"If you serve this country, the federal government ought to have your back"
US Representatives Derek Kilmer and Guy Reschentaler have urged the US Department of Veteran Affairs (VA) to improve the VA mortgage loan process and increase loan competitiveness.
Both representatives sought to give veterans the negotiating power throughout the home buying process. The request was addressed to Secretary McDonough and was made through a bipartisan letter with over 60 signatories composed of other representatives.
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According to the National Association of Realtors, the median home sale price is up 15% YOY from February 2021, marking 120 consecutive months of YOY increases – the longest-running streak on record.
The rise in cash and conventional loans with waived contingencies has also left veterans unable to compete with other buyers. In fact, 11% of VA borrowers end up changing loan products during house searches compared to the 1% of conventional buyers who do so.
“If you serve this country, the federal government ought to have your back. That means that every veteran should receive the benefits that they have earned and deserve – including when it comes to housing,” Kilmer said. “I believe that every veteran should have a home, and it shouldn’t be under a freeway overpass. We’ve got to make progress to ensure that every veteran has a fair shot.”
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To gain a better understanding of the issue, Kilmer and Reschentaler are seeking answers to the following questions:
- How is the VA working to improve appraisal policy and procedure, such as minimum property requirements, to improve the ability of veterans to compete, while also maintaining appropriate levels of protection to the loan guaranty program and veteran home buyers?
- What level should the funding fee be set at to strictly cover the risk of default and the 25% guaranty payments in the home loan program?
2a. Does VA have the resources it needs to commission a study identifying what percentage of VA funding fee is currently dedicated to the home loan guarantee program, and what percentage is being diverted to other programming?
- How is the VA working to improve the public perception of the VA mortgage loan program?
- How can Congress assist the VA in its efforts to improve the competitiveness of the mortgage loan program?
The full letter can be read here.
