The housing market in Pierce County has marched forward with a huge 11 percent value increase from last year. Unfortunately, it’s left behind too many members of a demographic we like to believe is exceptionally valued: U.S. military veterans.
As reported this month by News Tribune staff writer Kate Martin, veterans currently have a difficult time using their government- backed financing to purchase a home, a benefit they earned serving our country while stationed at JBLM or elsewhere.
When home sellers and agents see the words “VA loan,” they instantly think hassle, leaving vets at a clear disadvantage in this frenzied housing market.
There’s nothing wrong with a VA loan — money is money — but government-sponsored financing has earned the reputation for being sluggish and cumbersome. And a housing market this hot won’t wait.
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Most sellers in Pierce County can expect multiple offers quickly and electronically within a few days. Houses here have had offers in less than 90 minutes sight unseen; naturally, waiting 90 days for a VA appraisal and financing works against a lot of hopeful vets.
According to Realtor Mike Handy of Windermere Professional Partners of Tacoma, VA loans typically require two to three more underwriting steps than a conventional loan, and VA appraisers are known to have stricter standards.
With a conventional loan, especially one that includes a 15 to 20 percent down payment, there’s wiggle room for negotiation. Parties don’t have to haggle over drainspouts or chipped paint before financing gets approved.
It’s no wonder the government-sponsored financing has fallen into disfavor with both sellers and agents.
We’re not advocating that underwriting standards fall, but the VA should self-correct and help potential buyers by speeding up the appraisal process. The VA could also work closer with agents and brokers to get out the message that its loans can close in a timely manner.
Even when veterans try to sweeten the deal by offering more than the asking price, they still get turned down because of the old reputation a VA loan carries.
“We live in a community that’s full of military presence. Somehow we have to do a better job,” Windermere Realtor Jim Swanson told Martin, speaking truth to powerful housing market forces.
To reduce the backlog of unprocessed loans, the VA has taken steps such as increasing what it pays appraisers. Efforts like this must continue, what with Washington’s large population of service members — the 6th highest concentration in the U.S.
Of course, would-be buyers can try to take matters into their own hands. They can write letters asking a seller to consider their years in the armed forces; they can promise to protect their home as they protected their country, and that their military discipline and vigilance will benefit the neighborhood.
Appealing to a seller’s sense of patriotism can’t hurt, though after such sacrifice, a veteran shouldn’t have to plead for consideration.
The beauty and familiarity of Pierce County have lured thousands of active-duty men and women to settle down or retire here. They hope to build a nest egg after a nomadic career of living on base or renting. As financial experts preach, a delay in homeownership is a delay in wealth building.
Congress established the VA loan in 1944 to give vets returning from World War ll a piece of the American dream. It’s disappointing that in Pierce County, where one in five buyers use VA financing, the dream of homeownership for some is getting farther out of reach.