Veterans are allotted unique products through the Veterans Administration to help financially assist them in becoming homeowners. However, an article in the Credit Union Times noted that credit unions are not using the product offering to its fullest potential.
“In general, I don’t think credit unions need to create special products just for veterans,” said Debbie Guiney, CEO of the $69 million Allcom Credit Union in Worcester, Mass. “They just need us to be aware they are out there and for us to reach out to make sure they know about what we offer and how it can help them.”
Under the current system, Son Nguyen, founder and CEO of Veterans Association of Real Estate Professionals, was quoted saying he was frustrated that neither the National Credit Union Administration nor the VA tracks the numbers of credit unions offering VA loans. But he said he is certain more credit unions need to offer them.
“No doubt reforming the VA loan would help more institutions offer it,” Nguyen said. “But nevertheless, it needs to be offered more routinely and more veterans need to be told about it,” he said.
VA loans requirs no down payments on loans less than $417,000 and may not require a down payment on higher loan amounts. Additionally, VA loans have lower interest rates and do not require mortgage insurance.
Recently, the VA chief announced that the entire department was in need of, and will get, a complete restructuring.
The Credit Union Times article explained that the way its works is the VA provides a guarantee for VA loans in much the same way the Federal Housing Administration provides insurance for loans, according to the agency. The guarantee, or entitlement, refers to the amount of the loan the Veterans Administration will pay in case of default.
Nguyen stopped short of charging lenders with deliberately underselling VA loans, but noted one of the reforms VAREP has been seeking would require lenders to include VA loans in the loan disclosures put in front of veterans as part of the loan process.