The Department of Veterans Affairs announced a temporary fix to a lending issue that arose from the National Association of Realtors $418 million settlement.
Under the terms of the settlement, sellers are expected to negotiate with real estate professionals, and buyers have to enter into agreements with, and pay for, their own realtors.
For some buyers, this may translate into a cheaper overall experience, depending on what is negotiated for as part of the sale. But this poses a unique problem for veterans, as VA loans limit certain fees that a buyer may pay, including real estate commissions.
But this week, the VA addressed that problem. It announced that eligible Veterans, active-duty Service members, and surviving spouses who use the VA-guaranteed home loan benefit can pay for certain real estate buyer-broker fees when purchasing a home.
“This will help ensure that Veterans remain competitive and are not disadvantaged on the homebuying market due to changes that may result from a key class-action settlement involving the National Association of REALTORS®, which is slated to take effect later this summer,” the press release reads.
All buyer-broker fees charged to Veterans using the home loan benefit must be reasonable and customary within local markets, but are otherwise now viable when using a VA loan to purchase a home.
The move is temporary, as the department says it will monitor the settlement’s impact before pursuing a rule.
“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.
“Veterans using VA home loan benefits can now pay reasonable and customary amounts for certain charges — including commissions and other broker-related fees — thus ensuring that they remain competitive in the rapidly changing housing market.”
It urged veterans to remember that they should still negotiate their buyer-broker fee and that the settlement doesn’t prevent buyers from asking sellers to pay fees at closing.
The VA home loan program was created in 1944 as part of the “G.I. Bill of Rights,” or Servicement’s Readjustment Act. It will celebrate its 80th anniversary this month.
Last year, Veterans took out more than 400,000 home loans using the program.
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