I MET WITH A YOUNG COUPLE LAST WEEKEND to review and sign their final loan documents. There was nothing unusual about this, except in this case the couple was finalizing their Veterans Administration home loan request. It used to be that I would assist dozens of veteran borrowers each year, but in the last several years the VA loan has become a fairly rare request.

It made me wonder why that is. The most common explanation is that with all the base closures in California, there are just not as many veterans here as in the past. If that explanation is true, I wonder where all the veterans of the wars of Iraq and Afghanistan have settled upon their return — surely there must be veterans in California who could take advantage of this great VA benefit.

The VA doesn’t actually lend money; they issue guidelines for approved VA lenders. The VA then guarantees a portion of the loan, enabling qualified veterans to finance a home with, in most cases, no down payment, at attractive terms and comparatively easy qualifying standards.

In the hot sellers’ market that we have experienced the last couple of years, prospective buyers have done everything they can to put the best offer forward in an effort to secure a contract on a home — everything from bidding over the asking price to writing letters complete with family photos.

For many in the real estate industry, the VA loan has the stigma of long processing times and high seller expenses. I suspect that stigma is preventing some veterans from using their VA home loan benefit.

Like so many things in real estate lending, VA lending is different today than it was several years ago.

Most of the purchase contracts that I see are written for a closing within 30 days of the seller’s acceptance of an offer. There is typically a 17-day period for buyers to perform inspections and obtain full loan approval.

The veteran I am presently assisting wrote a similar offer, and we were able to complete the appraisal and secure his full loan approval within the 17 days allowed by the contract. We are also closing this transaction in 30 days — no different than a typical conventional loan transaction.

The VA has specific criteria for closing costs that they allow a veteran to pay. In the past these closing costs, which are typically buyer’s costs, were paid by the seller. Typically this would add $1,500 to $2,000 to the seller’s closing expenses. Fortunately, VA has softened its stance on this and now allows these costs to be paid with lender credits. The couple I worked with secured an attractive interest rate and a lender credit that more than covered these expenses. The net effect was zero additional expenses for the seller.

All in all, the VA home loan program is a great option for many veterans that in most cases presents little to no downside for a home seller. If you are considering selling your home and receive an offer from a vet, give it a serious look — it won’t cost you anything and you just might help a vet get into their first home.

Guy Benjamin (CAL BRE License #01014834, NMLS 887909) writes a weekly column for The Herald, offering general information on real estate matters. As it is impossible to address all possibilities and variations, he will try to answer individual questions by readers who contact him at 707-246-0949 or gbenjamin@rpm-mtg.com.

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