In March, the National Association of REALTORS® (NAR) reached a settlement in a class-action lawsuit that requires NAR to change its brokerage fee rules. This could result in changes to the real estate market. Before that settlement takes effect, VA has announced an update to help ensure that Veterans using the VA-guaranteed home loan benefit remain competitive buyers. Specifically, eligible Veterans, active duty service members and surviving spouses who use their VA home loan benefits can pay for certain real estate buyer-broker fees when purchasing a home beginning Aug. 10, 2024. This update is intended to ensure VA’s programs continue to promote access to homeownership for Veterans.
What is the impact of this settlement?
The full impact of the settlement is not yet certain because the real estate market is still adjusting, but there may be an increased expectation that home buyers will pay for their own buyer-broker fees. In VA’s program, it has been common practice for sellers to pay for the Veteran’s buyer-broker fees.
Why does this potential change matter for Veterans using the VA-guaranteed home loan benefit?
Previously, Veterans could not pay buyer-broker fees when purchasing a home with a VA home loan. In light of the settlement, Veterans could be at a disadvantage in the evolving homebuying market, so VA released this update to make sure that Veterans remain competitive buyers.
What does this mean for you?
Simply put: Veterans using VA home loan benefits can still negotiate and may pay for their real estate professional’s commission (i.e., the buyer-broker fee), beginning Aug. 10, 2024, subject to certain safeguards. VA encourages Veterans to seek out the services of mortgage lending and real estate professionals who have experience with the VA home loan program to ensure they are familiar with the specifics of compensation negotiations and the impact of the settlement on home purchase contracts.
Should you negotiate these fees?
VA encourages Veterans to negotiate buyer-broker fees with their real estate professional. Veterans can also still ask sellers to cover the buyer-broker fees at closing. In addition to other safeguards, all buyer-broker fees charged to Veterans using the home loan benefit must be reasonable and customary within local markets.
Will there be future updates?
The full impact of the settlement on the real estate market is yet to be determined. The temporary measures announced today will help ensure that Veterans are not negatively impacted by the class-action settlement. VA will continue to monitor how the settlement affects the brokerage market, as well as new models of realtor commissions that may emerge, and do what it can to help lower costs, boost competition and increase avenues to home ownership. VA looks forward to pursuing a rulemaking. Rest assured: VA will do everything in its power to make sure Veterans are not disadvantaged in the homebuying process.
For additional information about this update, please visit Circulars: Calendar Years 2021 to Present – VA Home Loans.
*This news post was updated on June 12, 2024, to include the effective date of this change.
Topics in this story
More Stories
An important part of financial planning is life insurance, which VA offers through a variety of whole life programs to Veterans, service members and their families.
DOD has updated installation access procedures for Veterans. New process makes entering military bases and using services easier.
This 2024 Veterans Day discounts list will continue to be updated as we learn of more nationally available Veterans Day discounts, meals or other ways businesses and organizations want to give back to Veterans.
What about Veterans with low credit? I’ve been homeless for years now struggling with PTSD, Substance use, Homelessness all the above yet I have the Home Loan benefit. The max.
Sadly enough everytime Ive pursued buying a home I end up with the lender regretfully informing me that my credit score is few points shy of standard 600 I’m regretfully informed that there’s nothing that can be done at that point. So here goes the Vicious cycle all over again!!
Then how can the VA ensure a zero down payment on a home for a veteran using the VA loan? This is going to put more veterans on the street eventually.
Some of us did 2 or 3 tours of duty for our country. My grandfather, WWII veteran got a house paid for with COE. My whole point is veteran should get a house at no cost. That COE speaks more volume than ever. NO VETERAN SHOULD BE HOMELESS.
I agree with 99% of the previous comments!
We need to contact our reps and senators!
I bought my first VA home that was a 4 plex from the owner. I used their lawyer and the mortgage company did the rest. i got into it with $1400 cash that was for appraisal, title search and title insurance, etc. no fees!!! The interest rate was 10% but the price was $10 and it is still a four plex but it’s 10x more in price in that small town. The listing broker today would make $18,000 to do what the owner and I did! $18,000 to sign a contract and send someone to pick up the check at closing! There is no competition in this home buying industry only skimmers. The seller gets the money and gives it to the broker but … the money comes from the buyer! in an inflated price for the seller and broker! The for sale by owner business should boom in the wake of these lawsuits! DIY Home Sellers & Buyers! You could pick up a kit at your local big box hardware store!
