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A Quick Guide to VA Loans
EQUAL HOUSING OPPORTUNITY
Discrimination in the sale of housing because of race, color, religion, sex or national
origin is prohibited by Federal laws. In November 1962, Executive Order 11063 banned
discrimination in all federally assisted housing. The "Fair Housing Law," Title VIII
of the Civil Rights Act of 1968, followed by amending legislation, required positive
action be taken by Federal agencies to prevent discrimination in all housing. Further, title
VIII protects you from the following acts when they are based on discrimination on account of
race, color, religion, sex, handicap, family status. or national origin:
- Refusal to deal,
- Discrimination in terms of sale,
- Discriminatory advertising,
- False representations that a dwelling is not available,
- Blockbusting,
- Discrimination in financing, and
- Discrimination in real estate services.
These laws provide every person an equal opportunity to choose suitable housing.
The Department of Veterans Affairs affirmatively administers the VA housing program by assuring
that all veterans are given an equal opportunity to buy homes with VA assistance. When participating
in the VA program, all builders, brokers and lenders must comply with Executive Order 11063 and
the Civil Rights Act of 1968, as amended.
Builders must sell newly constructed homes with VA financing to eligible veterans without
regard to the race, color, religion, sex, handicap, family status, or national origin of
the veteran.
Brokers participating in the VA home loan program must not discriminate against a person on the
basis of race, color, religion, sex, handicap, family status, or national origin by refusing to
show or sell a property; by discriminating in the terms of the sale; or by representing that
property as not available for inspection.
Lenders participating in the VA loan program are required by the Civil Rights Act of 1968,
as amended, to act on applications for VA home loans without regard to the race, color,
religion, sex, handicap, family status or national origin of the veteran. In addition,
the Equal Credit Opportunity Act prohibits a lender from discriminating against an applicant
on the basis of the foregoing, or on the basis of age or marital status; because an applicant's
income derives from any public assistance program; or because the applicant has exercised any
right under the Consumer Credit Protection Act. Lenders are also prohibited from discouraging
applications on these grounds, and, to ensure that each applicant is fully aware of his or
her rights under the Equal Credit Opportunity Act, a lender must provide each applicant
with the Equal Credit Opportunity Act Notice and a written statement of reasons when
credit is denied.
Therefore, if you are seeking to use your entitlement to buy a home, you may be assured that
VA will protect your civil rights and equal housing opportunity.
The following actions, when based on discrimination because of race, color, religion, sex,
handicap, family status, or national origin. are recognized violations of the Federal Fair
Housing Law:
- Refusal to negotiate to sell property;
- Discrimination in terms or conditions of sale of real property;
- Advertising indicating any racial, religious, ethnic, or gender preference;
- False representations that real property is not available for inspection or sale;
- Blockbusting or inducing owners to sell real property by representations regarding entry into the neighborhood of persons of a particular race, color, religion, sex, handicap, family status, or national origin for profit; and
- Discrimination in financing, terms or conditions of a loan, or denying a loan.
If you experience or suspect discrimination by a builder, broker or lender, the local VA office
will investigate. To start a VA investigation, submit a written complaint directly to the local
VA office. Your complaint must describe the discriminatory action including the date it occurred,
names, addresses, and telephone numbers of all parties involved in the action, and the address of
the property involved. VA has a form for this purpose (VA Form 26-8827, Housing Discrimination
Complaint) which you may request from your local VA office.
You should note that in many localities fair housing associations have been organized to assist
you in locating and purchasing a house of your choice. There may be such an organization
in your area.
When the alleged discrimination concerns HUD/FHA (Department of Housing and Urban Development/Federal
Housing Administration) home loans and other housing, complaint letters should be sent to the
Department of Housing and Urban Development, Assistant Secretary for Equal Opportunity,
Washington. D.C. 20410.
OTHER HOUSING OPPORTUNITIES
If you are unable to find new homes available for sale with VA financing in your area, or
if you are unable to determine whether particular homes being built are available for sale
with VA financing, the local VA regional office may be able to assist you. In addition, in
many areas VA has repossessed homes which it will sell to qualified buyers. Inquiry as to
the availability of any VA repossessed homes for sale in the area in which you are interested
may be made by contacting local real estate brokers.
Another area to be explored is State benefits. Many States offer housing programs which are
independent from federal programs. The programs and benefits, as well as the qualifying
criteria, may differ from one State to the next. Information on State programs may be
obtained from State officials or from the local VA regional office.
The Real Estate Settlement Procedures Act requires the lender to give you a good faith estimate
of the cost of closing within 3 business days after taking your loan application. The cost of
individual items included in a given transaction may vary a good deal throughout the nation
because of differing local laws and customs. Closing costs may also vary among lenders and
you may wish to compare the closing costs charged by different lenders before applying for
the loan.
In addition to the downpayment and closing costs, don't forget to allow for any expenses you will have
for moving and for furnishings and equipment at the time you move into your new home, as well as a
reserve for emergencies. It should be remembered, however, that the more you are able to pay as a
downpayment, the less interest you will have to pay over the life of the loan.
FREQUENTLY ASKED QUESTION # 30 [ -more VA Loan questions- ]
- - - - - -
Q: Improving Credit - How can I help myself before applying for a VA home loan?
A: Because your VA loan eligibility depends on your debt ratio, it's a good idea to start thinking about fixing your credit long before actually filling out loan paperwork. The best way to help yourself out is to follow the advice of a credit counselor, but you can also take steps on your own to increase your eligibility for a VA home loan. Eliminate as much credit card debt as possible. If you can get yourself down to a single card and stay that way for six months, you will be well on your way to improving your debt ratio and your credit rating. Remember that the maximum debt ratio allowed for approval is 41%, and that your credit rating is also a factor. If you are within a few months of paying off a major debt such as an automobile loan, do so as quickly as possible. You'll most likely need to allow for credit reporting agencies to "catch up" with your newly paid off cards and loans.
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