A Department of Veterans Affairs homeownership program should align its property condition standards with those established by Fannie Mae and Freddie Mac, which already are among the most common alternatives used by veterans, the American Bankers Association, seven trade associations and the veterans support nonprofit Operation Homefront said in a joint comment letter last week.
The VA recently requested input on ways to address the collateral valuation processes in the VA Home Loan Guaranty Program. In their letter, the groups said that the program’s minimum property requirements for VA loans are among the most significant impediments to VA financing by prospective homebuyers. The groups said they do not support keeping the requirements, but if they are to remain, then they should be aligned with Fannie Mae’s and Freddie Mac’s system that ranks the physical condition of the property. The groups also suggested that the requirements be limited to properties whose condition ratings signify that significant repairs are needed.
“Aligning the VA home loan program with conventional financing, to be both more efficient and more appealing, will enhance the utility of this unique benefit,” the groups said. “In turn, this will assist veterans as they pursue the American dream, and it promotes the VA’s fulfillment of its mission of serving those who have honorably served us.”
