house property pre construction interest

hey gang sarah hill of the veterans united network we are so glad that you joined us today we have a very special guest in our hangout multiple guests in our hangout today mike frueh he is the director of the va loan program

we so appreciate you joining us today you are more than 20 years of experience in the mortgage industry and we so appreciate you availing your time to answer questions from the general public to answer questions from our realtors in our hangout as well

so thanks for joining us "you're welcome" and this is your first hangout i understand right "yes it is." great great well we so appreciate it and we so appreciate the individuals who have joined

the hangout as well from the national association of realtors lets go ahead and have you guys introduce your selves from left to right uhh jeannette lets start with you "i'm jeannette way. i'm a current director at the national association of realtors.

as well as the california association. and i'm a realtor at gateway realty in vacaville california." we also have jessi hall jessi "hi i'm jessi hall, and i'm a real estate writer for the veterans united network." and joanne

"hi i'm joanne poole, and i'm affiliated with prudential home sale ywgc realty in downtown baltimore, maryland. uhh this is my 26th year as a realtor and have been involved in the local, state, and national levels about realtor organization.

on the national level i have chaired the federal housing policy committee, the housing opportunity committee, and currently i'm serving as the liaison between our organizations leadership and our member services groups." and marty "good morning, my name is marty wager.

i'm a certified residential appraiser. uhh, a realtor emeritus. umm, i participate in three different committees with the national association of realtors. i'm currently the chief operating officer of the state of michigan the uhh, appraisal management company owned by the michigan association of realtors."

excellent marty glad to have you here and sarah "hi, i'm sarah young. i work in dc at the national association of realtors. and i work on federal housing policy as well as appraisal issues for the association." alright great and if you are just joining us sarah hill

from the veterans united network here with mike frueh the director of the national va home loan program so appreciate you joining us and taking some questions we also have chris birk who wrote the book on va loans and we razz him about his title on that book all the time so appreciate you having your time

"thank you and welcome to mike." "thank you very much. i'm happy to be here." so lets start by talking about what are some of the benefits of a va loan "i think the primary benefit to the borrower is that they don't need a down payment. so, a veteran borrower just by nature of their service to the country exits the service with a dd214. and that dd214 serves as their down payment.

so, in lieu of $40,000 down payment for an average va home loan, they have their service. and that's a huge benefit to them. they have some added benefits as well. they don't have to pay mortgage insurance on the loan. and they have access to a program that's been around for 69 years, and 20 million people before them have, have gone forth and used the program. so, we have a lot of experience with what we do. "

we have a lot of people watching this hangout right now and a reminder you have the opportunity to ask a question of mike frueh uhh you can ask it on twitter or you can ask it on facebook also on google plus as well umm tweet with hashtag vu live we have producers who are monitoring your comments and we will be funneling those questions

to mike here shortly chris birk the author of the book on va loans much to talk about here "absolutely, and mike i wanted to ask you at the outset about the tremendous growth of the program in the last 5 years. i know you guys guaranteed about 540,000 loans last year, and you are on track for even more this year. why is this program booming?"

"uhhh, well there's several reasons. one, i would say that it's sort of counter-intuitive. so we had this massive mortgage crisis in the last several years. so, a lot of other avenues for people to get no down payment loans have gone away. so, the opportunities to get a loan from hundreds of banks is gone over the years. as banks have consolidated. and mortgage lending in general is kind of tight. so veterans because of their service.

... have this option to get a va home loan. so, while the other opportunities to get a loan have shrunk veterans have been able to use their va home loan benefit. and we've gone, i think we've experienced over 300% growth in the last five years. uhh, 50% in the last year alone. this year, like you said, we're on target to guarantee more than 620,000 loans, and

that's more than we've done in the history of our program. so, it's kind of a combination of there's not a lot of other ways to get a mortgage loan with out a down payment in the market, and we have a very good program. it's changed over the years. it's something that people want to use. you know banks, we are actively working with lenders to make it easier for them so that they'll push it to lenders. we certainly appreciate our realtor friends.

realtors have the biggest relationship with the veteran client and the service member client. so, anytime you are with a client and you have any indication that they might be a veteran, please ask them. "are you a veteran?" "would you like to know more about your benefit?" because it's an enormous benefit for them to use." and speaking of realtor friends umm jeanette has a question

go ahead jeanette way ask your question of mike frueh again you are watching a live conversation with mike frueh the director of the va home loan program and jeanette you are muted if you could unmute your microphone that would be great "sorry about that. thank you. my question for you this morning really hinges around the pest inspection requirement the va has.

in our area and nationally even. umm we have been seeking the removal of the requirement for that pest inspection. what it is doing, and i'm located around travis air force base which is a joint operation, and so we have a diverse military segment here, and what it seems to be doing is putting our veterans at an extreme disadvantage. they are not able to use the wonderful benefit program that you just mentioned, and it is a wonderful program. umm, what happens is the fha and conventional

they do not require any pest inspection. thus, when it comes time to do the offers, the veterans offer is the last thing to be looked at, and right now in a very busy market with short inventory. this is creating a very large problem. so a lot of the veterans are actually becoming disenchanted with the opportunity of a home loan. some are changing the type of financing. so, we are seeing a large percentage of fha coming in

instead of that va benefit that we are talking about. we only have about a 7% take of veterans being able to purchase here. can you help us out? is there any chance we are going to see that removal of the pest inspection requirement, and let the veteran make that decision as they do with fha or conventional money." "well, thank you for the question.

