ORANGE COUNTY, Fla. — A special benefit created to save military veterans big money when buying a home isn't getting used as much as one might expect.
One local veteran told Channel 9's Nancy Alvarez about the obstacles she encountered in using her VA loan. Alvarez looked into the federally backed process to figure out what was chasing sellers away.
Brittany Chaney is a single mother and Navy veteran who wants to use a VA loan to buy a new home. But Chaney applying for the VA loan is a time hassle.
“It's gonna be time consuming. It's not going to be easy, you're going to be disappointed,” Chaney said.
VA appraisers follow what's called, "Safety, soundness and sanitation" guidelines that go way beyond what's required for conventional loans, and even the federally backed FHA loans.
Examples include a home's roof, which has to be within its useful life or must be replaced or repaired. Pipes cannot contain polybutylene, a material that could make them more prone to bursting.
VA inspectors are also required to report even the smallest amount of evidence of dry rot, termite or pest-control problems.
"The inspection process and appraisal process is more stringent to protect the veteran," said Keith Jackson, education director for Veterans Association of Real Estate Professionals, or VAREP and said it's not uncommon for some realtors to steer their clients away from VA loans.
Jackson told Eyewitness News that his group's analysis of the local real estate market shows another layer to the problem. In Orlando, more than 75 percent of the condos on the market right now won't accept a VA loan...
“It's a seller’s market, so they may have multiple offers and they may say, ‘I don't want to deal with a VA loan because the transaction time will be longer or my house is not in a condition that will pass a VA inspection.’ so they say, “Hey, I’d rather not deal with that,’” Jackson said.
Jackson said the fix is education and clearing up the misconception that VA loans are too much of a hassle.
Chaney told Eyewitness News that she has no plans on giving up on her VA loan.
“I earned these benefits. It's not like we feel it’s owed to us, but why would you spend the extra money if you could save it?” Chaney said.
Jackson said that at this time, the VA has no plans to loosen the requirements for the loans, even though it appears sellers tend to stay away from them, nationwide.
· In Orlando, there are 3,392 properties available (this includes townhouses, single family and condos)
· In Orlando, there are 752 condos available
· Of those 752 condos, only 57 accept the VA home loan
That means 13.19% of condos accept the VA Home Loan.
Data: Sourced from My Florida Regional Multiple Listing Service.
Economists say that when real estate inventory is at a 6 month supply there is no advantage to the buyer or seller side during negotiation. Inventory falling below 6 months signals a sellers’ market and a disadvantage to the buyer or veteran in this case. The Orlando market is currently at 3.08 months’ worth of inventory. The other issue is the actual VA discrimination in that the majority of sellers are not accepting VA loans. I broke each County out with their months’ of supply and the percentage that are accepting VA loans:
Osceola County (Includes all properties Townhouse, condo and single family)
4.97 months of inventory
33% of sellers will accept the VA home loan
Orange County (Includes all properties Townhouse, condo and single family)
3.18 months of inventory
37% of sellers will accept the VA home loan
Seminole County (Includes all properties Townhouse, condo and single family)
2.23 months of inventory
42% of sellers will accept the VA home loan
Lake County (Includes all properties Townhouse, condo and single family)
3.88 months of inventory
48% of sellers will accept the VA home loan
For a closer look at the group's findings and for information on an upcoming summit for vets, click here.
Cox Media Group