Home buyers and sellers Unite! If vehicle buyers and sellers can transact online why not home sellers and buyers??
I never even heard of a buyer broker fee. I will not use an agent at all. The commission is normally placed on the seller side on the sale of house. And that has always been able to be negotiated although some may tell you different. This makes no sense. Talk to an atty.
I’m no lawyer but do Not like this at all. Appears to put the realtors fees completely on the vets shoulders.
The VA home loan hasn’t been competitive for more than a decade. When reviewing offers the real estate professionals place the VA home loan offers at the bottom of the pile. VA home loans are not practical in this inflated environment. The govt is directly responsible for inflated home prices through the financing of their ever growing budgets-financed increasingly with property taxes. This has decimated the middle class in the past 25 years. This article is completely tone def.
this is not a win for a veteran trying to purchase a home.
If you really want to help, waive the Broker fee or make it 1.5% Max.
Another perk for the Realtors to take more money for little effort! In the past the Vets could just say they were not allowed to pay for this fee; now that excuse will be mute. The majority of homes Vets purchase are well below $500,000.00. The Realtor does very little to deserve the 3% fee ($15,000.00). Come August I can see several Buyer-Broker fees added to the closing! Thanks for nothing! BTW, I am a former Realtor & Broker so the Realtors do not need to waste time by blowing smoke!
I mistakenly used USAA for my 0 down mortgage and got my approval letter. After seller approval of my offer, USAA said I needed $50,000 down to qualify.
I have done business with USAA for 15 years and have found that in actuality they do very to nothing veterans, which is not what they would make you believe. To me they are absolutely no different than the other big banks and insurance companies. They do say: “thank you for your service” when you call them though, lol………………….
It’s good to see the VA be proactive with this far reaching settlement and provide guidance for veteran buyers.
Sellers in California generally have always paid the agent fees of both buyer and seller agents. This move costs veterans more money out of pocket. Its stupid and ridiculus. I bought and sold 4 homes using my veteran VA loan benefit and there’s never been an issue. Non-veterans don’t pay broker fees as the buyer, why should they? All they have to do is call the listing agent of the home they want to make an offer on and let them carry the load for both buyer and seller and earn whatever the seller is willing to pay (what they agreed upon). This is another political move to rip veterans off. It probably was thought up by the National Reators Association after they got their asses kicked in court so they can at least retain buyers fees from vets. Nobody needs a real estate agent or broker. Everything can be done in escrow. The VA and Realtor board are now in bed together trying to squeeze money out of veterans. Agents don’t do anything anyway. Pay them minimum wage to fill out a few papers and send them to escrow. All the agents are worried about is money, money, money. How else can a high school drop out take a weekend course and start making $6000 per $100,000 in home price? They’re worthless, just ask the courts.
ok, is this only in USA? some of the cost are different and much higher in Europe…. but rental
are assisted living facalitiy includer?
Great news. Maybe someday soon myself and my battlebuddies who retired overseas may see international VA loan support as well.
Where did you guys retire?
I’m elated with the steps the VA is taking to care for all Veterans that desire home ownership! If the seller isn’t assisting with the buyer broker fee then it will definitely be the buyer. Some sellers not wanting to deal with government backed loans is not a new phenomenal. Sellers feel the same about FHA loans. There is still a great deal of unknown that is lurking as the Real Estate Industry adjusts. Continue to make necessary adjustments VA that will benefit the Veteran community.
Most Veteran down have that kind of money for a down payment…. You know, I don’t no this country is coming too. We put our life defending this country. Does that mean anything. I guess not. The Realtor should be honor to help for free. Yes not just the VA but the government should be helping too. The government can give billons of dollars together countries, but they can’t help there Veterans. All but I can say some of the politician should be ashamed of themselves just look how much money they are making, but ain’t doing “SH-T” for the veterans. It’s all about how much money they can make. Everybody promise everything until they get elected, the SH-T goes away. Here is a prime example, we are building a wall an Mexico is paying for it, that’s a lot of “SH-T”.
I am so grateful that the VA takes care of us. Proactively and consistently.
I really don’t see how this article is providing good news for veterans staying competitive in this terrible housing market right now.
So we veterans are encouraged to negotiate realtor closing fees and commission, yet there is no written policy that garuntees the fees won’t be unfairly proportioned towards the veteran?
Then there is that part that the VA will continue to monitor the situation?
What this article really did was emphasize that veterans have actually lost home buying competitiveness and that we are waiting on some type of intervention to make home buying attainable again.