umm, what we've seen over the last several years with pest inspections is more of a concern over the allowable charges for the pest inspection. rather than the pest inspection its self. the pest inspection its self, we try to mirror what fha other lenders would require based on the geographical area. so, if you are in a geographical area that is prone to termite damage which would be the southeast or

the islands. then we'll absolutely want to have a pest inspection because va loans have something called minimum property requirements. that's a protection we provide for the veteran, and we've actually had those in our program since 1944 when the program began. and the goal is: what can we set as a minimum for all veterans to know that they're getting a relatively decent home. we want to protect them.

uhh in the purchase that they make to some extent. and our minimum requirements are safe, sound , and sanitary. so, pest inspections are not going to go away, and until you mentioned now, i haven't heard that there is an issue that we require pest inspections in certain areas because most of the areas that we require them, all of the other lenders require them as well. the issues i've heard stems from the cost and who's allowed to pay for a pest inspection because we've always put

a requirement on our loans that the veteran can't pay for certain things at closing. one of them is the pest inspection, even if we want it. we are modifying that, and we have new regs that we're working on today. uhh in fact i just saw a version of them last week, and i expect to see a final version in the next couple weeks. anything to do with government regulation is not quick, but i have seen them and will be out of our office in the next several weeks to go through a process to go out

for public comment. when they are out for public comment, then you can give us some more feedback on what issues you have with it. if the issue is that just imposing the pest inspection in the first place is preventing people from having loans. we want to hear more of that, but if it's more of the fee and who pays for it which is what we've heard over the years. then i think we are gonna address it by allowing a lot more latitude in what the vet and the seller can

negotiate for what's allowable to be payed." just want to mention got a lot of people watching dean eshelman dennis mccoy john fitzpatrick umm blue jeans stormy the sky scott keaton we will get to your questions in just a moment

but we do want to get to some of our realtor friends in our hangout joanne you are next "thank you. uhh with all the changes in the mortgage banking i know that the va was one that did not really make a lot of changes in the loan process. uhhh sellers can pay all the customary closing costs and up to 4% towards pre-paid items like taxes and insurances. with the 100% financing and the seller is able to cover

everything else, the buyer actually needs 0 dollars and sometimes gets money back. their earnest money back at the time of settlement. there has been a lot of talk about default when there is no monetary investment by the buyer. i just wanted to know do you have or know the default rate on va loans? and if it is more or less than any of the va or conventional loans. "joann that's a great question. uhh, if you think about what makes a loan risky to a lender.

uhh and lenders of course are risk adverse, which is one of the reasons that conventional financing has been hard lately. not putting any money down for a mortgage increases risk because the borrower, the veteran borrower should have no skin in the game, and there should be nothing really holding them to making a payment. a lot of other aspects like 100% financing. rolling in all the costs into the loan. so, there is zero money out of pocket at closing.

this should make the loan very risky i guess for most lenders, and you would think that these loans would be one of the firsts ones to default. the difference with the va loan program is our performance is exactly opposite of what you would expect. so for the past almost 5 years straight va loans have had the lowest foreclosure rate of any other loan in the industry. you know we have a lower foreclosure rate than fha loans. certainly lower than sub prime.

but, we have a lower foreclosure rate than even prime loans. which are borrowers that put 20%-25% down. they have a lot of money in the bank to cover contingencies like broken furnaces, or children that get sick, or cars that break that they have to pay along the way. and they've got excellent credit scores. va doesn't require a credit score. we are underwriting. va borrowers typically, i the number is about 90% don't put any money into

their home when they get it. and the average veteran borrower has $7,000 in cash at closing. so that's assets that they have to cover the broken furnace, or the car that breaks, or the children that get sick, or any other contingency that life throws at them. however, they are much more likely to keep their loan current than any other type of loan out there. and we attribute it to three things:

one, we didn't change our underwriting criteria we have been very liberal to some extent in that it's a benefit program and we encourage lenders to lend to veteran borrowers, but we do require verification of income, verification of employment, and other things to make sure that the income is there to make the payments. two: veterans are an excellent credit base. they have proven through their service that they are committed to following through with their commitments.

and they prove it everyday with their mortgage payments. and third: va has about 1/3 of our staff nation wide focus on helping veterans keep their homes if they encounter an issue like a broken furnace or something that causes them to have trouble making their mortgage payment. we have staff willing to help. in fact, we have a toll free number for them to call if they have any issues, and we have a website that they can go to and a va person assigned to their

particular case to help them through." can you give that website "uhh, the website is benefits.va.gov/homeloans and the phone number is 877-827-3702." sounds good before our realtors ask some more questions lets go to chris birk "mike can you, again that was such a great question. can you also talk about how the residual

income requirement plays a huge role in that too? it's something that other loan programs don't require. there's been a discussion about having it in uhh the qualified residential mortgage." "right, yeah the, unlike other loan programs when veterans qualify. or, when we are doing underwriting and we create our underwriting guidelines for veterans. uhh we are always looking at ways we can get to yes.

you know when lenders come to us and say here is our entire situation. here's the issues we see. here's where they meet all of your guidelines. here where we're not sure. we are always trying to find a way to say yes, yes, yes, and this is why. residual income is another one of those methods that we have to get to yes. and, it's a way that we protect the borrower so that

they know that they have enough money to repay the loan. that's our primary goal is to make sure our borrowers don't get into something that they can't afford down the road. so, residual income is very simple. we look at of the income that a veteran brings in, and then subtract out all of the normal monthly expenses that they have. and we look at what's left over.

is that enough left over to make the mortgage payment for the mortgage you're anticipating. and do you have enough to cover whatever size familiy you have for the part of the country that you live in. now there are certain standards that are published. uhh, i think by the census every year to say this is what it costs for a family of three to live in the mid-west, or a family of six to live in california. certainly very different, but we want to take that into consideration.

