House Bill Seeks to Extend VA Loans to Co-op Buyers

February 21, 2020

A new bill introduced in the U.S. House of Representatives this week aims to permanently make co-op buyers eligible for mortgages that are backed by the Department of Veterans Affairs.

“In New York City, co-ops are ubiquitous, and our veterans shouldn’t be priced out of these housing options because they’re excluded from the VA’s loan program,” says Rep. Carolyn Maloney (D-N.Y.), who introduced the Fair Access to Co-Ops for Veterans Act with Rep. Eleanor Homes Norton (D-D.C.). “Wherever veterans want to buy a home—whether in rural or urban areas—they should have equal loan support from the VA.”

Congress had approved legislation that offered a five-year pilot program allowing veterans to use the VA program to purchase co-op housing. But the pilot program expired in 2011 and has not been renewed. Some officials said the program didn’t garner enough demand to warrant a renewal. However, the lack of interest at the time may have been due to the housing crash and Great Recession, Chris Birk, director of education for Veterans United, told HousingWire. He adds that whether there is a demand for such a program remains a question because of the timing of the pilot program.

If approved, vets could have more money to put toward co-ops. Beginning at the start of the year, loan limits were removed from VA-backed mortgages. Birk told HousingWire that could help increase demand for co-op mortgages in places like New York, where home prices tend to be much higher than the rest of the country. The median price of a co-op in Manhattan was $795,000 in the fourth quarter.

The Fair Access to Co-Ops for Veterans Act, which the National Association of REALTORS® supports, seeks to make a program permanent that will allow vets to use VA loans to purchase co-ops. It also directs the VA to advertise the program to eligible veterans, real estate pros, and lenders.

Source: 
House Bill Would Extend VA Loans to Co-ops,” HousingWire (Feb. 20, 2020)