The VA Loan Program

Dispelling Myths and Misconceptions

Charlie and I recently went through a training put on by the Veterans Association of Real Estate Professionals to obtain our Military Veteran Housing Certification (MVHC) designation. In this post I hope to dispel some myths and confusion regarding the VA loan benefit program and its origin, intention, and uses.

In 2010 the results from the National Veterans Survey revealed that 33.6% of Veteran respondents did not know about the VA home loan program, and 8.1% of VA eligible loan seekers had a REALTOR who discouraged the use of the VA home loan. I believe these statistics are a good representation of the population, as Charlie and I faced the same confusion and push back ourselves when we were seeking financing for a new home many years ago.

A brief history of the VA loan:

The VA home loan program was a part of the Serviceman’s Readjustment Act of 1944, which aimed to help Veterans buy homes when returning home after WWII. The program was conceived as a good alternative to a simple cash payment, as it would save the government money and better serve the needs of Veterans. As of 2017 there were over 740,000 funded VA loans totaling over 188 billion dollars in benefits!

What is a VA loan?

A common misconception is that the VA is a bank, and that the VA actually loans the money for and services the VA loan. The reality is, the VA simply guarantees the loan. The VA’s guarantee takes the place of the protection offered when a borrower puts a down payment or purchases mortgage insurance for a typical home loan. Most VA loans are handled by private institutions, and the VA simply provides the ability for the Veteran to obtain favorable financing options by guaranteeing the lending institution is protected from any future losses.

The loan is good for residences that will be purchased or constructed to be occupied by the Veteran, their spouse, or dependent children. Under some circumstances, condos and multifamily residences may qualify for purchase with VA loan benefits. You can find a list of eligible condos in your area here: Veterans Information Portal Condo Report. Or, find out more about VA multifamily eligibility here. The benefit may be used many times, and under certain circumstances an eligible Veteran may have more than one VA loan outstanding at any one time, on multiple residences.

How to find out if you qualify

It is vital to allow the VA to make the determination if the Veteran is eligible for a VA loan benefit. This is not a determination that should be made by a lender. Veterans should obtain a Certificate of Eligibility (COE) form 26-1880 directly from the VA. The COE is the official document that certifies if the Veteran is eligible for the VA benefit, and will indicate the entitlement, or amount the VA will guarantee on a loan, for each individual. The COE can be ordered by the lender online and is available within minutes. if the lender is not able to pull up the COE online it does not necessarily mean the Veteran is ineligible for VA loan benefits, it simply means the system does not have enough information to make that determination at that time.

Once eligibility has been determined, the Veteran is subject to lender determined criteria, called overlays, to determine if and for how much they qualify to borrow through that particular lender. The VA does not set these requirements. The overlays may include but are not limited to; credit score requirements, debt to income ratio, and consideration regarding the handling of collection accounts and bankruptcies. As overlays vary from lender to lender, it is advisable to consult with more than one lender when shopping for a loan to guarantee the Veteran selects the best option for their circumstances.

Allowable and non-allowable Fees

Once eligibility and lender qualification have been determined, there are certain closing costs and fees that must be considered and planned for accordingly to meet VA funding requirements. There is a maximum allowable amount of fees that the Veteran/buyer can pay for. If the seller, agents, or lending institution will not incur the remaining costs, the loan will not be funded. There is a list of reasonable fees the Veteran may pay for, which include appraisal and compliance inspections, title related fees and the VA funding fees, among others. The full list of allowable and non-allowable fees can be found in the VA Policy on Fees and Charges Paid by the Veteran-Borrower.

The VA appraisal and minimum property requirements

The minimum property requirements (MPR) for a VA loan ensures that the home is built to applicable local building codes and that it meets HUD and Federal building requirements and regulations. MPRs ensure the home is safe, structurally sound, and sanitary, and meets the acceptable standards of a home in its particular locality. The VA appraisal involves examining the home for potential safety issues, structural weaknesses, and any sanitation concerns, such as the presence of pests.

