In a recent development, the U.S. Department of Veterans Affairs (VA) has announced updates to its home loan benefits program, aiming to assist eligible Veterans in remaining competitive buyers in the housing market. This move comes in response to a settlement reached by the National Association of REALTORS® (NAR) in a class-action lawsuit regarding brokerage fee rules.

Under the updated guidelines, Veterans, active duty service members, and surviving spouses who utilize their VA-guaranteed home loan benefits will now have the option to pay for certain real estate buyer-broker fees when purchasing a home. This revision is aimed at ensuring that VA's programs continue to foster homeownership opportunities for Veterans.

The impact of the settlement on the real estate market is yet to be fully determined, as it is still adjusting to the changes. However, it is anticipated that there may be an increased expectation for home buyers to cover their own buyer-broker fees. Traditionally, sellers have commonly paid for the buyer-broker fees in VA's program.

This potential change holds significance for Veterans using the VA-guaranteed home loan benefit. Until now, Veterans were unable to pay buyer-broker fees when utilizing a VA home loan. However, with the recent update, they may face a disadvantage in the evolving housing market. Therefore, the VA has taken this step to ensure that Veterans remain competitive buyers.

In practical terms, this means that Veterans using VA home loan benefits will be able to negotiate and potentially pay for their real estate professional's commission, subject to certain safeguards. The VA advises Veterans to work with mortgage lending and real estate professionals experienced in the VA home loan program to navigate the specifics of compensation negotiations and the impact of the settlement on home purchase contracts.

Furthermore, the VA encourages Veterans to negotiate buyer-broker fees with their real estate professionals. Veterans can also continue to request sellers to cover the buyer-broker fees during the closing process. It is vital to note that all buyer-broker fees charged to Veterans must align with reasonable and customary rates observed in local markets, as per the safeguards in place.

As the full impact of this settlement on the real estate market remains uncertain, the VA has implemented temporary measures to ensure that Veterans are not adversely affected. The VA will closely monitor the settlement's impact on the brokerage market and keep an eye on emerging models of realtor commissions. Additionally, the VA plans to pursue a rulemaking process to address any further developments.

The VA assures Veterans that it will make every effort to protect their interests and ensure they are not disadvantaged during the homebuying process. By lowering costs, boosting competition, and increasing avenues to homeownership, the VA is committed to supporting Veterans in achieving their housing goals.

For more information about the update and its implications, interested parties are encouraged to visit the VA Home Loans website and review the circulars provided from the year 2021 onwards.