WASHINGTON, D.C. — The U.S. Department of Veterans Affairs announced significant changes to its home loan program, allowing eligible Veterans, active-duty service members, and surviving spouses to pay for certain real estate buyer-broker fees. This change, effective August 10, 2024, aims to keep Veterans competitive in the housing market amidst evolving regulations.
Previously, Veterans could not use their VA home loan benefits to cover buyer-broker fees. The recent update comes in response to a key class-action settlement involving the National Association of REALTORS®, expected to affect real estate practices later this summer. By allowing the payment of these fees, the VA seeks to prevent Veterans from being disadvantaged in their pursuit of homeownership.
The VA home loan program, celebrating its 80th anniversary this month, has been a cornerstone benefit for Veterans since its inception in 1944 under the Servicemen’s Readjustment Act, commonly known as the G.I. Bill of Rights. Over the past eight decades, the program has facilitated more than 28 million loans for Veterans. Last year alone, Veterans secured over 400,000 home loans through this benefit.
“We always want to put Veterans and their families in the best possible position to buy the homes they want, and that’s what this update is all about,” said Under Secretary for Benefits Joshua Jacobs. He emphasized that Veterans can now pay reasonable and customary amounts for commissions and broker-related fees, ensuring they remain competitive in a fast-changing housing market.
The temporary measures were introduced to mitigate any potential negative impacts from the class-action settlement. The VA will continue to monitor the settlement’s effects on the brokerage market and plans to pursue rulemaking if necessary.
Veterans using the VA-guaranteed home loan benefit are reminded that they can and should negotiate their buyer-broker fees. Additionally, the settlement does not prevent Veterans from asking sellers to cover these fees at closing, a practice that remains viable under VA rules. All fees charged must be reasonable and customary within local markets.
Empowering Veterans in the Housing Market: The VA’s Game-Changing Policy Update
This development is crucial as it addresses a potential barrier to homeownership for Veterans. Real estate markets are dynamic, with new models of realtor commissions emerging that could lower costs and boost competition. By updating its policies, the VA ensures that Veterans have more flexibility and bargaining power when buying homes.
The implications of this policy change extend beyond individual transactions. It reflects a broader commitment to adapting Veteran benefits to current market conditions, ensuring that those who have served the country are not left behind in the competitive housing market. As the real estate landscape continues to evolve, the VA’s proactive measures aim to support Veterans in achieving and maintaining home ownership.
In summary, the VA’s updated policy on buyer-broker fees is a strategic move to help Veterans stay competitive in the housing market amid changing regulations. By allowing the payment of these fees, the VA aims to enhance the home-buying experience for Veterans, ensuring they can secure the homes they desire without undue financial disadvantage.
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