The appraisal and MPRs, in our experience, are where seller and agent concerns focus when it comes to considering an offer contingent on a VA loan. In reality, if the house being pursued by the Veteran is in safe, structurally sound and sanitary condition, there is little to fear about the VA loan. The loans can close as quickly as a conventional or FHA loan, and are often less expensive for the buyer. Many underwriting accommodations can be made for Veterans buying or refinancing with a VA loan, which makes them easier to qualify for. In some cases VA loans can be used to finance up to 100% of a home’s value, which can greatly expand a seller’s buyer pool.

As always, it is vital you consult with a lending professional for any specific questions regarding your personal financial situation. If you would like help finding a qualified lending professional to facilitate the use of your VA loan benefits, or contact us any time.

Additionally, you can click here to find out about our real estate services, and learn how working with us will support what we are doing to benefit our local Veteran population.

Somebody Has To Fight For What Is Right

I ran into constant roadblocks when I began my journey looking for properties to provide housing for homeless Veterans.  The issues I faced were the catalyst to me getting my real estate license, instead of contracting with a third party to represent me. I realized the full value of having my real estate license this week and exercised my ability to go effectively fight for what I believe in. 

At some point in the not too distant past I came to realize that none of the people I was working with believed in my mission, providing housing for Veterans, as much as I do. I realized that no one was going to fight for this as hard as I would; with the exception of my husband.  We sat by and watched as property after property we wanted went to other buyers.  We had deals fall through left and right due to technicalities that could have been avoided.  I was ill advised on the proper routes to take to successfully accomplish my mission.  In my experience, my agents operated in their best interest, instead of representing mine. 

We have been fighting for years, trying to negotiate business through a third party with sellers who do not follow the rules, only to realize after the fact that no one was really fighting for us at all.  We are finally in contract for a property for our Veterans that we refuse to lose, and the transaction has been going poorly at best.

I know with certainty that this was the week that this property would have been lost if I wasn’t representing myself.  But the great news is that I am.

My dad taught me a lot as a child, but there are a few lessons that stand out.  The first thing he taught my brother and me was that you never start a fight, but if someone else does you finish it.  As a kid I took that to mean; don’t punch your brother or he’ll knock you out.  I now realize, his advice applies to grown-ups too.  When you travel through central Reno and see one disgusting, disastrous property after the next, there’s a reason; were letting it happen.  I refuse to stand idle as one more property that could be put to good use exchanges hands into the ownership of another uninterested landlord; taking money out of our community and leaving trashy properties in their wake.  

Secondly, he taught me; if you can’t step around someone, you step over them.  This one used to seem a little harsh to me, but it now makes sense.  As soon as we turned up the heat on the sellers of this property to comply with simple contractual obligations, they started side stepping, making excuses, and shirking responsibility; taking on an “if we ignore them maybe they’ll go away” attitude.  This is where the transaction would have collapsed, but that’s not how we do business.   Having a direct line of contact with the sellers agent became a vital part of this transaction being executed successfully and if I weren’t representing myself I may not have had that option.

This situation takes a real estate professional into scary territory, opening them up to a lot of liability and risk.  I can understand why other professionals without a vested interest in my mission shied away from the fight, but I can say with certainty that I will not.  I have come to realize there are many people who don’t know what they don’t know when it comes to real estate transactions, and as such they are often misguided, given poor advice, and taken advantage of.  I am happy to be able to share my passion for real estate and the impact it has on people’s and the community’s lives with my clients. 

The Importance of Hiring a Professional

“It’s much easier to stay out of trouble now than to get out of trouble later.” Warren Buffett

In today’s DIY climate, there are countless opportunities for consumers to take business and personal matters on themselves without the help of professionals.  With in home tax software for personal and business taxes, who needs an accountant?  But, maybe you didn’t realize you qualify for a tax credit that will save you thousands, because you haven’t read the entire latest tax code and your accountant has. If you don’t consult with a tax professional to learn about it, you may never know about it.

