The Department of Veterans Affairs (VA) has announced a temporary policy change allowing VA home buyers to directly compensate their real estate agents. This significant shift, potentially leading to a formal rulemaking process, is a substantial relief for VA home buyers. The National Association of REALTORS® (NAR) has been vigorously advocating for this change, highlighting the importance of professional representation in the home buying process.
Background and Advocacy Efforts
Earlier this year, NAR launched a comprehensive effort to address the department’s previous rule, which barred VA borrowers from paying brokerage fees or commissions for real estate services. This old rule posed a potential hardship for VA buyers, as highlighted in NAR’s proposed settlement agreement. With the new temporary policy, eligible veterans, active-duty service members, and surviving spouses can now use their VA home loan benefits to pay for certain real estate buyer broker fees when purchasing a home. This update aims to ensure that VA programs continue to promote homeownership access for veterans.
Ensuring Equal Opportunity
Housing for veterans is a top priority for NAR. “NAR launched an all-hands advocacy effort on this issue, meeting with VA officials, engaging with lawmakers, and rallying our industry partners to lift this prohibition,” says NAR Chief Advocacy Officer Shannon McGahn. “Without this change, thousands of veteran buyers could be denied access to professional representation in their pursuit of the American Dream of homeownership. Taking this extra step ensures veterans have the same opportunity as others to compete in a tight housing market. We applaud the VA for recognizing this danger and acting swiftly to protect veterans.”
Benefits of the VA Home Loan Guaranty Program
The VA home loan guaranty program is a vital tool that provides military veterans with an affordable and accessible method of purchasing homes with no down payment. It’s the only program that explicitly banned buyers from directly paying for professional real estate representation. NAR President Kevin Sears stated, “We applaud the VA for revising this policy and allowing veterans and active-duty service members the same advantages as other buyers in a competitive real estate market. We look forward to continuing this conversation, and our 1.5 million members stand ready to support the VA in whatever way possible to protect the brave men and women who serve this country and ensure they are given the equal opportunity to achieve the American Dream of homeownership.”
Moving Forward
As the policy changes take effect on August 17, the VA and NAR will continue to monitor the evolving home buying market and provide updates as needed. The VA encourages veterans to negotiate buyer broker fees with their real estate professional and reminds them that they can still ask sellers to cover the buyer broker’s compensation at closing. This proactive step by the VA underscores its commitment to supporting veterans and ensuring they have the resources needed to secure homeownership.