VA Updates Home Loan Benefits for Veterans

Veteran in uniform signs mortgage paperwork.
VA updates home loan benefits, helping Veterans remain competitive in the housing market

In March 2024, 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?

The full impact of the settlement is unknown 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?

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 not yet certain. These temporary measures 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.