Agreed. Thank you for making this point. The VA home loan is not competitive at all.
The big problem is the Closing costs,why would U have 0 down payment, and 8 to 12 ,000in closing costs, and if the Vets don’t Use all of their approved amount, why can’t they roll the remaining to pay Closing costs, Congress needs to change that RULE ?
US Veteran services, in reagards to Legal concerns
The big problem is the closing costs, why would U have 0 down payment, but 12to8,000 in closing, and if the Vets don’t Use all of their approval, they can’t use the remaining amount for credit to closing costs We need to have Congress to change that RULE
Maybe some VA SES can help out with some of that bonus money they got.
This bulletin is very well written, and that is much appreciated! Great job communicating what is usually a complex bit of information!
Thank you!
Im in Puerto Rico and want to buy a house, i have no experience and dont know how to start. What can I do and with who should I communicate first?
Go see a banker that is familiar with the VA loan process. They should be able to get you your VA certificate of eligibility and help you process your loan. Most banks will give veterans lower interest when applying for a VA loan. Check with two or three banks and remember, the bank will do a hard credit check which will lower your credit score a little. The good news is, you have 14 days to apply for a home loan with as many banks as possible without it affecting your credit score again.
good afternoon melanie, I am also here on the island on the west coast in particular in Isabela, check this website one of our fellow veterans forwarded to me, VRM Properties, it is part of the portfolio of real estate properties- The Department of Veterans Affairs (VA) acquires properties as a result of terminations on VA-guaranteed and VA-financed loans. These acquired properties are marketed for sale through a property management services contract that was recently awarded to Vendor Resource Management (VRM).
The properties are listed by local listing agents through local Multi Listing Service (MLS). Properties for sale may also be viewed at https://www.vrmproperties.com/. If you are interested in buying a VA-acquired property when it is listed for sale by Vendor Resource Management, please contact a local real estate broker of your choice to see the property.
miss colondres, check out VRM Properties, it is used by some of our veterans here on the island, take a look everyday and see the inventory.
To help vet to buy a home it would be get if you could add broker or non reoccurring fees, as well as nonoccurring fees
Making a veteran pay more money to purchase a home is a benefit?
The catch word in anything to do with Realtor fees is “Negotiable” which generally most Realtors and office claim they are, but in most cases they really are not and the supposedly negotiated Fee is what the RE Industry wants and not what the customer wants.
hello. am I still able at 71 yrs of age obtain a v a loan…?
Yes, my 84 year old uncle just bought his first home with his VA loan. Good luck to you.
Yes… if you have the proper service connection disability… Sir!
I just finished buying a home. I didn’t know about the 3.3% for a zero downpayment funding fee. I scraped together the 10%, making the loan fee only 1.25%, saving me $200,000 over the life of the loan. That’s not a bargain. If I had been a disabled vet, the fee would have been zero. The sole benefit was that I could get a lower interest rate if I used the “free rate,” meaning there would be no additional monies at closing. In the end, I’m not sure using the VA Loan was the right move for me.
I would like to know why you cannot recast a VA loan ? If I buy a house with a VA loan , sell my other house months later, why in the world can’t I use the money to recast the loan ???
I was recently pre-approved for $350k to buy a home in MS, instead, I’ve decided to build one and qualified for $335k in a construction loan at 8% interest, I wonder what kind of “shock” I’ll be looking at in Oct 2024 when it’s finished and time to flip to a VA home loan?
Why can’t the VA do something along the line of the HECM loan. Maybe to make it affordable for older vet give a reduction in the amount the vet has to pay to be able to buy a home the meets their aging needs. My husband and I are both Air Force vets but we don’t get benefits for 2, we only get benefits for 1 so usually I get left out of many benefits. Both of us are over 72, both of us are disabled, both of us use walkers now which is not practical to go in and out of most homes. So we made arrangements to use my Husbands VA Loan certificate, but I get nothing to help with the amount of the loan we need. We found a home with NO steps to get outside or garage of the new house, doors are all 36” wide, hallways are wider also, so our walkers fit. But a HECM requires a 60% down payment and we can’t afford that so we go conventional. Husband is 90% disabled and currently I am 40%.