so, if you're head of a household of a family of six, and you have $200 after your mortgage payment left over, residual income. you might not be thinking about that's not enough to buy groceries, or it's not enough to pay the heating bill, or it's not enough to pay for gas in your car. we certainly want to do that for you. and that's why we have the residual income requirements." dennis mccoy a veteran who is watching on our google plus stream is asking

umm about refinancing my condominium is he able to do it hes lived there since 1995 "uhh, there's two different types of refinancing for va. one is if you already have a va loan and you want to refinance into another va loan. we call that a streamline refi, and in some cases those loans can close in under two weeks because we don't require an appraisal. we don't require any

additional underwriting. so, you already have the loan. it's guaranteed by the va. it's with a lender, and we feel that it's better for the veteran, for va, and for the lender to reduce the interest rate because we are already on the hook for that loan in the first place. the other type of refi is where you don't have a va loan, and you want to refinance into a va loan. from our perspective we call that a cash out refi. and to get that you would have to get an appraisal, and the value of the home or the condo has to support the value of

the loan that you want, and as a condo you have to get a condominium approval. so the condo that you live in has to have approval by the department of veterans affairs council that says this condo doesn't have restrictions that we consider burdensome to a veteran borrower that would prevent you from basically unfettered enjoyment of the home that you would live in. an example of that would be a condominium that has bi-laws that says you can't sell it when you want to unless we approve it in advance. and we would say, "well that's not a fair restriction

on someone that wants to move. we want to facilitate the home purchase transaction, and we don't want to put any barrier in the way. so, for every single condo transaction we want to evaluate the rules of the condominium to make sure they meet our requirements. if someones already lived there, a veterans already lived there, that condominium association would have already had our blessing and all we would have to do is fit that prior approval."

lots of great questions in our hangout more as well from the national association of realtors lets go to marty umm marty wager go ahead and ask your question for mike frueh the national director of the va home loan program "thank you. uhhh, i have the typical washington two part question, and as you might expect it's uhh from an appraiser. the va has always maintained the control of the distribution

of the appraisal. the most common complaint uhh that i hear from realtors is the percieved limited number of appraisals, appraisers for the appraisal assignment thereby creating a longer turn time. i understand that va is presently recruiting appraisers and is addressing this problem i'd like you to speak to that. and the second part is uhh could you speak to the probability or possibility or va considering an adoption of an appraisal distribution policy

similar to what fha has which would allow the lender to use their own system of assigning the appraiser. " "actually i don't need to write that down." ohh hes so good "marty i expected you to ask this question, since you pride yourself sort of a realtor tangentially and an appraiser by birth right almost. one of the things i answered before, why va loans are performing very well. you know some of it is the underwriting.

we've been very consistent in our underwriting requirements. uhhh, some of it is the servicing. we've been very good at encouraging servicers to go above and beyond, and we go above and beyond as much as we can. uhh the third thing is the value. i think that the fact that va is one of the only national programs that has its own list if you will of certified appraisers. we call it our fee panel of appraisers that are completely independent from the lenders. that's protected

va and lenders from some of the issues that some banks have experienced in the last 5 years. the opposite of what we have. where we assign appraisals on a rotational basis from one appraiser to the next one available in that particular region where the veteran wants to purchase a home limits the ability or potential of a lender to say i love marty my favorite appraiser in the world every time i want a $500,000 value from marty i get a $500,000 value from marty. that's the risk because over the last 5 years we've seen

that lender select could lead to some type of perception that the lender is pressuring the appraiser to come in at a value that the home may not support. so, by having this independent panel of appraisers we feel that we have managed to avoid that entire issue all together. however, we have had a lot of pressure over the years to switch to letting the lender select. let the lender use whatever system that they use. whatever amc they use these past several years or

in the old days it was whatever appraiser that they liked that gets things done quickly or in the way that they like, and the risky side the value that they like. and we don't want to do that. we've felt that the success of our program stems in part from our panel of appraisers. last year we did start a process of recruiting 25% more appraisers than we have today. i know that what i always refer to as "our fathers va" uhh i say that "we are not our fathers va"

because the old va had a lot of perception issues many among relaters that i've talked to over the years that it's a very slow process. it takes forever for veterans to get their coe. it takes forever for lenders to get the value their waiting on the value. it's delaying closing. it's making deals not happen. what we saw in the last year our value has come in in under ten days on average. so what came a month long process 10-15 years ago is

now done in under 10 days on average. that's a nation wide average. in metropolitan areas it will be much shorter. in very rural areas like there are certain parts of montana where i've seen it could take upwards of a month to get an appraisal and a value, and that's one of the reasons that we are adding to our channel of appraisers because we need more people in these areas so that you know if you have someone that has to drive 300 miles to get to a location

in alaska. because our program remember is from guam in the northern marianas in the pacific all the way over to the american virgin islands in the atlantic. that's a lot of area to cover. so, 6,000 appraisers is a lot of appraisers if you want buy in downtown houston there's going to be several. but if you want to buy in rural, rural alaska there's just not a lot of people there to be appraisers, to be able to get there. so we are trying to overcome that by adding more appraisers.

so, the second part of your question - no. we've talked about changing the process, but the reality is a lot of the other programs, like fha has been talking about lately moving to a process exactly like va. you know what can they do to model a fee panel system uhh to look like ours because it does offer certain protections for the lender and for the governing." jeannette just asked a question jeannette way - is the va thinking about similar

to fha 203k "uhh that's an excellent question. we have talked about that a lot the last year. in fact the sister for the program that helps guarantee loans. on the front end i have talked about. how can we make this a reality. we actually have the legal authority to have a program like a 203k so the veterans can purchase a home that needs some renovation value it at the renovated amount and borrow up to that amount

so that they can make repairs, and move into a house that is exactly what they want, renovated to what they want. we have the legal authority. we don't have the regulatory authority. so we are working on how to create a regulatory framework that would allow for multiple disbursements of funds. cause we have to protect the fiduciary interests of the government on this loan. so that the funds are going for actual repairs that will come in to meet some level of requirements. they're up to building code in the area, that the builder is reputable and doing something that the veteran actually wants.