Need to sell your home? Why not just throw a sign in the front yard and put an add up on Craigslist; houses are basically selling themselves in this market right? The reality is that in addition to listing your home for sale and facilitating the appropriate state mandated legal process to complete your real property sale properly, a REALTOR® can help you with so much more. They can guide you toward down payment assistance for your new home, professional photography, staging, curb appeal, marketing, moving resources, escrow assistance, and so much more. They can save you money by advising you on where you should spend your money before listing your house, and where you should not. If that doesn’t convince you, the National Association of REALTORS® reports that agent sold homes sell for an average of 18% more than for sale by owner homes.

When you hire a professional, that individual takes on the liability of your transaction and has the education and resources available to prevent potentially devastating mistakes. Many homeowners are not aware that there are federally required disclosures that must be filed when you sell a home. Failing to submit any one disclosure can come with fines up to $10,000. We all try to save money where we can, but when there is as much at stake as there is when you’re filing taxes, buying, or selling a home, it is important to truly understand what is at stake before you disregard the advise of professionals. A well trained and educated REALTOR® can help you avoid devastating and costly mistakes from becoming a part of your transaction.

It is also vitally important to consider the source of information you are relying on to make a decision.  As such, a REALTOR® is not a financial or tax-adviser and should not be considered a reliable resource to advise you on how to file your taxes.  Hiring the right professional for the job is the most important thing you can do to protect your financial future.

If you are considering buying or selling a home in northern NV consider supporting our business, Homeward Bound NV. All earnings we receive from our work representing you will be reinvested into housing for Veterans in the Reno metropolitan area. To find out more about our services contact us today by following this link:

Contact Homeward Bound NV

My First Hero; Why I Care So Much

I’ve shared a few stories now about why I’ve taken such an interest in the Veteran community on my website, and my blog.  The truth is, I would consider caring for Veterans part of the fabric that makes me who I am.  I was born into a family of Veterans; one of whom’s submarine arrived in Pearl Harbor the day the US entered WWII, and another who flew overseas in an era when Veterans were not valued the way they are today. When I was a child, my grandpa warned me never to marry a man in the military, but I did anyway.

When I was 14 my grandpa Charles, or “Pop” as I knew him, came to stay with us for the summer while his wife traveled to her native Whales.  I didn’t know it at the time, but I will be forever thankful for the time I got to spend with Pop that summer. This was a visit that would leave a lasting impression and photographic memory for me, and heavily impact the course of the rest of my life. 

Up until that visit, I knew my grandpa as a quirky outdoorsman. He was just a guy who attended the University of Nevada, Reno, right after high school; a fact I was unaware of when I decided to attend UNR myself. 

During his time at UNR he grew to love the slopes and remained an avid skier for the rest of his life.  He was a lover of wine and dogs; just like me. As an old dude, he got up unnecessarily early every single day and religiously made the same breakfast; a freshly grated potato for hashed browns, two eggs, and toast so hard even the dogs wouldn’t eat it.  He enjoyed wandering around the desert in Moab Utah, photographing the beauty of nature around him, then coming home and forcing everyone to watch slideshows of his photos during the holidays. 

You’d never catch Pop outside without his hat, unless he was removing it momentarily to balance a beer bottle on his head at lunch.  He carried his camera everywhere he went. He always made sure we got to enjoy some ice cream at the end of the day, and let us play in the mud when mom said not to.  He was the coolest; he was my hero.

Aside from his love for nature, dogs, and wine, what I believe he loved the most was jazz; listening to it and playing it.  There wasn’t a wind instrument he didn’t excel at playing, another trait we had in common, but he settled on the trumpet as a favorite and played in a Jazz band out of Santa Cruz for much of his adult life.  He would sit for hours, sometimes the entire day, and zone out to the tune of his favorites.

It was during one of these jam sessions while he was visiting that summer that I decided to sit with him for a time.  For some reason that day, he decided to open up to me; it was the one and only time I ever heard him speak of war.

Pop was a well decorated combat Veteran.  He had been awarded six times over for heroism and meritorious achievement while participating in aerial flight, and extraordinary heroism in action against an armed enemy.  He flew in WWII and the Korean war and went on before he retired to teach the next generation of Navy pilots out of Pensacola FL. 

