Unfortunately, discrimination comes in many forms. Like all forms of discrimination, a lack of clear and accurate information is made available to those who are generally guilty of discrimination. And with most forms of discrimination, education is the one true way to make change possible. The sad reality is, when it comes to those that discriminate, some are so deeply embedded into the wrong information they will never allow themselves to see a path out of it. However, for most adults, once educated with clear and accurate information, much of the discriminatory process and belief systems are eradicated.
I bring this up because of ongoing issues with our nations veterans. Those who have served this country and meet all the eligibility requirements of that service have a base entitlement to apply to use a VA loan when they purchase a home. One of the great issues with this is that many veterans and spouses think that the loan itself is the entitlement. Well, nothing could be further from the truth. The only entitlement for those that meet the eligibility requirement is that they are eligible to apply for a VA loan! The VA guaranty only applies to the credit grantor, and the applicant must meet all the credit guidelines and restrictions! The veteran needs to do their homework. All lenders are certainly not the same. There is no one lender endorsed by the VA to do these loans, regardless of how many commercials they run on TV! So check with your local lenders. These are the very people who live and work in your own community. These are the professional men and women who know the product, the program, and local market conditions. Be sure you ask about their experience in doing VA loans as well as their timeline to get your loan closed! Remember, “The rate isn’t great if your closing is late!” Make certain you work with an experienced team of VA lenders!
The next issue is with sellers and Realtors® who discriminate against those who are using a VA loan to purchase a property. Let’s be honest, we all know it happens. It happens far too often that a great offer on a property isn’t accepted simply because the prospective buyer is using a VA loan to purchase. This silent form of discrimination is every bit as wrong as overt bigotry. While it may never be said out loud, many sellers have been coached by their agents not to entertain these offers due to misinformation and false beliefs. We have heard far too often that VA loans “take too long”, or “require too many repairs”, or “make the seller pay closing costs”. And while in reality, none of these things have to be true!
If a veteran is working with a true mortgage professional, that borrower has already gone through a certification of eligibility and likely already supplied some, if not all of the needed documentation to have the file approved. And yes, while in some markets, appraisal times can be a bit longer than those for other loans, a good mortgage professional will know those turn times and have made allowances for that in their closing timeline. As far as repairs go; it isn’t likely that anything noted for repair by the appraiser wouldn’t have come up in a traditional home inspection, so please let’s get serious about that sticking point!
Veterans have served their country and provide all of us the right to live our lives in freedom. That freedom allows some people to have false beliefs based on misinformation. Those people can often make discriminatory decisions based on that false information. So please, educate yourselves, your company, your referral partners, your agents, and those in your market that would be thinking about selling a home; there is no reason not to sell your home to a veteran using a VA loan. If you are working with the right professionals, who have taken their time to prepare the veteran for the purchase process, you are very likely not even going to know the difference from that loan or any other loan they might be using.
So let’s all take a moment and think. Do you really want to discriminate against a qualified borrower, just because they are a veteran who has earned the right to purchase with a VA loan? Is that who I really am as a seller? Is that the type of agent I want to be known as? As an originator/mortgage professional, am I doing all I can to inform, educate, and facilitate successful VA transactions?
Not only can we all do better; we should do better for those who have provided the very freedom we enjoy!