so the implementation of that is probably several years away jeanette, but we do want to do that. especially in the last couple years their are a lot more reo homes have hit the market and veterans have wanted to purchase it with their home loan benefit, but because the homes may not meet our mprs they are not able to use the va loan to purchase it. they could use the fha 203k and actually perform renovations and move into a refurbished house." ok and if you are just watching live this is mike frueh

he is the expert he is the national director of the va home loan program we appreciate you joining us you can tweet your questions @vulive we have a lot of them coming in and we are going to get to them as soon as we can umm i wanna bring in sarah young

you had a followup question that you wanted to ask sarah go ahead and introduce yourself "hi this is sarah young again. hi mike. umm i had a followup question on condos. umm especially for the gentleman who wants to refinance his condo using a va loan. how would they find out if their condo building is certified by the va, and also do you do spot approvals,

or does the whole building need to follow your guidelines?" "uhh first of all the borrowers don't need to get the approval the lender is the person who typically packages up the material. sometimes the realtors do. and they'll send it to va, the nearest va office will be able to package it in the right methodology and get it to our regional council to make sure that, that particular condo meets our requirements. if you have questions, you can actually call va at the nearest regional loan center office.

they will be able to tell if the condo complex has had prior va approval. we actually keep a list in all va offices. we know which ones have already been approved. we've been doing a lot in the last year to free up some of the resources in the va offices to expedite condo approvals for states like michigan that actually have a condo - i wouldn't say issue because we are very quick at approving condos in michigan, but condo development in michigan is different than most other states because new home construction typically follows under

a rule called site condos. uhh so what looks like single family neighborhood is really zoned as condominiums and requires va condo approval. so we've been very good at getting condo approval in most times less than a week in the state of michigan. in other states it depends on what the council workload is. but in all cases if you talk to va at the nearest regional loan center. uhh there's information on our website that you can get to the nearest regional loan center. they'll be able to

answer your question on whether your particular condo has already been approved." soldier for life watching big shout out to soldier for life as well thank you to those individuals who are giving us retweets the va just retweeted as well so that is wonderful lets bring in jessi hall jessi go ahead and introduce yourself

i think you have a question for mike frueh "hi mike, i'm jessi hall, and i'm a real estate writer for veterans united network. and i'm just wondering if you could talk a little about the va appraisal process to an agent or a buyer who has never been through that process before. how it's similar and different from a conventional or an fha appraisal. " "ok well, excuse me. my goal in general for the entire program is to make it as transparent to the veteran purchaser as possible. so they don't need to know what's the difference between

an fha, va, or conventional appraisal process or loan process. we want to make it quick and we want to make it easy for them. the appraisal process when we were talking earlier about va having a fee panel of appraisers. basically means that lenders don't send the appraisal to someone that they pick. they actually when a borrower goes to a lender and says i'm interested in using my va home loan benefit. uhh the lender will typically go online and get the borrowers

eligibility. they can check the borrowers eligibility in most cases, in the majority of cases they can check instantly online with systems that va has. and when the borrower picks the house that they want and needs and appraiser the lender makes an election online saying here's the house that this borrower wants to buy. can you assign an appraiser to go out and look at it? va has systems that will say, "ok you want to buy a house in say traverse city michigan. we have 10 appraisers

on our panel in traverse city michigan. it will go to the next appraiser on that panel who will then say i have an assignment to go to this and get an appraiser. and we track the timing from the minute the lender says we need to get an appraiser to the minute the appraiser gets the assignment to the minute they return the appraisal to us. with what their estimated value is on the appraisal. on average this past year we get our appraisals in in less than 10 days.

and then, there is an additional step that a va loan gets something called a notice of value. a staff appraiser reviewer either at the lender or at va will look through the appraisal and say yes we think this appraisal meets our requirements it's generally conforming with what we want the appraiser looked at these different things. so, here's what we think the value is. here's our approved notice of value. that takes in total with the appraiser just under 10 days in this last year.

so from the minute the lenders says we want to get an appraisal for this borrower who wants to get an home to the minute we have the notice of value is ten days. that's our target nationwide, and we know there are some areas where it's slower and there are some areas where it's much faster, and we're trying to get the process everywhere to as quick a process as possible so that no one has to wait for an appraisal, but again my goal overall is to make sure that no borrower needs to know how the appraisal

process works. it should be, i want a loan. go to the lender that you pick and they should take care of the eligibility, the appraisal and none of those processes should take longer than needed. uhh certainly not, we want to beat the best of the rest of the industry for everything that we do. so, nothing uhh i guess slows up the process of getting the loan. ok i have a question from

umm our blog right now allen thank you for watching and thank you for your service he says im 100% permanently disabled and living off of my disability can i still get a va loan this way with no money down "uhh actually there's an added benefit, not just for 100% disabled veterans, but for any veteran who receives disability comp from the va.

va is always been a no down payment program, but we have something called a funding fee. and the funding fee is something that started right around the korean war for it to help recover money for the program. where veterans would pay. they pay an average of about 1.75 percent of the loan cost to get the loan guaranteed by the va. so that's an upfront fee. that can get rolled into the loan amount. so you can finance it into the loan amount.

uhh you don't need a down payment, but a lot of borrowers need a funding fee. veterans in receipt of disability comp, and 100% disability is definitely in receipt of disability comp are exempt from paying that funding fee. and currently about 30% of our borrowers. i think just over 33% do not pay the funding fee because the receive disability comp. now veterans in receipt of any type of compensation from va or from social security are able to count that income in the underwriting of their loan.

