One of the most rewarding aspects of my career has been helping families achieve the dream of homeownership. Yet despite significant advances in mortgage lending, one obstacle continues to surface far too often: outdated misconceptions about VA loans.
Recently, I watched a highly qualified buyer lose out on a home simply because he intended to use VA financing. This borrower was a Lieutenant Commander in the U.S. Navy with a credit score above 780 and debt-to-income ratios well within lending guidelines. By every traditional measure, he was an exceptionally strong candidate. However, the seller and listing agent rejected his offer solely because it was backed by a VA loan.
Unfortunately, this scenario is not uncommon.
The Department of Veterans Affairs loan program remains one of the most misunderstood financing options in residential real estate. While many of the concerns surrounding VA loans may have contained some truth decades ago, today’s program has evolved considerably and often competes favorably with conventional financing.
-
Myth #1: VA Loans Require Homes to Be Perfect
Recent updates to the VA’s Minimum Property Requirements have aligned them much more closely with conventional lending standards. Most properties that encounter issues involve significant safety concerns or substantial deferred maintenance conditions that would likely affect any financed transaction. In many cases, repairs can be addressed through escrow holdbacks or renovation financing.
-
Myth #2: VA Appraisals Are Difficult
In reality, VA appraisals often provide additional protections for all parties. Through the VA’s Tidewater Initiative, appraisers notify parties when a property appears likely to appraise below the contract price before issuing a final value. This gives agents and lenders an opportunity to provide additional market data and comparable sales, helping preserve transactions that might otherwise be lost.
-
Myth #3: VA Loans Take Longer to Close
The speed of a transaction is determined far more by preparation and execution than by the loan program itself. A well-managed VA loan can close just as quickly as a conventional mortgage when all parties are responsive and documentation is complete.
-
Myth #4: Sellers Must Pay Excessive Closing Costs
This concern is largely outdated. While VA guidelines limit certain fees charged directly to veterans, experienced lenders routinely structure transactions that comply with VA requirements without significantly affecting seller proceeds. Many VA buyers submit offers with little or no request for seller concessions.
-
Myth #5: VA Loans Are More Likely to Fall Through
VA borrowers often represent some of the most financially disciplined buyers in the marketplace. Combined with comprehensive underwriting standards and the flexibility of the VA program, these loans perform exceptionally well and frequently compare favorably with conventional financing.
The Bottom Line
Sellers should not be asking, “What type of loan is this?” Instead, they should ask, “How strong is the buyer, and how capable is the lender?”
When backed by a qualified veteran and an experienced lending team, a VA-financed offer should be viewed as a competitive and dependable path to closing. Veterans have earned these benefits through their service to our country. Evaluating their offers based on facts rather than outdated myths benefits veterans, sellers, and the housing market alike. Not to mention that VA Rates, in many cases, are notably lower than Conventional mortgage rates and due to recent changes can also close in two weeks or less time.
Thank you Veterans for all you have done for our Country and God Bless America!!!
DC Aiken is Senior Vice President of Lending for CrossCountry Mortgage, NMLS # 658790. For more insights, you can subscribe to his newsletter at dcaiken.com.
The opinions expressed within this article may not reflect the opinions or views of CrossCountry Mortgage, LLC or its affiliates.
CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans.