VA will allow homebuyers to pay agents — at least for now
Comments made by a Department of Veterans Affairs official Tuesday “ensures veterans have the same opportunity as others to compete in a tight housing market.”
VA mortgage rules currently prohibit homebuyers from paying their agent in any way — a significant issue in light of upcoming changes to cooperative compensation in the wake of the NAR settlement.
However, the Department of Veterans Affairs indicated this week that it will temporarily lift its ban on buyers paying for real estate representation, according to comments made by a VA official at a Mortgage Bankers Association conference in New York on May 21.
Why this matters: NAR and others had raised concerns that without a change, the rules would disadvantage veterans looking to buy homes. While sellers can still make offers of compensation to buyers, they will be less of a guarantee in real estate transactions. And under current VA rules, only the seller can pay the buyer agent.
What's next? The agency will lift the ban while it considers what lending rule changes are needed, according to comments made by Michelle Corridon, the VA's deputy director of policy.
What NAR had to say: "Without this change, thousands of veteran buyers could be denied access to professional representation in their pursuit of the American Dream of homeownership," said Shannon McGahn, NAR's chief advocacy officer.
"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."
What about other mortgage-related concerns? Fannie Mae and Freddie Mac, two major federal financial services corporations, affirmed last month that seller payment of buyer agent commissions will continue to be excluded from limits on seller concessions. And the Federal Housing Announcement made a similar announcement in March.