VA Signals Temporary Suspension of Buyer Agent Payment Ban

Official says the department will temporarily allow VA buyers to directly compensate their agent.

The Department of Veterans Affairs (VA) announced at a Mortgage Bankers Association conference in New York that it will temporarily lift its ban on buyers directly paying for professional real estate representation. This change, pending a formal rulemaking process, was announced by Michelle Corridon, VA Deputy Director of Policy.

The real estate industry welcomed this news, as the VA’s home loan guaranty program is the only one prohibiting buyers from paying for representation. This rule has limited veteran buyers’ options when listing brokers do not offer compensation to the buyer’s agent, often leaving veterans without professional representation or forcing them into less favorable loan products.

Shannon McGahn, Chief Advocacy Officer at the National Association of REALTORS® (NAR), praised the decision, stating, “NAR launched an all-hands advocacy effort on this issue, meeting with VA officials, engaging with lawmakers and rallying our industry partners to ensure this prohibition was lifted. Without this change, thousands of veteran buyers could be denied access to professional representation in their pursuit of the American Dream of homeownership. Taking this extra step ensures veterans have the same opportunity as others to compete in a tight housing market.”

Currently, VA policy prohibits veteran buyers using their VA loan benefit from being charged a brokerage fee or commission for real estate professional services. This policy conflicts with NAR’s proposed settlement agreement, which requires listing brokers to stop offering compensation on the MLS and mandates written agreements outlining buyer representative compensation.

In late March, NAR sent a letter to the VA urging a policy change to ensure veterans retain access to the VA home loan program. The letter highlighted that without compensation offers, VA buyers might have to forgo professional representation, lose out on properties, opt for different loan products, or leave the market entirely. NAR emphasized the importance of keeping VA buyers active in the real estate market to help them achieve homeownership.

Source: National Association of REATLORS®