Something in him wanted to talk about war that day, but not in the way I would have ever expected.  He spoke to me that day with a great deal of sadness in his eyes.  He reminisced of the exquisiteness of Asia in particular; their culture, the craftsmanship and superiority of their goods, the beauty of their people and their art.  He had collected a great deal of art while in Japan, which sadly was all lost with my mother’s home in the Paradise Camp Fire in 2018.  He got emotional talking about war, how it destroys the people who reluctantly become a part of it, both military members and citizens.

I had always known that my grandpa Pop was a war hero, but what I didn’t know about was the sadness he had carried with him for all those years.  I was too young to respond appropriately to him that day, but I figure maybe that’s why he chose me to confide in.  It wasn’t too long after this visit that Pop started to suffer severe complications of Alzheimer’s and Dementia, and we lost him before I finished high school.  As his mental health failed he clung to his jazz and his ice cream. I would like to hope the disease that took him from us helped him to forget some of the sadness that burdened him all those years. 

My grandpa was a very hard working and fortunate man.  He was intelligent and educated and had a successful career during and after his military service.  After retiring from the Navy as a Lieutenant Commander in 1963, he went on to work at Stanford Linear Accelerator and retired comfortably in Aptos CA. 

There are many Veterans that served long arduous careers and were unable to cope with the lasting effects of their war time wounds, both physical and mental.  Many Veterans from Pop’s generation and the next were alienated and ostracized for their participation in war, regardless the fact that many were not there voluntarily.  From my own research, I have come to find many of these Vets to be service resistant, meaning, they do not trust that governmental support services align with their best interests.  The system once rejected them, and they have not forgotten.  Some self-medicate with drugs and alcohol and fall into homelessness to support their addictions.  

I see a piece of my grandpa Pop in every Korean and Vietnam era Veteran I meet, and every part of me wants to help give them a glimpse of the amazing, dignified and accomplished life my grandpa led. They gave everything to make sure I had a safe place to call home, and now it’s my turn to do the same for them.

Thoughts About Independence on Independence Day

One of the first documented celebrations of the 4th of July occurred in 1778 when George Washington issued double rations of rum to all of his soldiers to mark the anniversary of our nation’s independence from England.  It was not until 1870 that the 4th of July was declared a national holiday.  

As you get ready to enjoy a day of BBQ and fireworks with friends and family on this 4th of July holiday, I hope you make time to reflect on what your independence means to you. 

What opportunities of independence have you been afforded, and with what sacrifices from others has that independence come?

When I think of what independence means to me, I think of the day I first left home and the day soon after that I realized I could go to the grocery store and buy, then eat, a whole cake if I wanted to. While I quickly realized the latter was an angle of independence that I was not interested in pursuing, I will never forget my first apartment and how proud of it I was. I loved the autonomy I had as an adult and I took immense pride in caring for and enjoying my newly acquired home.

When I think about my home today, I have the same feelings of pride and autonomy, but what I appreciate the most about my home is the feeling of safety for my children and my self, and the assurance of knowing I have a comfortable and clean place to retreat to at the end of the day, no matter what adversity I had earlier faced.

For some, the autonomy of adulthood meant the opportunity to leave home and join the armed forces. This was the case for a young friend of mine, Lance Cpl. Kyle Crowley. Kyle left home to join the Marines and gave his life in Iraq fighting for our freedoms and safety.

While many in our armed forces did not have the fortune of making it home, some individuals made it home only to face debilitating mental and physical challenges. Many of these individuals face homelessness today as a result of these wounds.

On this 4th of July, I ask you to please, reflect on the freedoms and safety that you enjoy today, and don’t forget that this freedom and safety has not come free.  Have an enjoyable and safe 4th of July.

Today is National PTSD Awareness Day

Post-traumatic Stress Disorder, or PTSD, is a psychological reaction to traumatic events that can be experienced by anyone who has been exposed to a life-threatening, violent, or dangerous situation. Common sufferers include combat Veterans and First Responders, who respond to help victims of traumatic events.

According to the Veterans Administration, PTSD is the leading contributing factor to nearly 40,000 American Veterans being without a roof over their heads.

