There is no better way for us to honor the brave men and women who serve our nation than ensuring they receive the benefits they were promised, including the ability to fulfill the American Dream of homeownership. The National Association of REALTORS® (NAR) is a strong supporter of housing for our nation’s veterans and active-duty servicemembers, and we are committed to the idea that all military families deserve the opportunity to purchase their own home.
The VA Home Loan Guaranty Program
When Congress passed the GI Bill in 1944, it introduced a range of benefits for veterans returning from World War II, including the VA Home Loan Guaranty program. This entitlement program provided an avenue to homeownership for veterans and servicemembers by encouraging private lenders to offer favorable home loan rates with down payment assistance. Regrettably, due to discrimination, these benefits were realized almost entirely by White veterans, and only a small number of the one million-plus Black WWII veterans received benefits to buy a home under the bill.
Today, fair lending is the law, and the VA Home Loan Guaranty program is a vital homeownership tool offering all qualified veterans a centralized, affordable and accessible method of purchasing homes as a benefit for their service. More than 25 million veterans have taken advantage of the program since 1944, and a record 1.4 million loans were procured in 2021. The loan program provides many unique benefits, including:
- No down payment requirement
- Competitive interest rates
- Limited closing costs
- No private mortgage insurance (PMI) requirement
- A lifetime benefit that can be used multiple times
Barriers to Veteran Homeownership
Despite the success of the VA loan program, veterans still face hurdles when purchasing a home. Many of the components designed to protect beneficiaries are also keeping them on the sidelines in the current housing market. For example, onerous limits on fees can make VA borrowers less appealing to sellers and unfairly shut veterans out in a market where homes can be sold in just hours.
Furthermore, the program has been an important tool for narrowing the racial homeownership gap for Black and Hispanic Americans. But because veterans and service personnel of color rely on it disproportionately, current obstacles to homeownership are magnified for communities of color relative to White Americans.
Advocating for Change
With the overarching goal to afford every veteran the opportunity to build wealth through homeownership, NAR closely monitors all policy proposals and legislation related to VA financing and advocates for policies to improve the program and increase its impact. In fact, 2022 NAR President, Leslie Rouda Smith, testified in December before the U.S. House of Representatives Veterans’ Affairs Committee, Subcommittee on Economic Opportunity, to highlight some of the current issues and propose solutions while calling attention to the work that REALTORS® nationwide are doing to serve our nation’s heroes by helping them secure safe, reliable and sustainable housing. Rouda Smith underscored the necessity for the program and the importance of strengthening it, pointing to its benefits for borrowers and its role in closing the racial homeownership gap. Her proposed solutions include:
- Making VA Loan Borrowers Competitive: NAR is working to ensure that veterans aren’t paying unnecessary fees while supporting their ability to purchase the home they wish to buy. We’re advocating for more flexibility in VA policies to help make VA borrowers as attractive as other borrowers, and to explore new ways of encouraging sellers to offer their homes to veterans and servicemembers.
- Funding: NAR continues to voice our opposition to any legislation that would increase VA home loan funding fees to offset costs associated with non-housing-related expenditures.
- Education: While many veterans are aware of the loan program, they may not understand the full advantages and potential savings. We encourage more robust marketing, either through the VA, or by including questions about active duty or veteran status on mortgage applications, providing military buyers the opportunity to receive details about the program.
NAR’s Military Relocation Professional (MRP) Certification
To help REALTORS® serve the complex needs and specific timetables of military homebuyers, NAR developed the Military Relocation Professional course. This special training equips REALTORS® with a solid understanding of the military niche to help current and former servicemembers take full advantage of available benefits and find the best housing solutions.
To learn more about how NAR is working on behalf of veterans, visit https://www.nar.realtor/veterans-affairs.
Sehar Siddiqi is director of Fair Housing Policy and Valuation for the National Association of REALTORS®.