Plentiful Deals for Home Buying Veterans Who Dig

By Doug Oakley
Staff Writer
DANVILLE -- As a Navy veteran who served in Vietnam, Paul Conner didn't know that his physical disability qualified him for a break on his property taxes or that he could get a home loan with no down payment, courtesy of Uncle Sam. 

The 72-year-old Richmond veteran is not alone. Many veterans don't know there are homeownership and credit card programs available to them. 

Conner had heard about the Veterans Affairs loan program but didn't know the details until he dropped into the Veterans Housing Summit in Danville on Saturday, hosted by the Bay Area chapter of the Veterans Association of Real Estate Professionals. 

"Everybody talks about how we've served and the pitfalls of being disabled," said Conner, who uses a cane to compensate for his weak knees and ankles. "I'm trying to find out some of the programs they are offering that could benefit us." 

Conner said he wants to refinance his Richmond home using a VA loan, but it's been hard finding the right lender who knows the product. 

Joe Jacobs, a Sonoma County real estate agent who works with vets and who spoke at the summit, said it's just a matter of finding the right people to work with. 

"If you're a vet and you're looking to buy a home, you need to find both a real estate agent and a lender who have experience doing VA loans," Jacobs said. "And make sure there is good communication between your agent and the bank." 

Catherine Banks, a Marines corporal from 1988 to 1992 who organized Saturday's event, agreed that vets need to find a bank familiar with the VA loans. 

"There is some discrimination in VA lending and getting offers," said Banks, who is a loan officer in Santa Rosa. "Sometimes, if a veteran has a VA preapproved loan, that loan may be put on the bottom of the pile." 

The biggest benefit of VA loans is the no-down-payment feature. But it also comes with lower interest rates, which currently range between 3.6 and 4 percent, Jacobs said. It also has low closing costs, no mortgage insurance if there is no down payment, and it can be applied to single-family homes, two- to four-unit apartment buildings, manufactured housing and condominiums. 

If the homebuyer wants to make a down payment, a gift of money from someone else can be used. 

Banks said her national organization has a program, which she hopes to bring to the Bay Area, in which banks donate dilapidated, foreclosed homes to qualified vets for free. 

"When the bank gives them to us, we go in and rehab them and make them livable through volunteer donations," Banks said. 

The nationwide Mortgage Free Property Donation program requires vets or their surviving spouses to have enough money for utility bills and property taxes, and they have to complete a three-year financial literacy course. 

Financial literacy is probably the single biggest barrier between vets and homeownership, Banks said. 

"If you go into the military and you're 17 and you live on base, you're not paying rent, and when you come out, you're still not adjusted, and some people may still be living in the world of combat," Banks said. 

Porus Engineer, director of operations for National Budget Planners, a free nonprofit credit-counseling service, said vets need to first get educated on the basics then dig for the deals available to them. 

"The problem is that while they were away, they put things on their credit card, and they didn't know how to manage the debt when they got out," Engineer said. "They may not know, for example, that every credit card company has a program where they will reduce your interest rate, so if it's at 18 percent, it could be reduced to 9 percent or even lower."