PCS Season Paves Way for VA Loans Military Home Sales

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May through August is peak PCS season. Real estate signs will soon be popping up around military communities. Reassignments can lead eligible borrowers to purchase real estate in their new locations with VA loans. It can also mean military members with relocation orders may have to move quickly. In today’s real estate market, a house may take a long time to sell. But, time is not a luxury most military members have when they get reassigned. Often, military homeowners are forced to sell fast and, depending on the market conditions, potentially at a loss.  

Servicemembers with or without VA Loans may be Compensated for Home Sale Losses

The American Recovery and Reinvestment Act (ARRA) of 2009 enables servicemembers, with or without VA loans, to be compensated for losses as a result of the depressed housing market if the home sale was forced by:

  • Position eliminated or relocated due to base closure between July 1, 2006 and September 30, 2012
  • PCS ordered between February 1, 2006 and September 30, 2010 and subject to funds availability
  • Transferred to town with specialized medical care for a combat injury

The Act also provides home sale reimbursements for certain surviving spouses of servicemembers killed in the line of duty.

ARRA Money May Provide Cash for a New VA Purchase Loan

The Secretary of Defense can use ARRA money to purchase homes directly from military members or to reimburse military personnel for losses from a forced real estate sale.& Either way, the funds can provide reassigned military members with cash for closing on a new VA purchase loan. Generally, the government will cover the difference between 95% of the appraised value at the time of purchase, and the value at the time of the relocation. The home must be a primary residence and purchased before July 1, 2006 for those affected by PCS and May 13, 2005 for those affected by base closure.

VA Home Loan Benefits and ARRA are Different

The ARRA is administered by the Department of Defense and is not to be confused with VA home loan benefits provided under the Department of Veterans Affairs. VA loans help veterans, in part, to purchase homes. The ARRA provides relief for relocated servicemembers, and may provide relief or protection from the effects of foreclosures and losses while real estate prices are down.

For more information about VA loans contact an experienced VA-approved lender. For more information about the protections provided by ARRA, contact a qualified licensed attorney.

Veterans First is a trade name of Wintrust Mortgage, a division of Barrington Bank & Trust Company, N.A., a Wintrust Community Bank. I NMLS# 449042 I Equal Housing Lender

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