San Diego Real Estate - Demand for VA loans is on the rise in San Diego.
For a lot of years, the VA loans had such a low loan limit, they didn't work too well for most homes or even condominiums here in San Diego.
This past year, with significant higher loan amounts of up to $593,750,the new loan limit is well above the median home price now in San Diego. There has been a real surge in VA loan requests. The VA insured loan purchases this past year represent between 9% and 10% of all the sales of single-family homes.
MDA DataQuick, here in San Diego, reported an interesting statistic on loan failure rates associated for VA insured loans. In San Diego County, VA insured loans failure rate stood at 4.3%. This compares more favorably to the other failure rates, Subprime loans failed at a rate of 29%, FHA loans at 7% and Conventional loans failed at 5%.
There have been numerous accounts through our network of real estate professionals working here in San Diego to say that some buyers with VA insured loans are having a more difficult time in getting VA offers accepted. Some of the reasons cited were that Sellers were resistant to pay the required mandated fees normally paid by the seller, appraisals are conducted with more scrutiny and Sellers must have the home in move-in ready condition (meaning, sellers are required to make significantly more repairs if escrows are to close).
Since many of our home sales are centered around distressed property, the Short Sale Sellers don't have the resources to make the property ready since they are already upside down and REO Lenders sell their property "as is" and Va financing is certainly not the best for this category of property. But these properties are priced most within the realistic budgets and VA Buyers get frustrated trying to make a deal work.
In a recent post I wrote about the proposed First-time Homebuyers Federal Tax Credit extension for veterans, Congress has before them a bill supported by the chairman of the House Ways and Means Committee to provide an extension of the federal tax credit to veterans that have at least 90 days overseas duty.
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Copyright 2009 William Johnson author of The Real Estate Text Book
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If this bill is approved by Congress, it will also help to further increase the demand for VA insured loans , not justhere in san Diego but wherever the Veterans chose to live. And if the amendment that was offered goes along with the original Bill and is enacted, those currently on active duty would get an additional benefit. If they are re-assigned to another base for duty, they would not lose the tax credit benefit if they have to sell the home before the mandated minimum of 36 months of holding ownership as their primary residence.
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