines, you know enough about loans that if they ever have a question, they can run it by you. It’s being aware and reassuring these people that you understand how they feel, and you’re not going to let them down. And so there’s a really good emotional part of that that you get trained for.”

Besides the no-down-payment benefit, what else does the VA program offer?

If they’re not working with a VA-savvy agent, clients might not be aware of the maximum benefits they’re entitled to, Cathy stresses. Some examples:

• Funding fee waiver: The loan fee is waived for any applicant who has what the military considers a 10 percent service-connected disability. Many veterans have that level of disability, but if the agent and/or lender don’t know about the waiver, it could mean the applicant must pay the funding fee. An agent knowledgeable in the VA process would insist on the waiver.
• Property tax break: An applicant with a 100 percent disability can receive an annual property-tax break–called an exemption–which varies by county. In San Diego County, the current exemption lowers the tax liability by approximately $1,700. Once again, an agent well-versed in the VA process will be sure to inform the buyer about this benefit, which is available through the county assessor or recorder.
• No mortgage insurance: Most loans with a down payment of less than 20 percent require the borrower to purchase mortgage insurance, which compensates lenders or investors for losses if the loan defaults. VA loans do not require mortgage insurance, which can typically cost several hundred dollars a month.
• Vendor discounts: VA discounts also are available from vendors who can be involved in the homebuying process, including title insurance companies, home inspectors, and appraisers. It’s always worth it ask, Cathy says.

Do lenders like to fund VA loans? 

“Yes, they love them because they’re government-backed loans,” Cathy says. “Plus, getting through escrow can be faster, and you’ll definitely get better terms because there’s zero percent down. And if you don’t have enough to cover closing costs, they’ll typically cover them and just bump your mortgage rate up only a little bit. So they’re golden.”

How can a VA beneficiary find an agent who either has an MRP or lots of experience with VA loans?

The best way to find a VA specialist is to ask around in your network, and don’t be shy to ask your agent about their experience, Cathy advises. If he or she can’t answer questions specific to VA loans and home buying procedures, you should find someone else who can. They also can ask their human resources department if it knows of any agents. And borrowers should always ask the agents they interview if they have handled VA clients in the past.

How can agents benefit from learning about VA loans?

“Something I always tell agents is that if you do a great job for military families, they are the most loyal clients you will ever have,” Cathy says. “I get more referrals from them than from any other clients. Once you show them you are genuine and understand their military lifestyle, and are knowledgeable about all aspects of VA transactions, they will continue to call you, and use you, and praise you to their friends. So yes, it’s completely worth it.”