Lenders Step Up to Help Vets Buy Homes
Several campaigns this year are hoping to help members of the military become home owners, which has prompted Veterans Affairs loans to surge in popularity.
Reaching Out to Vets
Big banks and mortgage companies are stepping up efforts to help returning vets get affordable housing by advertising the benefits of VA loans as well as donating hundreds of homes mortgage-free to vets.
The Department of Veterans Affairs’ home loan program has soared to record levels, issuing new mortgages at more than double the pace of 2007. VA-backed mortgages represent about 7 percent of total home-purchase mortgage activity now, up from about 3 percent in 2011, according statistics from the Mortgage Bankers Association. VA-guaranteed mortgages come with zero down payment and flexible credit underwriting. The interest rates are competitive too.
There are an estimated 22 million vets nationwide, and many of them are eligible for VA loan benefits, say lenders.
“In an era of extremely tight credit and underwriting in most segments of the marketplace, the VA program looks like an extended hand for creditworthy vets who don’t have large amounts of money to put down on a home purchase or are transitioning into regular employment in the mainstream economy,” the Los Angeles Times notes.
Several lenders also are partnering with nonprofit groups to help vets break into home ownership. For example, Operation Homefront, the Military Warriors Support Foundation, HomeStrong USA, and Purple Heart Homes have been donating hundreds of homes acquired through donations from lending giants like Bank of America, JPMorgan Chase, Wells Fargo, U.S. Bank, and SunTrust Mortgage, among others. Bank of America alone has donated more than 1,500 homes to nonprofits that serve veterans. Builders are also joining in the mortgage-free donations. For example, Pulte Group has committed to build at least 20 homes that will be donated to wounded vets this year, mortgage-free.
Source: “VA, Lenders, and Nonprofits Mobilize to Help Veterans on the Home Front,” Los Angeles Times (Oct. 26, 2014)