SOURCE: National Association of Realtors

National Association of Realtors

May 20, 2010 14:41 ET

NAR Offers Congress Ideas to Strengthen a Successful VA Home Loan Program

WASHINGTON, DC--(Marketwire - May 20, 2010) -  The National Association of Realtors® offered some suggestions to Congress today toward making a good Veterans Affairs Home Loan Guaranty Program even better.

Testifying before the House Subcommittee on Economic Opportunity, NAR First Vice President Moe Veissi, broker-owner of Veissi & Associates Inc., Miami, praised the VA program that encourages private lenders to offer favorable home loan terms to qualified veterans.

"The program is most effective when it provides veterans who are unable to qualify for a conventional loan with favorable loan terms," Veissi said. "VA's strong, yet flexible, underwriting helps veterans purchase a home of their own without depleting their savings." Veissi's son is a soldier who is on active duty with the army in Iraq.

To date, VA has guaranteed almost 19 million loans to American veterans, with a total value of more than $1 trillion in guaranteed loans. Eighty percent of veterans are homeowners, which is significantly higher than the national average at 67.2 percent. More than 90 percent of VA home loan borrowers have used the zero-downpayment option, Veissi said.

"And their track record is fantastic -- the default rate and delinquency rate for VA loans are far better than subprime, better than FHA, and even better than prime. Despite all the talk these days of 'skin in the game,' this program shows that solid underwriting is the key to sustainable homeownership," Veissi said.

He also noted that the VA has never guaranteed subprime loans. As a result of the subcommittee's work and the passage of the Veterans' Benefits Improvement Act of 2009, veterans have been able to refinance their distressed non-VA loans into safe, affordable VA loans.

Veissi called upon the panel to make permanent the current loan limits that provide loans up to 125 percent of local area median price, set to expire in 2011. He also asked Congress to extend the availability of the VA adjustable-rate mortgage or hybrid ARM through 2012 and make it permanent.

NAR believes that VA should give borrowers the flexibility to negotiate fees as a normal part of home purchase transactions. Veissi pointed out that, while NAR supports VA efforts to limit fees paid by veterans, a high percentage of sales in his home state of Florida are foreclosures or short sales. "Since there is no seller to pay the fees, veterans are completely shut out of this market, which often includes the most affordable homes," he said.

To step up its efforts to educate Realtors® about the program's value, NAR partnered last year with the VA to produce "Unlocking the Future," a VA toolkit for Realtors® and homeowners that is comprehensive and informational. It contains a DVD and brochure, with videos and answers sheets, to guide veterans through the home loan process.

"When my son, along with all of America's sons and daughters, returns home, I will be most proud that the VA is there to make good on the promises our nation made when they joined the military," Veissi said.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. 

REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS®. All REALTORS® are members of NAR.

Contact Information

  • For further information contact:
    Lucien Salvant
    202/383-1176
    Email Contact