all they need is their disability comp letter from va which says this is the rating that you have and this is the monthly amount that you get, and that qualifies as income for the loan. so as long as your combined family income is enough using our residual income guidelines to show that you can repay the loan that you want to get for the home, you can absolutely use that income to use your va loan benefit." allen i hope that answered your question

and again thank you for your service to our country also thanks for the individuals watching heros homecoming umm in fayetteville tim payne san antonio vamc va vet benefits and rock richard and linda saldka thanks for your retweets umm with our conversation with mike frueh

lots of other questions coming in i want to get back to the hangout umm marty wager go ahead you have a question and it relates to appraisals imagine that "it's just, it's just a followup and that is with the implementation of dodd frank and appraiser independence a lot of what you spoke about uhh has been addressed i only follow that up to say that the distribution now through lenders have to follow dodd frank, appraiser independence

regulations and guidelines." "i absolutely hear you on that marty. one of the things that we've always been very proud of is that the process that we started years ago, and have followed is in a sense kind of the model that other organizations are going to now. so what dodd frank and the various rules related to appraisals. and there's a lot and there's a lot we are actually modifying to as well as to the form of the appraisal and the data that

comes in on the appraisal. we're subject to that as well, but the method of assigning appraisals we feel very strong has been effective, and we know that amcs or the appraisal management companies are kind of a by product of dodd frank and what's come up over the last several years are a lot of modeled or in a way, mirrored our own. so, i think what you're saying is the if we would abandoned our own and go to something else, it would mirror what we have, but we

do like what can have. and having said that i want you to know that i am not, no way shape or form married to any particular thing just because we've done it in the past i wanna do what's best, and i constantly challenge my staff and my directors, assistant directors to look at what's out there, what could be better what can be better, and what can we do right away to make it better. so, we'll keep looking at it marty, and if you pose a good enough argument to make us see the light as the

way you see it, then i promise you we will make changes." "i will speak to you in dc." "you talk about your fathers va a lot. are there still myths and misconceptions that are keeping veterans from using these benefits?" "i would say that, we recently did a survey called "the voice of the veteran survey" where we mailed out thousands and thousands, hundreds of thousands of survey instruments. and we queried veterans on their use

of all types of va benefits. on the home loan program we had incredibly high satisfaction scores. veterans in general gave va a score higher than the highest benchmark in the mortgage banking industry for mortgage loan program. so we felt very good as a governmental agency to get scores as good or better than companies in the private sector do. because in a way that kind of goes against the myth of the "fathers va or grandfathers va" veterans have said in the survey that they are very very

happy with service they've gotten from realtors. realtors got one of the highest satisfaction scores on there. as well as lenders. and they said realtors responded in a timely manner, were very courteous, were responsive to their needs, and were concerned with what were issues that veterans brought to them. and they were able to relay it to the lender and to va in a way that made the veterans very happy. having said that, the veterans that knew about the program liked it and said it was wonderful. the veterans that didn't

know about the program are the ones that i think might suffer from what i would call "our fathers va or grandfathers va" syndrome which is the realtors that are talking to them or spending the time driving them around that had bad experiences over the years of loans taking too long, or mprs we call our minimum property requirements at closing causing someone to go to a different loan program. or, they might just consciously steer them to a different loan program at the beginning simply because they say

well you know years ago this happened. i wanna say we are not the same program we were years ago. we constantly re-invent ourselves. we try to be better. we want to be better than everyone else. we don't want to be equal with our industry peers, or equal with our government peers, we want to be in front. so, one thing we have strived for the last several years is to be the best. we want to have the lowest

foreclosure rate, and we have for the last five years. we want to have the best results for our loans. we've had more loans in the last couple years than we've had in the history of our loan program. and a lot of it is this, sort of, constant reinvention and constatnt re-evaluating of our program. so one thing i'd like to say. to realtors especially that are listening to this call. that if you've had any experiences with va over the years before.

especially more than 10 years ago. we are a very different program than we were then. our systems are dramatically different. there's virtually no paper in any of our va offices. all of our communications with lenders, with appraisers, with borrowers is done electronically, and it's virtually instant. so, we don't have anymore time lags from waiting for approval from va. we try to get out of the process as much as we can." speaking of time lags real time conversation this is mike frueh

and he is answering your questions in real time i wanna bring in joanne poole ummm as well you have a question for mike frueh the national director "yes, thank you. umm it's great to know that a veteran with a disability is able to purchase a property and have the property taxes waived. it would help even more though if there were a few settlement fees, state and local if they could be reduced and

not just rolled into the mortgage or passed off to the seller. is there anything on the table as way of a conversation with any of the state and local entities to be able to reduce any of those fees?" "i think that's an excellent question that we can start bringing up with various state taxing authorities because really what you are talking about is the state and local taxes that are added to mortgages. so, what you referred to that we didn't really explain to everyone is that if you are a disabled veteran in almost every single jurisdiction, you can petition your local taxing authority, and you can have all of

your real estate taxes waved. so, in some cases they require it's a one time waver. in some cases it's an annual waver. but that's a fantastic benefit that you as realtors could also relay to your clients. if you find out that they are disabled veterans, especially if you are a 100% disabled veteran. which are typically the ones that qualify, but the ability to tax is the local responsibility of the local governments and that's a conversation that you as leaders in your local communities can bring up, and that i can certainly bring up on the national level when we talk to local authorities.