I don’t have a Coe so that leaves me with a big disadvantage
I am a veteran, Realtor, and a Certified Military Relocation Professional (MRP). The NAR and VA are simply playing CYA games and capitulating. They claim it is for the benefit of the veteran… but is it really? During this 6-month moratorium, trial balloon, experimental period, why not simply waive or reduce the funding fee, and just like said funding fee, allow the veteran borrower to include the buyer-broker commission outside and on top of the sales price amount. In other words, allow them to roll said commissions into the loan without regards to the sales price or appraised value? I work with many veterans and active duty service members who utilize the VA loan program and the majority do not have the normally needed funds (~3.0% closing costs) on hand to be competitive in the marketplace, much less adding another ~2.5%-3.0% or whatever the buyer-broker commissions are. Therefore, this will put many of them at a disadvantage since no one can work for free, and they must be able to remain competitive. But hey, that’s my two cents worth from someone who sells roughly 100 properties a year, but no one seemed to ask us in the field about how things really are. One thing for certain, I will continue to serve this wonderful community and my brothers and sisters with their real estate needs, regardless of how hard the overlords make it!
You’re in Southern California
Thank you.
They say no money down but as a 100% disabled combat veteran you need 20% down to be competitive. It took me 20 bids and 5 months to find a house. No one wants to accept a VA loan period. The only way they will is if you have appraisal contingency which takes 15-20k and if you pay all costs which is 10k and put a deposit down of at least 20k. So you need 40-50k just to play the game. Trust me I was surprised at that also. I was made to believe 0 down but in reality it takes a fortune. You will not be competitive unless you forgo any inspections. It’s hard to compete in a market that people are paying all cash and overbidding houses by 50-100k. No sellers want the headache of a government backed loan. The VA loan in itself makes you less competitive. It’s sad because that was one of the big reasons that enticed me to signing up. Another promise they failed to uphold.
This may have been true in the prior pandemic driven market, but is not true anymore in my local market.
Thanks for the helpful information and thanks for sharing your “real world” experience. What state were house hunting in?
I disagree, the VA loan (process/funding as well as rates) have helped my family a ton. We have 2 homes under VA loans. While I agree that you need to have funds for closing and/or down payment, the rates are a no brainer and there are no funding fees if you even have 10% disability. You might need to work with a better lender that will help you explore your options. You are correct in saying that the days of 0 down are pretty much gone, this is something my children will soon have to face. The bigger problem in this country is the lack of education on finances overall. Teaching out children to save/invest/build credit at a young age so they can have financial success. All this country wants to do is throw credit card adds into your spam box and mail so you can accrue mountains of debt; the buy now pay later philosophy that keeps the poor broke and the rich, rich! Something else to consider (we’ve done this) buy small (live in/rent out or flip) then buy bigger. We were blessed to start investing into property at a young age, too many try to buy their 1st home late in life (after their service) again this boils down to lack of education, financial advise. Good luck to all & GOD bless!
We already know that we can negotiate. We need higher entitlement limits and decrease the funding fees. VA has to keep in mind closing costs are also a big part of what is payed for when buying a house . I bought my house in 2021 when there were bidding wars and had a bad experienced getting a buyer to take my offer until I offered 25k over asking. The VA Loan process made me feel extremely vulnerable as a first time buyer. Yeah it has its perks but now days other company’s are started starting to come out with 1% down to gain future clients.
Won’t do a thing for those single veterans who will simply NEVER be able to use this service. Some of us joined the Army JUST to buy a home, and since I’m a single father, I’ll just, never be a competitive buyer. The only help the VA has given was to tell me it would be “Easier if I was married”. Sure wish I could have put such restrictions on my service to the nation.
So you want the Army/VA to provide you a wife? Honestly, this doesn’t sound like the Army’s or the VA’s fault.
I am a retired Marine and a Realtor. This is a step in the right direction, but falls far short of actually being helpful for Veterans. If you read the circular, says that the buyer broker charges cannot be included in the loan amount. That makes this “allowance” all but completely worthless for the Veteran, and keeps them at a disadvantage. The benefit of the VA entitlement is that it allows the Veteran to purchase with no money down… While they remain 100% negotiable, Buyer Agent commissions are usually 2-3% here in Hawaii. This becomes an out of pocket expense for a Veteran Buyer who is not allowed to roll the commission into the loan. Allowing Veterans to pay is important, equally important is allowing the commission to be part of the loan (as it always has in the past – It’s just been shown on the closing disclosure as a seller concession vice a buyer concession).
Thank you, this is a big issue for NW FL.
I am a hard working retired veteran that happens to be married to a realtor.
This is horrible for the veteran!
A veteran has always had the ability to pay more out of pocket in order to buy that one house they simply must have. This just pretty much guarantees it.
