NAR Calls on VA to Implement 203(k) Renovation Pilot Program
The National Association of REALTORS® (NAR) President Moe Veissi sent a letter to the US Department of Veterans Affairs (VA) Secretary Eric Shinski asking the agency to offer a Veterans Renovation Pilot Program similar to the Federal Housing Administration’s (FHA) 203(k) Program. The pilot would be run through VA’s Loan Guaranty Program. Like FHA’s 203(k) Program, the pilot will promote homeownership and will be an important tool for community and neighborhood revitalization and stabilization.
Under the Veterans Renovation Pilot Program, veterans would use their guaranty to purchase single family homes in need of renovation and repair. The borrower gets just one mortgage loan, at a long-term fixed rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. Renovations should be completed only by licensed and bonded contractors.
The Veterans Renovation Pilot Program would be offered in all markets, especially those with a high concentration of veterans. Such a program today would be very useful in dealing with the supply of Real Estate Owned (REO) properties. The program would also be effective in areas with a large stock of older homes in need of renovation, just as the FHA program has been for years.