For years, a VA-backed offer was the one many sellers hoped not to receive. These mortgages, which the U.S. Department of Veterans Affairs guarantees for eligible service members and veterans, had a reputation for tough appraisals, repair demands and deals that collapsed close to the finish line. In today’s market, that reputation is fading.
“That stigma is gone,” says Tammy Melendez, who co-owns the Melendez Real Estate Group, a brokerage in the Keller and North Fort Worth area of Texas, with her husband, Julio, a veteran.
The change reflects the wider market as much as the loans. With fewer active buyers and sellers competing for every qualified offer, a loan type that once made sellers nervous has become a dependable route to closing.
When the couple bought their first home, Melendez recalls, few sellers wanted a VA buyer. The worry was the appraisal. Beyond estimating a home’s value, a VA appraiser checks that the property meets the agency’s minimum standards for safety and condition. Sellers feared a late list of required repairs, or a valuation below the agreed price, which can force a renegotiation or sink the deal.
Two things have changed. Her team, which is certified to work with military buyers, now spots likely problems, such as wood rot, before writing an offer and works through them with the seller up front.
The market has also lowered the risk. Buyers are generally paying less than asking price, so the agreed price usually sits within the appraised value. Melendez says her recent VA deals have closed without appraisal conditions, meaning no required fixes, and many buyers have gained equity at closing because the home appraised for more than they paid. She has not had a seller object to a VA offer this year.
Because the government backs part of each loan, lenders take on less risk, and VA loans typically carry lower interest rates than conventional mortgages. They also skip monthly mortgage insurance, a charge conventional borrowers pay when they make a small down payment, even when VA buyers put little or nothing down. Together, those features can meaningfully lower a monthly payment.
“The interest rates are lower for our VA buyers,” Melendez says. “So if they can do it, do it.”
The loans do carry a one-time funding fee, which can be added to the loan balance, though veterans with service-connected disabilities are generally exempt.
VA loans can also be assumed, meaning a qualified buyer takes over the seller’s existing mortgage and its interest rate instead of getting a new loan at today’s rates. Sellers who locked in low rates during the pandemic, Melendez among them, are using that as a selling point.
It is not easy. “It takes an act of Congress to get an assumable closed,” she says. Both the lender and the VA must sign off, and the buyer has to qualify. Sellers should also understand that their VA benefit, known as entitlement, generally stays tied to the loan until it is paid off, unless the buyer is a veteran who uses their own entitlement in its place.
Many of Melendez’s VA buyers are relocating from out of state, often from the Northeast, and buying both new and existing homes. More of them now find her brokerage online. She says the military focus of her website helps search engines and AI tools point veterans her way.
Relocation shapes the wider buyer pool too. Julio Melendez notes that North Texas draws steady transfers from employers such as Bell Helicopter, Lockheed Martin, and government agencies. For those households, he says, the question is not whether it is a good time to buy but where work takes them.
The VA segment stands out because first-time buyers are struggling. Melendez says starter homes are sitting far longer than she expected, even when they are attractive and well-priced. “We’re struggling to get first-time home buyers in the game,” she says. Higher rates add hundreds of dollars to a monthly payment, and small down payments bring mortgage insurance on top.
Pricier homes are moving faster, particularly in sought-after suburbs such as Keller, Southlake, Colleyville and Grapevine, where one of her buyers has met competing offers on every home they have pursued. Move-up buyers, who have sold before and carried higher rates in the past, are less deterred.
The year began strongly, Melendez says, with buyers returning for listings that had been sitting, before activity slowed sharply in early summer. Homes now take longer to sell, and her brokerage has lengthened its standard listing agreements.
Builders feel the same pressure. A large builder Melendez spoke with described entry-level demand as “crickets,” and new-home incentives are common, from help with closing costs to rate buydowns, in which an upfront payment lowers the buyer’s interest rate.
Resale sellers often lack the equity to match those incentives alone, so Melendez’s team shares the cost: the seller, the team and its partner lender each contribute to a buydown. Sellers are also routinely covering buyers’ closing costs, handling reasonable repairs and accepting price reductions. Her team now lists homes slightly below market value to sell sooner instead of cutting prices over many months. Recent buyers face the toughest math, she adds, since those who bought in the past couple of years may have built little equity and may need to bring money to closing.
Many owners simply have no reason to move. Melendez says most of her current buyers need to relocate rather than want a change, and owners holding an unusually low mortgage rate are staying where they are.
Julio Melendez points to a generational factor: parents who refinanced at pandemic-era lows often tell their children to wait for rates to fall, though they once paid much higher rates themselves. The team uses social media to answer those questions and help buyers focus on what they can afford each month.
Melendez says the most common view in comments on her team’s videos is that homes are overpriced and a crash is coming. She disagrees. Values in her area are still rising, she says, and she expects that when rates eventually fall, prices will climb and buyers will lose the leverage they have now. The end of the year, she adds, is the best season to buy.
“It’s a great time to be a home buyer,” she says. “If buyers only knew the deals and the things that are being offered.”
About The Expert: Tammy Melendez co-owns the Melendez Real Estate Group, a residential brokerage in the Keller and North Fort Worth, Texas, area, with her husband, Julio. She has worked in real estate for 15 years and is a certified military residential specialist.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
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