When military staff and their families relocate, the services of a real estate professional who understands their needs and timetables makes the transfer easier, faster, and less stressful.
PCS GUIDE & MOVING CHECKLIST - PDF DOWNLOAD
HELPFUL INFO ABOUT VA FINANCING
If you're a government civilian employee you are eligible for government travel allowances when traveling from a Permanent Duty Station (PDS) OCONUS to one located in CONUS.
The following costs are reimbursable when selling or buying a home provided that the expense is customarily paid by the seller in the locality of the old duty station or by the buyer in the locality of the new duty station.
None of the following expenses will be reimbursed beyond the amount customarily paid:
- Broker's fee or real estate commission.
- Advertising and selling expenses such as newspapers, bulletin boards, multiple listing services, and appraisals.
- Legal and related costs.
- Title search.
- Tax certification fee paid by the seller to local taxing authorities to certify that all real estate taxes on the property have been paid (as distinguished from a tax service fee for researching property taxes and assessments, which is not reimbursable).
- Preparation of abstracts.
- Legal fees for title opinion.
- Preparation of conveyances or contracts.
- Notary or recording fee.
- Survey fee.
- Preparation of drawings or plats when required for legal financing purposes.
- FHA or VA loan application fee (as distinguished from a VA funding fee, which is not reimbursable.
- Loan origination fee or loan assumption fee or loan transfer fee in lieu of a loan origination fee (These are fees that compensate the lender for administrative expenses incurred in originating and processing the loan. They are reimbursed in connection with the purchase of a residence and cannot exceed 1 percent of the loan amount.)
- Cost of preparing credit reports
- Mortgage and transfer taxes
- Sales tax paid on a transaction in lieu of a transfer
- Tax on property
- Sales tax paid as a mortgage tax
- State revenue stamps
- Prepayment penalty on a mortgage of security instrument
- Mortgage title insurance when required by the lender
- Expenses in connection with the construction of a residence which are comparable to the expenses of buying an existing residence
- Lender's inspection fee for construction of a new residence
- Loan release fee charged to the seller to prepare and record the release of a mortgage obligation
- Fees for second mortgage transactions
- Expenses in obtaining a second mortgage, a refinanced mortgage, or a new mortgage on the old residence when the funds are needed to finance the new residence
- Fees to obtain title insurance on a second mortgage when it is required by the lender
- Termite, roof, or weathering inspection fees (but not repairs) when required to obtain financing or as part of the sales contract
- Water certification fee when required to obtain financing or is part of the sales contract
- Non Reimbursable Expenses
- The following costs are not reimbursable for real estate transactions.
- Owner's title insurance for personal protection and not optional insurance in connection with the purchase of residence for the employee's protection
- "Record Title" insurance policy
- Mortgage insurance
- Insurance against loss or damage of property (for example, ERA or home warranty)
- Optional insurance in connection with the purchase of a residence for the employee's protection
- Interest or discount fees on loans or points and mortgage discounts
- Loan origination fees in excess of 1 percent
- Property taxes
- Operating or maintenance costs
- Costs of restoration, carpentry, carpet-cleaning, painting, etc.
- Fees for lawn service
- Homeowner's association dues
- Front Foot Benefit or any other annual expense that is not directly related to the transfer of property from the seller to the buyer
- Any fee, cost, charge, or expense determined to be part of the finance charge under the Truth in Lending Act unless specifically authorized as a reimbursable expense
- Tax service fees to search, identify, and report property taxes and assessments on mortgaged real property
- Loan assumption fees in addition to a loan origination fee
- Tax service charges made to pro-rate the buyer's and seller's tax obligations for the year in which settlement is made
- Commitment fees to set aside funds at an agreed interest rate
- Underwriting fees for reviewing loans
- Loan tie-in fee
- Courier fees (Federal Express, UPS, etc)
- Expenses resulting from construction of a residence
- Property survey fee to establish the exterior measurements and positioning of the foundation of a residence to be built on the property
- Construction inspections
- Agricultural transfer tax
- Cost of preparing or obtaining blueprints, building Permits, etc.
- VA funding fee
- Losses due to failure to buy a residence at the new duty station at a price comparable to the selling price of a residence at the old duty station or similar losses
- Closing costs that are paid as an inducement to purchase in a "buyer's market" that would otherwise be disallowed
- Fees paid in response to market conditions and not because of customary practice (when purchasing a residence, closing costs paid by the seller for the buyer will be deducted from the total reimbursable amount of expenses claimed)
- Fees for repairs for a home to meet inspection standards, such as weatherization repairs and termite extermination
- Fees incurred for personal loans
Important Points to Know
- For expenses resulting from the purchase of a residence, the current maximum reimbursement allowed is 5% of the sale price.
- Some real estate expenses are only reimbursable for a purchase transaction and some are only reimbursable for a sale transaction. A few of the expenses are open to negotiation depending on what is customary for the location.
- Any request for an extension to the two-year limitation for real estate purposes must be submitted in writing to the authorizing personnel office prior to the expiration of the two-year period.
New VA Home Loan Limits Coming Jan. 1, 2020
A VA home loan is not the VA lending you money. Instead, the Department of Veterans Affairs "guarantees" to a lender that you, as a veteran, are a good credit risk. That guarantee allows you to get a home loan without having to make a down payment.
The average lender requires a down payment of 20% of the home purchase price before they will give you a mortgage. According to Zillow.com, the average home value in the U.S. is around $227,000. That means veterans, unlike civilian buyers, can get a home without having to pay up to a $45,000 cash payment. And now that VA guarantee may go a little bit further.
The other change that comes with the new law will affect fees for some veterans. VA charges most veterans a "funding fee" when a VA loan is issued. Veterans receiving any VA disability benefits are exempt from the funding fee. For example, the funding fee for an active-duty veteran using a VA home loan for the first time will increase from 2.15% of the purchase price to 2.35% of the price on Jan. 1, 2021. (There are different funding fees depending on the kind of loan and the situation of the borrower.)
The change, however, eliminates the funding fee for some users. Purple Heart recipients still on active duty will no longer be subject to the funding fee starting Jan. 1.
Am I Eligible for a VA Home Loan?
- The major eligibility categories for a VA home loan include:
- Veterans and service persons who have served 181 active-duty days during peacetime, unless discharged or separated from a previous qualifying period of active duty service
- Veterans who served during World War II, Korea, or Vietnam, if they served for 90 days and were honorably discharged
- If you have served for any period since August 2, 1990, you can also qualify if you have served 24 months of continuous active duty, or the full period (at least 90 days) that you were called to active duty
- Those who have completed a total of six years in the Selected Reserve or National Guard
- An un-remarried spouse of a veteran who died while in service or from a service-connected disability or a spouse of a service member missing in action or a prisoner of war. (Note: A surviving spouse who remarries on or after attaining age 57, and on or after December 16, 2003, may also be eligible for the home loan benefit.)
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