Virginia mortgages, housing needs increase as travel restrictions are lifted

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The pandemic-related travel restrictions have been lifted from most military sites, and this is catalyzing new lending needs in the Department of Veterans Affairs market as basic transfers resume.

Just a few months ago, more than half of all installations had restrictions when moving between bases. According to a report by the US Department of Defense, they were canceled by 207 out of 230, or 90%. VA lenders say there has been a relative spike in response to the ever-changing station assignments, bringing activity levels back to pre-pandemic levels.

This underscores the unique, additional source of demand that is opening up in the already fiercely competitive housing market that VA lenders should be looking for.

“Now that the military has reopened in the wake of COVID, we have a lot of people who are having a hard time finding affordable or middle-income housing,” said Anthony Powell, executive vice president of the mortgage arm of the American Armed Forces Mutual Aid Association.

AAFMAA Mortgage Services addresses this issue by providing VA loans that combine construction and ongoing financing into one closure resulting in earlier professional networking efforts aimed at stimulating housing construction. AMS plans to begin operations in Florida and then expand to other jurisdictions within the 28 states in which it is licensed. Through its networking efforts, it also provides military equipment buyers with $ 5,000 worth of upgrades at no additional cost.

Other lenders favor quick pre-approvals to provide borrowers with quick access to finance to help them bid on the resale market.

“A lot of people who work with PCSing want a home ready to move in,” said Sam Atapur, branch manager for Embrace Home Loans in Ashburn, VA.

In a sense, the home resale outlook has improved as more VA borrowers sell and bring new stock to the market, said Louise Thaxton, branch manager at Fairway Independent Mortgage Corp.

“There are people who are looking, but there are people who are selling. The good news is that after the travel ban is lifted, these soldiers, who have been in limbo for so long, can move on. If you are a military family, you have a home and you are going to give up PCS, it is very easy for you to sell, ”she said.

But, based on an informal survey of the company’s loan officers in consultation with the real estate agents they work with, Thaxton said stock shortages in new as well as resale homes have been a problem for VA borrowers in many markets she is familiar with, in part from – for a large increase in cost lumber and other building materials last year. In one case, a prospective buyer in the Colorado Springs area was forced to leave a builder after being told the timing of a new home would be delayed indefinitely until material prices fell, she said.

Another problem is the increasing frequency of the assessed value being lower than the value of the homes being purchased. In the broader market, some buyers are making up for the difference in cash, but this is generally out of reach for a VA borrower today, Thaxton said.

“They want you to literally pay more for the property than it is worth. Not many military personnel can pay this difference if they are on active duty, ”she said.

The extent to which this is a concern for military housing markets varies by region, with a hot area like Colorado Springs particularly challenging for VA borrowers due to valuation gaps. According to Thaxton, concerns may grow in Louisiana, but so far it is not so widespread there.

Thaxton affiliates have decided to cover lender closing costs for VA buyers to help them cope with what is an expensive and competitive housing market in many areas. Fairway allows but does not require its affiliates to offer it, she said.

“It could be $ 1,200 that the maintenance staff shouldn’t pay,” Thaxton said, noting that the lender’s closing costs can vary.

Adding such potential incentives means that the big picture that incumbent staff moving to a new installation must face today is deciding whether to literally invest in buying a home in a hot market rather than renting it, and Thaxton proposes to assess the gaps. in the assessment through this prism.

“Let’s say the property is valued at $ 190,000, and $ 200,000 was the price the seller wanted them to pay. If an active duty soldier’s family is going to sell this house in three years, they should see if they get the $ 10,000 back, ”she said.

There were several slight signs of a cold snap in the housing market but home prices continued to rise.

“If mortgage rates rise, the housing market could slow down, but I would say that at this point it looks like even if that happens, it will probably take 24 or 36 months before there is a buyers market,” Atapur said. “I think we’ll be stuck with this crazy inventory shortage for now.”



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