jessi hall go ahead with your question for mike frueh "ohh hi, umm. i was wondering if you could talk a little bit about the best uses of a va loan for all of our buyers that might be out there watching. what types of properties work well with a va loan." "uhh, just about any type of property you want to buy. whether you want to buy a farm that has a residence on it. or if you want to buy a condo as our questioner earlier

asked, or if you want to buy a single family home in the neighborhood of your choice. really the only thing that we have as a restriction is it has to be your primary residence. so, using your va home loan benefit, the benefit arose out of wwii as a way to allow veterans to purchase a home and reintegrate into society. so, there were parts of the act that let them get education and employment training, and this is a way to help them

buy a house, and that aspect of the program has never changed. it's always been a home to live in program. so one thing people don't know is that they can actually use it more than once. so some people think of it as a first time home buying program. that they can use it to buy the first house when they get out of service. or, 30% of our borrowers are still in the service. they might use it as their first house when they get married and want to have kids and then they go on to buy bigger houses or houses

in different areas, and they don't realize once they pay off the old house, they could use it again and actually buy another house. and the benefit, the biggest benefit in my mind is the no down payment. cause that's a huge expense that borrowers have to save up for to get, and if you can get a loan on excellent loan terms without a down payment, it's a fantastic benefit. so to address your primary question, there's no particular type of home that's better than another. uhh it has to be your primary residence, and it could be

anywhere you want to live that we service. which again is from the side of the pacific where guam and northern marianas all the way to out side of the atlantic with puerto rico and the american virgin islands." sarah young you have a follow up question to jessis question go ahead -- and you are muted sarah so if you could uncheck your microphone there that way we can hear you "thank you. when a veteran is looking at a certain property,

i know you mentioned earlier that their are minimum property requirements, and i was wondering if you could point them in the direction where they'd find what these minimum requirements are. and i know there are also some variances for regional difficulties, and if you could just give a couple of examples of things that maybe our members could look for. i know we had a question once from a member about a problem with planting grass in the winter.

where they couldn't get the grass to grow, but unless the sod was laid the property wouldn't meet the minimum requirements. and if you could just shed some light on that. also, maybe direct people where they could find more information that would be great." "the grass and sod is the first i've ever heard of a grass issue, but with the minimum property requirements. cause they really are kind of self described minimums.

we are not trying to make a really high bar for veterans to have to meet or a property to meet so a veteran can buy. we're just trying to set a standard so that- a: we can protect veterans that are buying their first home or they are doing something they don't do very often. so this is a way to say this house meets at least a minimum set of requirements that mean that it's safe and it's sound and it's sanitary. so one example that you know we see a lot would be exposed wiring in a

foreclosed home. so you go in there and people took fixtures off the walls or took light fixtures out of the ceiling. so, it's exposed wiring. that's a safeties concern. so that would get written up as: until these wires are capped, or a new light is put on or a new switch is put on, this house is not safe. it doesn't mean the house is ready to implode, or there is something horrible that'l happen if you buy the home. it just means here's a set of things that all va

appraisers are trained to note in their appraisal that will come in as exceptions, and say here's what we believe the value of the house is and here's the one, two, or three things that have to be done before it meet's va's minimum property requirements. uhhh, veterans and lenders and anyone that is interested realtors could go to our website. benefits.va.gov/homeloans and they could look at minimum property requirements, and

you can see what va tells lenders and explains to everyone what they need to meet for the home to pass for a va loan." questions continuing to flood in youre going to be here all day theyre not going to let you leave "that's ok i'm here to answer questions." david weidel from google plus he is a veteran david thank you for your service he asks is there any talk in letting the buyer escrow a small amount at closing to make the

va required repairs this could open up a huge number of homes for my dva clients "david again, i echo sarah. thank you for your service. i thank all the veterans on the phone for their service. and that's something we talked about a little earlier. it's a program fha has a 203k, which allows for escrow and dismemberment of repair funds based on two different values where the appraiser would actually go through the house and say here's what the house value is today.

and if you made these repairs that they they'll list. this is what the value would be in the future. and with an fha 203k program the borrower can actually borrow up to the as repaired value and use the different funds to pay as they go through and build out or make the repairs. we have legal authority to do that, and we're working on a program to make that a reality. we have to create regulations and we have to find a way, quite honestly to make sure that we have a program that would allow

veterans to buy houses that they want to make repairs as well as meet whatever local building code requirements are. and make sure that people don't get into something that's quite honestly over their head. so, minimum property requirements what we just talked about would also apply in this case. you know we want to build in some protections for veterans but we don't want to have too many protections that prevent them from purchasing homes.

so we do want to work on a program like that, and we are working on a program like that. but i can tell you honestly that as a regulatory program, something that we'd have to issue regulations to get out. it will take a while. it will take a minimum to 18-24 months from uhh when we started working on it before to when it's out. so we've got a ways to go. but i do appreciate your interest in that, and we are looking into ways to address it."

"and i think as far as sarah's point goes too there are some cases where a veteran can ask for it an exemption from the mprs that gives them a little time to escrow some funds and take care of it. i know weather related incidents are one of the most common." "and actually, another thing. the fact that we're a no down payment program. not everyone does not have means to make a down payment, but you don't need to make a down payment with the va loan. so, if you do have

funds for a down payment. say from the sale of a prior home, or savings that you had. you could still use a va home loan to purchase a house and use the money you would have put as a down payment into the loan. and then when the value's there, you could even use a streamline refi(nance)to get a new loan for the entirety loan amount. " raoule magna thanks for watching darrel hill daniel corbin steven payne

steven you have a question steven is a disabled vietnam era veteran and he wants to relocate to another state to get a va loan for a house how difficult is to obtain a loan my credit is perfect no debt other than my current conventional loan "uhh, that's an excellent question, and again thank you for your service, and what i would say the first thing i would start

with is talk to local realtor in the area where you want to live. uhh, you might want to call some banks as well and find out what type of loan you would qualify before you start looking to see how you can actually begin the process. personally we always say start with the realtor. realtors know the local market where you want to go. banks a lot of banks have websites with calculators that would let you know based on your income what type of loan you might qualify for. the process typically

