***We intend to update this page as new information becomes available.***
June 11th, 2024
The Department of Veterans Affairs (VA) announced a significant update today that impacts Veterans using their VA home loan benefits. Starting August 10, 2024, Veterans will be permitted to pay buyer-broker fees, a shift from previous regulations.
Key Points of the Update:
Effective Date: This change will take effect on August 10, 2024.
Eligibility Criteria:
The home must be in an area where listing brokers are prohibited from setting buyer-broker compensation through the MLS, or
Buyer-Broker compensation cannot be established by or flow through the listing broker.
Payment Details:
Broker fees cannot be included in the loan amount.
Broker fees paid by the Veteran must be accounted for when determining the liquid assets required for closing.
While an invoice is not required to support the charge, the payment amount must be recorded on the Closing Disclosure (CD). The broker agreement must be uploaded when an appraisal is requested and must be maintained in the loan file.
Seller Contributions:
The change does not prevent the home seller from covering the Veteran’s buyer-broker fees.
The VA will not consider the seller's payment of broker charges as a seller concession.
This adjustment is considered a temporary local variance, and the VA will continue to work towards establishing a permanent rule change.
For further details, you can read the full circular here.
May 22nd, 2024
Michelle Corridon, deputy policy director at the VA, announced at a conference in New York that The United States Department of Veterans Affairs (VA) will soon issue a circular to address a policy that prevents VA buyers from paying real estate agent commissions. This circular, expected between now and June 12, will be released while the VA engages in formal rulemaking.
Currently, VA policy allows Veterans to use a buyer broker for home purchases with their VA loan but prohibits charging brokerage fees or commissions. This policy conflicts with the National Association of Realtors' (NAR) settlement, which requires buyers to negotiate agent fees separately, potentially disadvantaging VA buyers.
Under the terms of NAR's settlement agreement, listing brokers will not be allowed to make blanket offers of cooperative compensation to buyer's agent on the MLS, and buyers will be required to sign a buyers' representation agreement outlining how much they will pay their agent for their services.
Industry experts, including Veterans United Home Loans, have expressed concerns that Veterans will be negatively impacted if they cannot compensate agents.
Veterans United welcomes the VA's move, emphasizing the need to protect the interest of Veterans and military families while still allowing agents to be fairly compensated for their work.
March 28th, 2024
Many of you have reached out, wondering what this means for real estate agents, especially when it comes to the VA loans we all work so hard to help our Veterans get. While the changes that NAR agreed to have not been approved by the court and are not currently set to take effect until July 2024, we want to address some of your concerns.
There is an obvious concern regarding the proposed removal of cooperating compensation from the MLS and its impact on how you get paid. We think it’s important to note that these fees are not prohibited, they just need to be negotiated off the MLS. Our commitment to serving Veterans remains steadfast, and ensuring you receive fair compensation for your work is a priority.
The Department of Veterans Affairs has guidelines stating that brokerage fees cannot be paid directly by the buyer. However, this does not mean that your efforts will go uncompensated when working with Veterans. You can still arrange for these fees to be paid by the seller, just like we’ve always done, through seller paid closing costs. When structuring your deals, brokerage fees can be paid from seller paid closing costs. The VA has no limit on the amount a seller can contribute in closing costs. Please note, it’s important to ensure you do not structure the deal so that brokerage fees fall under seller concessions, which are separate from closing costs and include a cap on the amount paid.
Please rest assured, the interests of Veterans are not being neglected. Veterans United, alongside many other groups like NAR, are actively engaging with the Department of Veterans Affairs to ensure that Veterans remain a vital part of the housing market without having to resort to alternative financing options. While we don’t have a date for when it could happen, we would like to see brokerage fees become allowable.
As professionals dedicated to serving Veterans, your role as negotiators and educators is crucial. We are confident in your ability to navigate these changes, advocate for your clients, and secure the best outcomes for them while ensuring your services are appropriately rewarded.
We encourage you to stay informed through ongoing training and communications from NAR and your local MLS. Our team will continue to provide updates here [hyperlink to article] as more information becomes available.
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