There are an estimated 18 million U.S. military veterans, an undisclosed number of surviving spouses, and 1.4 million men and women currently serving on active duty.
This means that there are in excess of 20 million Americans who may be eligible to take advantage of the VA home loan program.
The good news for an agent who specializes in VA buyers is that millions of veterans feel that 2021 is a good time to buy a home.
Nearly 60% say they intend on buying in the next five years and 34% say they will definitely buy a home this year, according to research conducted by data and consulting company Kantar (for Veterans United Home Loans).
Sounds like a lucrative niche market, right? Not so fast.
“Real estate agents who aren’t familiar with the details of the VA loan program could waste time showing you properties that have little chance of meeting VA and lender guidelines,” warn the pros at veteransunited.com.
If this is a niche you are considering in your real estate business, get up to speed on the VA loan now, because half of the veterans surveyed say they will definitely consider applying for one.
How to become a military-friendly real estate agent
No, you don’t need a background in military service to work effectively with military homebuyers. Sure, it helps when it comes to communication. The real knowledge you’ll need, however, is about the nuts and bolts of the VA loan program.
You’ll also want to get to know the needs of this group of people. Many, for instance, don’t know that they are offered a unique home loan program as part of their benefits. In other words, they are completely unaware of the VA loan program.
“If you have not used the VA home loan program, what was the main reason you did not?” was a question put forth to veterans for the VA’s 2010 National Survey of Veterans. Nearly 34% responded that “I didn’t know about the program.”
Your first job, then, is to create a direct mail piece letting these folks know about the VA mortgage guaranty and singing the praises of its benefits.
Learn what’s important to veterans
Nearly half of the aforementioned survey respondents who did use a VA loan in the past said they did so because there is no down payment required.
Another big handful of them chose the loan for its “favorable interest rate,” and, coming in third, one group said that they felt their loan was more likely to be approved if it was guaranteed by the VA.
Since these features of the program are of such high value to applicants, these are points you need to feature in your marketing pieces.
Especially when it comes to comparing the FHA-backed mortgage with that of the VA (which a substantial number of veterans do), the lack of private mortgage insurance is a biggie.
Although they didn’t mention closing costs (as is typical with most homebuyers), let your leads know that the VA puts limits on the amount that the lender can charge the borrower.
It’s not all rosy, however. The VA loan comes with a funding fee. The amount varies and you can learn more at va.gov.
There is a lot to learn about the VA loan, but it’s all well-worth knowing. The VA makes it easy for you to learn by devoting a section of va.gov to real estate professionals. You’ll find that information at benefits.va.gov.
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