An effort by the National Association of REALTORS® (NAR) to end the U.S. Department of Veterans Affairs’ ban on homebuyers paying for real estate representation appears to have reached a breakthrough.
During the Mortgage Bankers Association conference in New York this week, VA Deputy Director of Policy Michelle Corrdion announced that the department would temporarily lift its ban. The VA policy states that buyers using the VA loan benefit “may not, under any circumstances, be charged a brokerage fee or commission in connection with the services” of a real estate professional.
It was not immediately clear when the ban formally would be lifted or for how long.
“NAR launched an all-hands advocacy effort on this issue, meeting with VA officials, engaging with lawmakers and rallying our industry partners to ensure this prohibition was lifted,” said Shannon McGahn, chief advocacy officer NAR.
“Without this change, thousands of veteran buyers could be denied access to professional representation in their pursuit of the American Dream of homeownership. Taking this extra step ensures veterans have the same opportunity as others to compete in a tight housing market. We applaud the VA for recognizing this danger and acting swiftly to protect veterans.”
The VA policy could have created complications for buyers with the planned changes in NAR’s lawsuit settlement agreement, scheduled to take effect in August. Those changes include written buyer agent agreements that cover agent compensation.
In March, NAR wrote to the VA asking for a policy change that would allow veterans to keep access to the VA home loan benefit.
“In situations where no offer of compensation is offered from a seller, VA buyers are immediately at a disadvantage, potentially forcing them to forego professional representation, lose a property in an already limited inventory, choose a different loan product or exit the market entirely,” the letter read. “The VA home loan guaranty program is a vital homeownership tool that provides veterans with a centralized, affordable and accessible method of purchasing homes as a benefit they earned for their service to our nation. NAR wants to ensure that VA buyers remain active participants in the real estate market to achieve the American Dream of homeownership.”