Veterans find it difficult to buy homes with VA loans in the Fresno hot housing market, which is a reflection of what is happening across the country.
In addition to competition from cash offers and conventional loans, veterans face obstacles created by misconceptions about VA loans.
However, veterans hoping to buy a home have a path to success. Real estate experts advise them to find an agent with veteran experience.
Veteran Fresno’s Long Battle for Home
Linda Cater, who served in the US Marine Corps 21 years ago, has been struggling since early January to find a home in Fresno.
Cater began looking for homes that were on the market, but said the agents she first worked with weren’t very helpful. She then teamed up with Beverly Grabel, a partner at Vylla Home Inc.
A robber who served in the army helps veterans buy houses. She helped Cater to place a bid on the house by contacting the seller and negotiating the cost of closing the deal, which was a significant win in this highly competitive market.
The cutter had never used a VA loan or owned a home before, but decided that with her mom and her eldest son moving home, they needed more space.
She moved to Fresno eight years ago with her two youngest children after experiencing hardships and becoming homeless. By using Facade, a 20-bed home located in Fresno that helps shelter homeless female military veterans and their children, she is back on her feet. She has worked for the organization for over five years.
Uncertainty about when the house will be ready to move in
Cater felt that she had little chance of buying a house after a few unsuccessful offers. Finding a home at an affordable price – $ 240,000 – was a difficult task.
Now that she has successfully found a home, she is struggling to close after residents continue to live in it, only to return home soon.
With her future home on escrow for over 90 days, Cater is now forced to pay a closing penalty until the current tenants move out.
She expected to move soon and was flexible throughout the process. However, since the moratorium on evictions has been extended until September 30, she does not know when she will be able to close the house.
“I don’t know anymore at this point, but looking at the market I have no choice,” Cater said. “In the long run, it will still be cheaper than in any other home – I’ll wait a few more weeks.”
VA Loans – Most Beneficial But Often Overlooked
For current and former military personnel like Cater, a VA Guaranteed Loan is the least expensive of the three most popular loan programs. It features low interest rates, no private mortgage insurance requirements and no down payment.
However, in the seller’s market, VA and FHA loans have little chance, Grabel says. Odds notwithstanding, new VA data from Veterans United show VA loans for Gen Z veterans – typically between the ages of 18 and 24 – grew 123% year over year. Millennials seeking VA loans for purchase grew 16% year over year.
VA loans are often the last choice compared to other loan programs, and this is in part due to misconceptions about them by many agents.
“A common misconception is that VA loans take forever and that they are about to fall out and that there will be valuation problems and this is no longer true,” – Kaitlin Turkovich, manager of Union Home Mortgage’s Las Vegas branch. – reported CNBC.
What loan programs are the most successful?
Dave Kidder, partner at Keller Williams Fresno Realty, says 10% to 15% of VA loans and 50% to 60% of FHA loans are accepted in a typical year. According to him, less than 5% of both loans are now accepted.
“Unfortunately, FHA and VA have not always been able to compete with conventional loans and cash,” Kidder said. “It breaks my heart when I hear about a situation where the only criterion is that they simply did not have money, and therefore they did not accept it or were afraid of being evaluated, both of these stereotypes in the market. it’s not necessarily true. “
The latest figures from the National Crime Survey show that VA loans had the lowest foreclosures in the United States.
After the COVID-19 pandemic Mortgage Bankers Association report shows that delinquency rates on all mortgages rose at the end of 2020, while FHA loans rose to a record 15.7% at the end of last year.
As of August, overall delinquency rates began to decline, but FHA delinquency rates remain higher than for any other mortgage.
Real Estate Agents Don’t Understand VA Loans
Nonprofit organizations such as the Veteran Real Estate Professionals Association (VAREP) focus on helping veterans acquire a home, but also help educate real estate professionals on what a VA loan is and how it works.
Bob Voss, board member of VAREP’s Fresno office, says that in many cases, agents know more about other loans than VA loans.
“If you are making an offer for a house and there is an agent who will represent the seller, he will present the offers to the seller, and then he will also be able to tell them:“ Okay, this is a cash offer, this is regular equipment, this is FHA, and this is VA ”- said Voss. “If the seller starts asking the real estate agent about the different types of loans again, they will have this stigmatism, the VA loan will likely take longer and more difficult to obtain. “
What can veterans do if they want a home?
“It’s all about being proactive,” says Grabel. She looks for prospective sellers who might be considering selling their homes before they even hit the market, and constantly reaches out to other agents and sellers with well-written letters of offer.
“The best thing veterans can do right now is to research the various loans available and be careful with the real estate agents they choose to help them buy a home,” Grabel said. “Because if they don’t know how to present their proposal, it will be difficult for them to get the proposal accepted.”
Fresno housing market is still trying to meet demand
Kidder says the Fresno market has seen a significant drop in affordable housing.
Until March of last year, there were over 2,200 homes on the market, compared to 650 homes available today.
Nearly 9,500 homes were sold in Fresno, Madera and Kern County over the year, and while agents still sold roughly the same number of homes, they had far fewer homes to sell, resulting in a spike in prices.