begins with you know get pre-qualified find out how much your income will allow you to afford in a new home loan and that might narrow down your searches to certain areas or certain neighborhoods or certain types of houses. and then talk to a lender about actually getting the loan. you know go with the realtor find a home, talk to the lender. the lender can get your eligibility from va. that's an automated process now. where if you're

interested, you could use va e-benefits website which is ebenefits.va.gov and pull your certificate of eligibility. now if you have questions you can go to our website. that will certainly outline the processes as well. but the lender will really guide you through the process. they'll know at what point they need to get the appraisal. they'll order the appraiser for you when you find a house. and they'll ask you for all the documentation you need to get the home loan. they'll ask for documentation like

proof of deposits in banking institutions. so you'll need to get statements from your bank from the last three months or so. you'll need to get income statements whether it's through, if you're a disabled veteran you might have va compensation, you might have social security compensation. it might be income from jobs that you or your spouse have. but all of those will be something that you will have to get together and discuss with your lender. but the process can almost all be done virtually.

almost all of this is done by phone, by scanning documents, sending electronic documents to your lender. it's very simple and you can begin today if you want to go to our website and look for where to start, you can actually start today on our website." alright sounds good are you doing ok do you need any water or anything cause we are almost going an hour here and the questions still keep

coming in daniel corbin asked will there be any changes to the present loan system i refinanced once and i am still underwater can veterans refinance with out any money down "uhh, actually there's two different refinance program that the va has. one is a va to va refinance. so if you already have a va home loan you can do what we call a streamline va refinance into a new va home loan. that's called an earl loan.

that loan doesn't require a value. you don't need and appraisal, and it doesn't require underwriting. va requires neither of those. uhh, you might want to talk to different lenders to see what type of programs they have for you, but if you already have a va home loan you can certainly refinance. it doesn't matter if you are under water. we are concerned with the loan you have today. if you refinance and the payments are more affordable it's better for the government, it's better

for you as the borrower, and it's better for the lender. if you don't have a va home loan and you want to refinance into a va home loan, you have to get an appraisal, and if you are under water we only allow you, this is a law a statutory requirement of the va program you can only borrow up to the value of the home. to 100% of the value of the home, but it's still limited to the value. so, if you're under water and you don't have a va home loan. you should ask lenders about something called the government

harp program. which is the home affordable refinance program. uhh there's actually harp 2.0 came out last year, and more borrowers are qualified for that type of loan, but you have to check with your lender first and they'll check your particular loan and see whether you qualify and what could best help you." scott keeton on google plus thanks for watching he says i have a credit issue and i have not used my va loan i would like

to buy a house in los vegas but im not looking forward to getting turned down i would like to know if the va loan is good and will work with vets with bad credit can you tell me or point me in the right direction to someone who can help me "scott, again thank you for your service. you are not in an a typical situation. va has as a guarantor , we are not a lender. we actually

guarantee loans that banks make. we don't set credit requirements or fico score requirements for borrowers, but we do have underwriting criteria, and our underwriting criteria is basically looking to see, anyone that wants to borrow money for a loan that we will guarantee. do they have the capacity to repay their current loan, and do they have a proven history of repaying their debt. we understand that a lot of people have loans. we even have rules around borrowers that have bankruptcy and foreclosure

in their past. and we allow them to get another va home loan within three years of the prior event if the veteran has demonstrated a current track record of paying their debts and being a responsible borrower. so it really depends on your individual situation. what i recommend are two things. one you could go to our website benefits.va.gov/homeloan and call the nearest va regional loan center. there's a list of regional offices that offer

va services, and you could talk to someone at va that could discuss what your particular situation is and offer you some advice. or talk to lenders. lenders know more about lending than anyone. it's their money that they are lending. they are very interested in you as the borrower, and they'll be able to talk to you about programs that they have or opportunities that they may have that will help you. from a va perspective you served your country.

you've earned a benefit. we are more than happy to guarantee a loan that you can take out from a bank. we just want to make sure that you have the ability to repay the loan because we don't want you to get into a situation where you are paying more than you can afford." joanne poole i see you have a question as well so go ahead and ask it and you are muted joanne so if you could unmute

"i'm so sorry. mike i had a question about the appraisers and the limited number of appraisers that are on staff right now, and the distances that they seem to have to travel to be able to do some of the appraisals may be part of what the slowdown is in our market in gettin those appraisals turned around. but more importantly some of those appraisers are traveling into areas that they have no familiarity with, and it's causing us to have appraisal issues. umm,

do you have some time frame in mind on when additional appraisers may be brought on board?" "absolutely, we started last july with a goal of hiring 25% more appraisers than we had at the time. at that time we had 4,600 appraisers on our panel. uhh we wanted to hire another 1,200 appraisers to bluster our ability to get to homes. mostly in rural areas where appraisers no matter what would have to travel a long ways simply because there's a lot of geography to cover.