PTSD is also a major contributing factor in suicides and substance abuse. VA statistics indicate that PTSD impacts 11% to 20% of Iraq and Afghanistan War Veterans, approximately 12% of Gulf War Veterans, and 15% of Vietnam Veterans.  In recent years there has been an increase in the number of homeless women who suffer from service related PTSD, whom are often accompanied in homelessness by their children.

It was not until the Forgotten Warrior Project in the 1970s that effort was directed into the identification and treatment of these invisible wounds.  For decades, PTSD was referred to as “shell shock” or “battle fatigue” and was dismissed as general anxiety.  The data from the Forgotten Warrior Project was crucial to the ultimate adoption of PTSD into the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders in 1980.

The growing acceptance and recognition of PTSD as a clinical diagnosis has led to many resources, including the VA’s Readjustment Counseling Service, for Veterans who suffer from PTSD and other service related mental health issues and traumas.

Additional resources for individuals suffering from service related traumas include:

The National Coalition for Homeless Veterans – a resource that provides emergency and supportive housing, food, health services, legal aid and case management support for homeless veterans

The National Alliance to End Homelessness – a non-partisan organization committed to preventing and ending homelessness which has an array of policy, data and program resources related to homelessness among veterans.

and The Disabled American Veteran’s Charitable Service Trust – an organization that promotes the development of supportive housing and necessary services to assist homeless Veterans to become productive, self-sufficient members of society.

If you encounter a homeless Veteran, or any other individual that you think may be affected by PTSD please, let them know that there is help, and guide them to the resources they may need.

For immediate help, call The National Suicide Prevention Lifeline: 1-800-273-8255

Veterans Crisis Line: 1-800-273-8255, press “1”

The Reno Sparks Real Estate Market Makes Finding Sustainable Housing a Challenge

An analysis completed by the Reno Gazette Journal indicates that with median home prices in Reno recently soaring to $420,500 and $352,100 in Sparks, an income of over $80,000 is required to secure a mortgage for the average single family home. 

According to the 2016 Census, the median income in Reno was $48,815, while the Bureau of Labor and Statistics reports an even lower number, $46,330.  On top of falling short of the annual income requirements, many would-be home buyers struggle to save for the required down payment, and according to the Reno Sparks Association of Realtors, ‘For Sale’ inventory is low.

When considering the average working population, the statistics look grim.  The market for housing is even more challenging for populations that are already struggling to make ends meet.  Thousands of Reno residents consider weekly motels their home, but these places are being bought and boarded up or torn down by investors in droves.  This reduction has created a lack of transitory housing, which has led to increases in nightly rent rates at the motels that remain. According to the Community Action Office of the Reno Police Department, hundreds of people are being priced out of these already insufficient residences into homelessness. In the case of Veterans, there are many programs that offer assistance; the VA, HUD-VASH, and Veterans Resource Center, to name a few.  A major contributing factor to Veteran homelessness is service resistance.

What that means is a lack of willingness to accept help for various reasons; feeling a loss of control and an unwillingness to give up personal possessions.  Another common source of service resistance is the refusal to give up a pet, usually a canine.

What is it going to take to solve this problem?

There are hundreds of hard working, caring individuals that are working every day to answer that question.  Where I believe it starts is with individuals who are willing to go out of their way and make it a priority to step up and help provide housing.  There are several philanthropists in town that have started buying properties with the intent to create dignified, sustainable housing for Veterans, but at this time, it is not enough.  This shortage is what has inspired me to do my part to improve our community by providing assistance through acquisition of dedicated multi-housing properties for these deserving Veterans.

What you can do to help, today.

If you see a homeless individual, please, engage them in conversation and educate them about the many services available to help them.  If they are a qualifying Veteran, there are even more resources available. Below is a list of several local contacts that can facilitate the help they need:

The Reno Police Department Community Action Office

U.S. Department of Housing and Urban Development-VA Supportive Housing (HUD-VASH) Program

Veterans Resource Center of America

Catholic Charities of Northern Nevada Crossroads