VA Changes Rule - Updated Benefit Rules to Help Veterans in changing Real Estate Market

VA updates home loan benefits, helping Veterans remain competitive in the housing market
June 11, 2024

Valery P. Behr

Loan Guaranty Service, Veteran's Benefits Administration

In March, the National Association of REALTORS® (NAR) reached a settlement in a class-action lawsuit that requires NAR to change its brokerage fee rules. This could result in changes to the real estate market. Before that settlement takes effect, VA has announced an update to help ensure that Veterans using the VA-guaranteed home loan benefit remain competitive buyers. Specifically, eligible Veterans, active duty service members and surviving spouses who use their VA home loan benefits can pay for certain real estate buyer-broker fees when purchasing a home. This update is intended to ensure VA’s programs continue to promote access to homeownership for Veterans.

What is the impact of this settlement?
The full impact of the settlement is not yet certain because the real estate market is still adjusting, but there may be an increased expectation that home buyers will pay for their own buyer-broker fees. In VA’s program, it has been common practice for sellers to pay for the Veteran’s buyer-broker fees.

Why does this potential change matter for Veterans using the VA-guaranteed home loan benefit?
Until today, Veterans could not pay buyer-broker fees when purchasing a home with a VA home loan. In light of the settlement, Veterans could be at a disadvantage in the evolving homebuying market, so VA released this update to make sure that Veterans remain competitive buyers.

What does this mean for you?
Simply put: Veterans using VA home loan benefits can still negotiate and may now pay for their real estate professional’s commission (i.e., the buyer-broker fee), subject to certain safeguards. VA encourages Veterans to seek out the services of mortgage lending and real estate professionals who have experience with the VA home loan program to ensure they are familiar with the specifics of compensation negotiations and the impact of the settlement on home purchase contracts.

Should you negotiate these fees?
VA encourages Veterans to negotiate buyer-broker fees with their real estate professional. Veterans can also still ask sellers to cover the buyer-broker fees at closing. In addition to other safeguards, all buyer-broker fees charged to Veterans using the home loan benefit must be reasonable and customary within local markets.

Will there be future updates?
The full impact of the settlement on the real estate market is yet to be determined. The temporary measures announced today will help ensure that Veterans are not negatively impacted by the class-action settlement. VA will continue to monitor how the settlement affects the brokerage market, as well as new models of realtor commissions that may emerge, and do what it can to help lower costs, boost competition and increase avenues to home ownership. VA looks forward to pursuing a rulemaking. Rest assured: VA will do everything in its power to make sure Veterans are not disadvantaged in the homebuying process.

For additional information about this update, please visit Circulars: Calendar Years 2021 to Present – VA Home Loans.

[orlandos]

I watch your channel everyday because you are a true patriot. The info that you put out is straight forward. Thanks

[vahousingeducation]

Another great video. It’s definitely interesting. The challenge here is that most people don’t have enough money to pay a realtor the extra money. You’re right, I think it will shift to veteran’s going directly to sellers agents and representing themselves. I’m working on a course to help veterans purchase properties without an agent.

[jetfan]

The Buyer is the one coming to the table with the $$$. Everyone else has their hand out. Both realtors AKA "Glorified Tour Guides", the assessor that just looks at comps within a mile or so, the home inspector, mortgage broker who will be salivating over fees, etc.

[joshd]

I couldn't agree more, Stan. The cinnamon pop tarts are the best. Yep, if we VIEW the video, we should LIKE the video. Thank you for the update as always. You channel has become my morning coffee checkin. ☕🐓

[paulwitmer]

Very good write-up. This is where a cooperative would help. The VA should secure honest buyer brokers four veterans
Wherever there is a VA facility. There should be a predetermined cost for their assistance
Which the veteran would be free to use but not required. We live in a highly technical world and you can't be expert at everything. Deviation help us leverage our knowledge but this will be hard to do because the healthcare service leaves you in ignorance what are the secret backroom policies and practices. You learn the hard way after the damage is done. When Care is delayed carer is denied, to paraphrase illegal axiom.

[NBC_NCO]

Buying a house should be as easy as buying a used car.

Throw your money down on the table, get the deed, and be done.

But that is a good deal right there because the house that I got right now was purchased with a home loan from the VA, and the seller told me that he will never work with the VA again.

[cbax-kiqj]

Thank you Jason for all the info. 👍
Stan the rooster 🐓 ❤😊

[MrAbsalomdavid]

This “rule” is just another pointless piece of bs to put on resumes that changes absolutely nothing in the end. It actually screws veteran buyers into paying for their parasite, and on the flip side, veteran sellers benefit if they negotiate for the buyer to pay their lamprey/agent. The key is, “how many veteran sellers are even going to know about this?” Information is the key, and for that, I thank you, Jason!

[seantyler]

However the listing agents duty is to seller so the buyer isn’t going to be well represented

[edfowler]

Soooo... I would negotiate with the sellers agent. Self represent. Use a buyers disclosure from your local office supply. Get a seller paid warranty and negotiate a reduced commission. Use that money for inspections. These changes not only suck for veterans, but for all buyers.

[thepauldetray]

The VA loan used to be awesome when the APR was always lower than the regular market but now its just not very competitive. I was also able to do a one time closing construction loan with it 5 years ago now its almost impossible to get that done. The amount of clients I have now that are vets using the VA is almost none existent I typically encourage my customers to look at refinance with the VA loan as soon as rates go down. I should have disclosed this is all from a builders perspective and I am a veteran hence subscribing to the channel...

[samuelwilkes]

Great endeavor, I have confident that u will be successful...

[dsmalls]

I’ll ask you again- why don’t you do a split screen with the articles that you read from on your videos, so we can see the information and their sources?

[antcri]

You don't have to use a realtor. Closing cost are a scam created by realtors. I have bought and sold 3 pieces of property in the last 2 years with no realtors involved. The only extra cost was a notary fee of $10 and a recording fee at the courthouse of about $50.

[georgeferlazzo]

@Veteran InfoTap
Thank you for another Great Video 👍 I 'll be glad when this mess straightens out. 😊Again thank you

[snarf]

Thank you for the video of stan.. he needs to be your opening video.. "Sponsored by Stan!"

[BrianL]

Dirt bags turned me down for MH, even with a very good Nexus letter.
Navy worsened my MH condition.

[Criquette-dftv]

Hey good morn’n Stan 🐓❤📢 Love the intro👍

[vikkiwinfield]

Yay! Stan! Thank you for showing us Handsome Stan :)

[starrleo]

That makes sense tho !I wish this was available 5 years ago, when i purchased my house!😅😅