and this is really an issue for us not so much in your area in baltimore, but mostly in areas out west where you have colorado, montana, wyoming, california, oregon, alaska. areas with huge geographical areas and not a lot of people. so, veterans who are buying homes are buying in a scattered area, and the appraisers that live there live in a scattered area. so, the 25% increase goal. we are half way there. we are about 52% which is over half way in the past 6 months, 7 months to our goal, and our target

is to this summer have about 5,700 appraisers on our panel. we are also starting a new process. more technology to help us get better. uhhh, it's a system we call ams abm which is our appraiser management software. which we'll start looking at every appraisal that comes in, and score it. say how good is this appraisal based on you know a system an automated system of scoring. to say did we look at good comps? did we value for certain things? did we pull information from all the public records

that we have to accurately describe what this house is and what's it worth. and as we start scoring appraisers we gonna appraisals will start building up enough information for our appraisers. so one thing we've heard people say is we have a lot of appraisers on our panel that have been on our panel for a very very long time. and most of them are wonderful appraisers that are very skilled at va mprs and va rules and know what we want. but some people have had an experience where they take

longer than they would like to get a particular transaction through. this new system will allow us to rate timeliness in a much more granular way than we have been in the past, and by doing that we hope that we will be able to get our average appraisal timeliness down from 10 days. which is appraisal plus notice of value to under 10. and then look at all the next layer, the more rural appraisals, get all of those time frames down as well. because in our most rural states we have time frames up to 20 days just to get the appraiser

out to the property to do the appraisal. i'd like to get that down to 10 days nationwide as a requirement. and you know then see if we can start getting it down from 10 to the lowest possible time frame we can." marty you have a followup to that "just a followup. yes, thank you. umm, a good amc always roots its self or should root itself in the best qualified the best geographically per capita and the best service, and you've done that. and i appreciate your comment about wanting to

maintain that control, and in the mid-west the amc that i oversee is rooted in that. so when we go into rural areas we spend the time to do that, and when i suggest opening it up the free market opens it up to finding the amc that will do that for you. or the lender. as you know, lenders can run their own distribution system within their own company. ummm, and it just it's a situation where we are after the best we're not after the quickest. and any good amc should

do that which is what you've stated. you're not after a three day turnaround time. you're after the person who's best qualified and can offer the service to do the job." "absolutely, thank you very much for those thoughts." 20 millionth borrower recently a mile stone what do you attribute that growth to "uhhh, i think there's a lot of things. one, there's a lot of veterans. we have, today there's about 23 million

veterans living in america and the world. uhh, a lot of them here in the us. two, the program is an excellent program. it's been around since 1944. the main tenants of the program, the no down payment, the controlled closing costs where there is not a lot of costs for borrowers at closing. uhh, the assistance if there's any issues in default along the way. those have maintained through the last 69 years. and especially in the last 4 or 5 years. veterans have been returning to va in droves.

and lenders have been coming to us in droves. last year we had our second biggest year in history, and this year we are prolly gonna beat our best year. we're on pace to exceed 600,000 loans this year. so it took us 69 years to get to 20 million loans. it's probably going to be a lot less to get to the next several million. the next milestone. but i think that the program is meeting the needs of veterans and lenders so, last year to lend 540,000 loans we had 1,555 lenders

i think in our program. and some of them lent one loan. some of them lent 100,000 loans. it just depends on where the veteran lives and where the veteran wanted to purchase the home. we don't force anyone into any lender. we don't force anyone into any realtor in any particular location. it's really veterans have a lot of control over the process, and my goal over the future is to make it as transparent as possible so even more veterans choose to use their

va benefit and understand that they can use it more than once. and that case i'm hoping we'll get to 30 million in the next several years." chris "is there anything as far as parting thoughts go? anything else that you think realtors who are out there serving our veterans need to know about the program to even better serve them?" "i think realtors should, you know realtors, i can't thank

you enough. if there's any party in the transaction that's more influential in helping veterans find a home that meets their family needs, it's realtors. and helping guide them through the process. you know from the minute they call you to sitting at the closing table with them at the very end when they're getting their first key, or their second keys for their second home. all of that is soemthing that you do day in and day out. and most of our borrowers don't do this very often.

it's a new process for them. many of them are nervous. many of them are scared, and you're there to give them the voice of reason and to let them through it. let them know that you can walk them through all their steps. uhh, veterans have let us know that they appreciate it. they are very satisfied with service of realtors. you have some of the highest satisfaction from our veteran borrowers of any part of the process. that's excellent and we appreciate that. but some things that i would ask that you remember when

you think about the program and you talk to your clients going out is there's 23 million veterans in america. and 1.8 million currently have a va home loan, but there's a lot that don't. uhh there's a lot of opportunity for new business. there's a lot of people that you see that if you don't know they're a veteran, just ask. ask if someone that you're driving with is a veteran. veteran home ownership rate is 127%. higher than the average american home ownership rate.

so the non veteran population is somewhere, i forget, about 68% veteran population about 81%. uhh, it's fantatstic these are people that like to buy houses. they are people that are successful at buying houses. the va home loan program allows them to be more successful. they don't need to come up with a down payment. and on an average va loan that's $43,000 they can save to make some modifications to the hosue when they move in, or use for other issues that they need for their activities

of daily living. you know we have programs to help disabled veterans. we help programs to help needy veterans. we're here to help veterans. we appreciate your help in that process as well. as we close this out here i have people prompting me on the to make sure you give the website and the phone number out one more time "ok, the website that anyone realtors, lenders, veterans can go to is benefits.va.gov/homeloans and there's a lot of resources

on there for veterans. there's a lot of resources for first time home buyers. you can go and look and see. what do i need to do? where do i start the process? what can i expect throughout the process? uhh the phone number. there's 1-800-827-1000 for general questions. that will get you to your nearest regional office. and if you have eligibility questions there's an additional toll free number 888-768-2132 that will get you to our eligibility center and they're experts on answering your questions about

when you served, the type of service you have, and how to get your eligibility." your first google + hangout what was that like real time access to people we so appreciate you availing yourself umm over the last hour so its great to have access to a mediator with the va home loan program we hope that everyone watching on facebook twitter google + umm got

some benefit out of this this conversation does not end here we are still talking with you even after this ends ummm and going to try to get your questions answered so to all of our realtors the national association of realtors thank you so much for availing your time "thank you all" we appreciate it

i am sarah hill from the veterans united network we will see yah next time on a future broadcast subtitles by the amara.org community