'The veteran will lose every time': Why military families struggle to compete in housing market

WISCONSIN (CBS 58) -- During the pandemic, the housing market boomed, but it became more difficult for veterans to buy.

Andrew Buczkowski retired from the military in August of 2020 after 12 years of service. He married his wife, Stephanie, just a few months later.

In November, the couple found out they were expecting a baby girl.

“When we found out Stephanie was pregnant, I was like we can’t live in an apartment anymore,” Andrew said.

The couple already has a 7-year-old son.

“It was important for us to get settled, for him to stay in one place, grow roots, so he can make friends,” Stephanie said.

Roots that neither one of them ever had.

“We grew up renting,” Andrew said.

Andrew and Stephanie got pre-approved for a VA home loan. It’s a program that lets vets buy with no down payment, no private mortgage insurance and lower interest rates.

“Honestly it’s probably the biggest benefit the VA gives you,” Andrew said.

Chris Birk is the vice president of mortgage insight at Veterans United, the largest VA purchase lender. He says last year was the biggest year for VA loans as more people look to buy.

In Milwaukee, during the first half of fiscal year 2021, VA loans to purchase were up 13 percent compared to the first half of fiscal year 2020.

“The heart of this benefit was the idea that they're giving up the chance to build credit and savings to defend our freedoms,” Birk said.

But the market is competitive and in this competition, veterans are losing.

“If you’re competing against conventional or cash, the veteran is going to lose every time,” said Beth Jaworksi, a realtor with Shorewest Realtors.

Jaworski didn't work with the Buczkowskis, but does work with veterans. She says misconceptions about the loans scare sellers away.

“One of them is that because it's a government backed program, it’s going to take longer, which is not actually true,” Jaworski said.

Birk says 20 years ago these loans did take longer, but not anymore. He adds in April, VA loans closed just four days later than conventional loans

“The VA has invested so much in automation and technology to help VA loans better compete in today's marketplace, and that's why you see so many veterans turning to this benefit,” Birk said.

Another thing making sellers wary is the appraisal process. VA appraisers can issue work orders for things like peeling paint on the exterior and handrails. It all has to be fixed and re-inspected before closing. Many sellers don't want to deal with it.

“It's tough to hear,” Birk said. “We know it's happening in markets across the country.”

After several failed offers, the Buczkowskis were at an open house and realized what they were up against.

“Our realtor asked, 'hey do you work with the VA home loan?'” Stephanie said. “And the seller’s agent was like 'ehh, we could do it.' And the way he said it, you could tell it was not the most preferred loan out there.”

They didn't get that house either.

“I’m having a child, which I think would be the biggest stressor, but this was the biggest stressful thing in my life,” Andrew said.

Jaworski says she has clients who are veterans and they're just waiting for the market to calm down. She has another client who decided not to use his VA benefit and just pay more.

“The loan officer was beside herself, couldn't we change it, because it cost him over $100 a month,” Jaworski said.

With the baby coming in August, the Buczkowskis were about to give up and find another apartment. Then they walked into one more home.

“I was standing right there and Stephanie walked in and she was like, ‘wow,’” Andrew said.

They decided to try one more offer. Their realtor asked the sellers’ agent if it would be okay to write a letter. The agent said yes.

Stephanie sat down and started the letter by explaining their situation.

“Dear homeowner, my name is Stephanie. My husband has just left the Army after 12 years and is ready to raise our family in a home where he doesn’t have to worry about moving and uprooting,” Stephanie wrote.

It worked. Their offer was accepted because the sellers, too, are a veteran family.

“What we were looking for in a house and a seller is what they were looking for in a buyer, so it worked out, but not everyone is going to have that luck, unfortunately,” Stephanie said.

Jaworski says it shouldn't be so difficult.

“I think realtors really need to bind together to work with the federal government to do a little revamp on this program,” Jaworski said.

She says that could include providing motivation for sellers.

“They may pay some closing costs, pay the year's taxes, pay the title policy, do something that way,” Jaworski said. “Or do something with the peeling paint requirement.”

Birk says there also needs to be more education for civilians and real estate agents about how the program works.

“To not let veterans compete using their benefit seems like a disservice considering all they've done for us,” Birk said.

Meanwhile, Andrew and Stephanie just moved into their new home and are preparing the nursery. They are excited to provide something for their kids that they never had: a place to call their own.

“It’s kind of like that American dream,” Andrew said.