VA home loans don't get any respect from many lenders, according to a published report.
Veterans Affairs Administration loans are intended to be a benefit to active and retired service members: They allow no-down-payment house purchases, and a low interest rate on the loans, but misperceptions about the riskiness of the buyers, combined with the reality of stringent inspection standards and piles of paperwork, have left many sellers unwilling to take VA bids, real estate agents and mortgage brokers throughout the region told the North County Times. The delays and denials promise frustration for at least some of the 265,000 veterans in San Diego County and the tens of thousands of active duty personnel in the region.
"Those guys are bottom on the list, and they should be top, if there's any patriotism to any of this," said John Linthurst, the Cowleses' real estate agent.
The VA could not provide a policy official to comment on this story last week.
To some extent, VA buyers are penalized by the excesses of the housing boom, when unqualified buyers took multiple loans so they could purchase more expensive houses than they could afford. Some sellers see a no-down payment loan, and even though it's backed by the VA, they get nervous that the deal won't go through, said Malcolm Davies, a mortgage banker and branch manager with Opes Advisers. But VA loans have to be fully underwritten, like any conventional loan, Davies said.