The Road Home and the Road to a Home: Real Estate and America’s Returning Troops
Veterans returning to the US in the coming months will need jobs, support, and homes for themselves and their families. We outlined the issues facing these individuals as they attempt to reintegrate and participate in the American economy in our Monday blog—specifically, our real estate economy. Today, we explore issues and support in the effort to make obtaining a home easier for America’s vets.
The Department of Veterans Affairs is perhaps the largest and best known support resource for military personale as they leave active duty. This department will have a pivotal role in insuring the country’s newest wave of veterans can qualify for loans and therefore achieve homeownership goals.
Eligible vets are awarded a basic entitlement of $36,000. The VA recognizes this amount won’t buy a much American real estate, and thus has established ancillary programs for additional help, as many veterans will need to seek additional loans in order to buy a home.
- Loan Guaranty Program
According to the VA’s own literature, the VA’s “Loan Guaranty” program does not impose a maximum amount that an eligible veteran may borrow. However, certain “high cost” counties incur “limits” which must be used to calculate VA’s maximum guaranty amount for a particular county. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2011 VA limit for the given county (for a table of counties and limits, go here). Therefore, a veteran with full entitlement may borrow up to the 2011 VA limit, and VA in turn will guarantee 25 percent of the loan amount.
Note though that the VA cannot guarantee an applicant will in fact get a loan. The VA can’t force a financial institution to accept an application, so in cases when the applicant is denied, the VA can only offer counseling and advice on seeking loans elsewhere.
- VA Homes for Sale
Though there is some sad irony in this program, we must also consider the VA practice of acquiring properties “as a result of foreclosures on VA-guaranteed and VA-financed loans” and then offering them for sale to other veterans as potentially helpful.
VA acquired properties are listed for sale at http://va.equator.com, through the MLS, and through local listing agents. Any vet interested in a VA-acquired property could, for instance, contact the ZipRealty agent of her/his choice for help in finding and purchasing one.
- Adaptive Housing
The goal of the Specially Adapted Housing grants is to provide a barrier-free living environment that affords veterans or service members a level of independent living they may not enjoy due to service-related injury.
Recently, The VA Loan Guaranty Service announced that Specially Adapted Housing grant amounts will remain unchanged in 2012 from what they were in 2011. Through this program, service members who have “specific service-connected disabilities may be entitled to a grant…..for the purpose of constructing an adapted home or modifying an existing home to meet their adaptive needs.”
Tighter Lending Restrictions May Dramatically Effect Vets
Obviously, with more and more mortgage loan denials, returning troops face a daunting challenge in qualifying for a loan, even with VA guaranty and special loan features such as no down payment required. While these aspects of VA loans are certainly helpful, banks that want several years of steady income (with prospects of the same to come), immaculate credit, and zero debt may not be satisfied with VA stipends. This could mean many of our returning military personal won’t meet new, stringent loan requirements.
PBS presented an outstanding, though disturbing piece on vets and lack of employment for them with the current economic downturn. Spotlighted were “three of more than two million Iraq and Afghanistan veterans.” Despite incentives to hire them, 11% were jobless as of March, 2011; for those aged 18 to 34, 14%.
Erik Vadalma served in Baghdad, left the Air Force in 2008. All he could find, a part-time gig at Ikea.
ERIK VADALMA, U.S. military veteran: I applied to maybe 100 jobs. I didn’t have enough money to make ends meet.
Debra Bain did a six-year hitch.
DEBRA BAIN, U.S. military veteran: You feel like you have lost who you are as a person, your value.
Edmond Sheffield worked as a military policeman while in the service. He got out in March of 2010, only to look for work for 18 months before signing on for an education program.
Here is where all of us can get involved. We don’t have to work at the VA to help our returning service members enjoy their part of the American Dream, a dream they’ve clearly earned the right to realize.
Those of us concerned that vets won’t be able to get jobs which will in turn help them afford homes should consider contacting our local legislators and urging them to pass the American Jobs Act. Or, if we are business owners, we might consider the words of Iraq veteran Paul Rieckhoff: “If folks want to support the troops and they want to support veterans, hire them.”