Depending on where you are geographically in the world generally dictates how much you know or have experience with our military members. If you are not active duty or don’t have a friend or family member that is, you might not know much about the VA loan. Oahu is home to numerous branches of the US military, and they compose the second largest industry in the state behind tourism. We will see how life changes post Covid-19, but it does not appear that the military coming and going to and from Oahu will change anytime soon. The DOD did have a full PCS stop that was supposed to be lifted May 15 but now is in place until 6-30-20. This policy is being evaluated every few weeks, so if the Covid cases in Hawaii continue to be flattening as they have been, the lift may be faster.
Most civilian buyers and sellers really don’t understand how the PCS cycle works and how the VA loan and buying process is established. Many sellers would consider a VA buyer a higher risk, which is simply not true and certainly not validated. There is a VA addendum in a military buyers contract that protects the veteran mainly from an appraisal issue. When a VA buyer makes an offer and is using their VA entitlement, the lender uses a VA approved appraiser to establish the value of the home. This, in turn, protects the VA buyer to make sure they are not overpaying for the property. Since the VA is guaranteeing the repayment of the loan to the lender, they need to make sure the value and condition are worth the investment. If the home is well maintained and is priced correctly, this is not an issue and typically results in a very smooth transaction and closing.
Prior to Covid-19, many misinformed sellers thought the VA buyer was actually a higher risk and a more complicated transaction, which again is not true. As of now, the safest buyers in Hawaii are the VA buyers. Once they get orders to report to work in Hawaii, those orders remain in place for generally three-year duty stations. The employer is the US government, and those checks are safe and the job is secure. In this new post Covid world, the lending restrictions for conventional lending has tightened considerably. Credit scores have been raised for borrowing, the risk of a loss of jobs, and employment has never been higher.
At the end of the day, a VA buyer is ready, willing, and able to buy a home and close a transaction very quickly with very few worries or complications. This is now a much bigger question mark for a civilian buyer as their employment and or lender requirements seem to be changing more rapidly.
If you would like more information about using your VA entitlement, selling to a VA buyer, or any other Oahu real estate information, please feel free to call, text, or email me at any time