No More VA Loan Limit Cap or Seller Mandatory Fees

02/18/2016
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So the House has got the ball rolling on removing the VA loan limit cap and also dropping seller mandatory fees.  If this thing gets legs and makes it through the Senate, it could be a really nice modification to current VA loan guidelines.

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Comments
  • VA loans have a low default rate due to the independence of the appraisers involved in the loan. The appraisers are hired by the VA, not the mortgage company or an AMC, with no pressure to “hit the number” or fear losing further assignments. Even with nothing down VA borrowers are in a better LTV position than other borrowers with inflated appraisals

    David Donnelly February 18, 2016 6:01 am Reply
  • Good show Bryan… However… you never introduced your co host. I have to admit she is much easier on the eyes than you… keep up the good work !

    Ted February 18, 2016 6:14 pm Reply
  • Eric Kinneman I completely agree the seller will pick up the fees….after the contract has been accepted. In SoCal, there are still multiple offers on properties. When sellers have a choice of offers, as Brian pointed out, the seller will always choose the highest net offer. And why shouldn’t they? I am a DVBE/SB Broker owner. I fight like crazy to get my guy’s offers accepted. I am grateful I live and work in a community that supports our military.
    Our lenders are able to offer our Veterans a VA loan package that is at a slightly higher rate that absorbs the seller mandatory fee. This was a great compromise!
    But getting rid of the fees entirely would be amazing! Then Vets could receive competitive loan rates and be able to consider homes in our location (where the current $417K cap is often prohibitive).
    I am good with this. Our Vets need, at a minimum, an even playing field. This would actually give them the advantage they actually deserve.

    Lisa LeQuire February 19, 2016 6:38 am Reply
  • What Brian called “mandatory” fees actually used to be called “non-allowable” fees. These included escrow, underwriting, processing, admin, notary and pest inspection. The veteran borrower was not allowed to pay them. Typically, it would be the seller, lender and/or real estate agent who would pick them up. Today, those “non-allowable” costs can be paid by the buyer so long as they don’t exceed 1% of the loan amount. Many agents in my observation still believe that the seller has to pay them–and that puts the veteran at a competitive disadvantage.

    As a loan originator who does a fair amount of VA business, I have been able to counteract at least some of the sellers’ reluctance to accept a VA deal–I include a short fact sheet about VA loans along with my preapproval letter. I do appeal to the seller’s patriotism, as well–every little bit helps!

    Joe Parsons February 19, 2016 7:57 am Reply
  • What the VA and FHA have to do is stop having a list of only approved condos and manufactured home parks to get a loan in also. They need to stop banks from stopping loans to be approved in HOA’s just because there are to many rentals. I do not know if it the VA or the banks, but a nightmare from a loan officer in W.F. and its underwriting was asking for engineering data on how a manufactured home was tied down, how the supports were done, material and so forth, along with tons of paper work. To say the least, I got a bad rap from the buyer along with excuses from the loan officer, barbecue he did not get the VA loan for the manufactured home.

    Peter Dolci Jr February 21, 2016 4:34 am Reply

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