The competitive real estate market in 2024 has created several challenges for VA borrowers, from appraisal issues to dealing with misconceptions about VA loans. In an effort to level the playing field, the VA has recently made some updates to its policies. Now, buyers have the ability to pay for agent fees for VA mortgage loans. Below, we’ve discussed the matter in detail.
Recent Changes in VA’s Policies on Agent Fees
The Department of Veterans Affairs (VA) has recently announced a significant policy change regarding agent fees for VA loan borrowers. Previously, VA rules prohibited homebuyers from paying their agents, which placed VA borrowers at a disadvantage in competitive housing markets. This rule has now been temporarily lifted, allowing VA borrowers to pay “reasonable and customary amounts” for buyer agent services out of pocket.
This change was driven in part by advocacy efforts from organizations like the National Association of Realtors (NAR) and the Mortgage Bankers Association (MBA). These organizations argued that the prohibition disadvantaged veteran buyers, especially in tight inventory markets.
While the policy is currently temporary, the VA plans to engage in a formal rulemaking process to potentially make it permanent. This change could help ensure that veterans have the same opportunities as other buyers to compete in today’s housing market.
Important Aspects to Be Aware Of
While this is an exciting change that could have a positive impact on VA borrowers, there are some important factors to be aware of. First, the new (temporary) policy hasn’t officially taken effect yet. The change will be implemented starting August 10, 2024. Additionally, the policy is subject to certain conditions. For example, charges to be paid by home buyers will be considered when determining whether they have sufficient assets to qualify for VA mortgage loans.
Tips for Crafting a Compelling Offer
In addition to paying for agent fees, there are many other steps that VA borrowers can take to make their offer appealing to sellers. VA borrowers can craft a competitive offer by getting prequalified, offering a larger earnest money deposit, and being flexible with the closing date. Writing a personal letter to the seller can also help create an emotional connection. Additionally, limiting contingencies and increasing your down payment can make your offer more appealing.
Talk to an Expert About VA Mortgage Loans
VA mortgage loans can be an excellent option for those who qualify due to their competitive terms, low rates, and no downpayment requirement. For more information on the process or to get started with your application, reach out to our expert team today!
