Some Veterans Report Discrimination Using VA Loans

Some Veterans Report Discrimination Using VA Loans

Home loans backed by the Department of Veterans Affairs increased by 15% last year and are being utilized at record levels. However, veteran home buyers claim that they face discrimination when using VA loans.

Home loans through the VA are guaranteed by the government and enable veterans to purchase homes with little or no down payment. However, the veteran community says some sellers are closing their gates to them in this hot real estate market.

Mark Miller, a Navy veteran, noted that after the birth of his daughter, he decided it was time to begin searching for an actual home.
A VA home loan enabled his family to purchase their first home.

"There is no private mortgage insurance, which is a hefty amount of money, so that keeps my principal down," Miller said.      They were shut out of a lot of home buying opportunities, he said. One of our real estate agents told us, "You will find some people who will not even consider your VA loan." 

"Some homeowners will list their homes and say you can make a conventional or cash offer,” said Chris Birk, who works for Veterans United Home Loans. “That's it. Don't send me a VA offer."

Some sellers won't even look at VA home loans, Birk said. “There's a chance the veteran might not make it to closing with a zero-down mortgage. Or they'd need a lot of help," he added.

The VA loan closes at a comparable rate, Birk says. Over the last 90 days, 75% of VA loans closed, compared to 76.9% of conventional loans, according to a June 2021 report from ICE Mortgage Technology.  
Birk says some sellers also don't want to take the time to get a VA appraisal, which is meant to make sure the house is safe.

"With VA loans, it's assumed that the house has to be in pristine shape. If a handrail has to be put on the back deck, or the paint on the outside of an older house is flaking, that's automatically going to kill the deal," Birk said. “I don't think that's true, either."

Despite these challenges, the VA home loan program has backed a record number of loans for home purchases in 2021 with 1.4 million loan applications.

There is going to be more available on the market. There will be something you like or at least something you'll be able to find, Miller said.