Buying a home in Minnesota as a veteran or service member

Do you need a “VA realtor”?

No. A VA home loan comes from a private lender, such as a bank, credit union or mortgage company, and VA guarantees part of it. VA doesn’t assign, approve or certify real estate agents, so you can work with any licensed agent you choose.

What you want is an agent who has closed VA purchases and knows the details that come up: how the VA appraisal works, asking the seller to pay closing costs, and how to make a VA offer as strong as a conventional one when several buyers want the same home.

How a VA home loan works

From VA’s own page on purchase loans:

• No down payment as long as the sale price isn’t higher than the appraised value.
• No private mortgage insurance (PMI or MIP).
• Limited closing costs, and the seller may pay some of them.
• A VA funding fee may apply; some borrowers, such as many with a service-connected disability, don’t pay it.
• You need a Certificate of Eligibility (COE), which your lender can usually get for you, and you must plan to live in the home.

VA loans can be used more than once, and your lender sets its own credit and income requirements on top of VA’s.

Writing a VA offer that wins

• Get pre-approved first with a lender who closes VA loans often, so the seller sees a lender who knows the program.
• Plan for the appraisal. If the VA appraisal comes in below your price, you can renegotiate, pay the difference in cash, or cancel under the VA clause in your purchase agreement. In a competitive situation, deciding ahead of time how much of a gap you could cover makes your offer stronger.
• Ask for seller-paid closing costs when the market allows it, which keeps more cash in your pocket.
• Watch the condition. A VA appraiser also checks that the home is safe and sound, so a home that needs major repairs can be harder to buy with a VA loan; we’ll flag those before you write.

Minnesota property tax help for disabled veterans

Minnesota’s Disabled Veterans’ Market Value Exclusion lowers the taxable value of your homestead:

• $150,000 excluded for a service-connected disability rating of 70% or more.
• $300,000 excluded for a 100% total and permanent disability rating.

A surviving spouse, and in some cases a primary family caregiver, can also qualify. The home must be your homestead, and you apply to your county assessor; applications are due by December 31 for taxes payable the next year. Check the Minnesota Department of Revenue page below for the current rules and form.

USAA Agent Connection and other bank programs

USAA’s home-buying program today is USAA Agent Connection, powered by HomeStory. Members are matched with an agent in HomeStory’s network and can get a credit at closing, paid out of the agent’s commission; USAA says the credit depends on the home’s price and can’t exceed $9,500 per transaction. You don’t need USAA financing to use it. HomeStory runs similar programs for other banks and credit unions.

The credit only applies with an agent in that network, so ask any agent you’re considering whether they take part. Either way, compare the credit with what the agent will do for you on price and terms: on most homes, negotiating well is worth more than a closing credit.