Now, because the NAR has changed the rules, you can stay in competition to buy a home using your VA loan, but you will likely have to pay substantially more out of pocket.
Lucky us… VA has enabled us to pay realtor fees that you were not allowed to pay before. These are fees that typically amount to 3% of the home purchase price ($3k for every $100k you buy for, not the financed amount)… This is one side of the deal. Seller pays the other typical 3% still, but used to pay all 6% for VA loans. Those percentages can vary, but are not significantly different.
The National Association of Realtors (NAR) didn’t even solicit their own membership when they changed their rules. They did so to keep from being sued (class action lawsuit) to protect themselves and their financial interests.
Buyer/seller agreements have always driven who realtors will show houses to. NAR’s change to the structuring of this “for profit” agreement leveraged VA loan rules to force VA to act or potentially leave veterans without the use of a VA loan (our benefit). The VA has responded by capitulating to NAR to allow you to pay more money.
The VA needs to step up and protect the veterans financially and revise their rules to benefit the veteran (not back the NAR).
In many locations a VA loan client isn’t even considered a good buyer prospect because there are rules to protect the veteran that make sellers do things they don’t want to do. So to get a bigger $$$, faster sale of a house they look down on VA loans as viable prospects. How about proposing some anti discrimination legislation to require the NAR to prioritize VA loans homebuyers?
VA, please help us… This current change of rules is not help. It simply further erodes our benefits and will definitely be leveraged by greedy people to take more money from us for the same benefit. Our younger generation of veterans are already financially challenged to buy a home, and few are experienced enough to recognize a mislead when someone tells them they are responsible for paying a buyer fee. “Just sign here, cause you don’t want to miss out”.
Consider reverting your change and allowing a painful realtor/broker case by case exception for the hardcore realtor/brokers that have our uninformed veteran dancing on a hook maybe?
You’re thinking in a vacuum. Once the changes are rolled out from the NAR settlement, the MLS listing must state the maximum amount the buyer’s agent may earn from the listing agent. If that amount is $0 and the VA prohibits you, the buyer, from paying the agent, how does your agent get paid? Without any buyer compensation, the agent has no incentive to even show the home.
You always have a choice, including the choice not to purchase a home whereby you have to compensate your realtor. The VA’s decision to allow buyers to compensate realtors is simply to give you more choices, and to level the playing field with every other type of financing available.
I have to say that it sounds like you’re more interested in paying the veteran’s realtor/broker than saving the veteran his money (and preventing the erosion of the VA loan benefit)? Someone has always paid the realtors/brokers fees on the seller side… Just not the buyer on a VA loan.
I agree with you that realtors work for $$$ (and again, I am married to one), and everyone wants their cut.
The NAR rules changed by their settlement in the class action forced VA to change rules to allow veterans to pay the fees that the seller has had to pay in the past. Effectively NAR rules govern the VA loan use instead of the way it was intended. Bring money to pay your agent yourself or don’t use a VA loan… Which many realtor/brokers prefer (especially in high cost living areas) because the VA has many rules to protect the veteran that slows down the money machine. This is a move that circumvents and erodes our benefits legally. Time for the VA to take a hard look and take control again.
I have a son serving now… I’d like him to have the same benefits I had.
Agreed!! This is not a win for Veterans, at all!
Agreed, I don’t see this as a positive at all. This appears to be gold painted crap.
To increase competitiveness VA loans need faster closing times and other incentives to compete with cash buyers and such for the seller. The more you can help the veterans and the sellers, the better because the middle men will game the system for their favor.
Maybe offer the seller a tax credit for selling to a veteran… Maybe competitively cut the capital gains tax on the sell since these are homes that veterans are required to live in anyway (I could see if they were buying an industrial building).
This is a good move for our Veterans. I don’t see that the circular is posted yet – will the seller paying the buyer-broker fee be considered part of the seller contribution cap – which could limit concessions that otherwise would have been available to benefit the VA borrower?
No, not considered since buyer is paying.
Circular says it’s not considered part of concessions, and that it cannot be rolled into the loan. This does little to nothing to help the average veteran, as all it does is allow the veteran to pay his buyer agent out of pocket…
……Which incidentally is NOT A NO DOWN PAYMENT DEAL AT ALL! Which happens to be the reason why many of us veterans opt to buy in the first place. My last 2 VA home loans, I acquired them with nothing out of pocket ( to include closing costs) with great financing, and competitive int. Rates.
If the VA won’t fix this problem, this will definitely affect recruiting/ retention and ultimately readiness in time of war.