DC Lobbying Wins! VA Allows Buyer Agent Payment, FHFA Confirms NAR Settlement Interpretations

"The United States Department of Veterans Affairs will soon release a circular that 'bridges the gap' on an agency law that prohibits a VA buyer from paying their real estate agent compensation, a VA official announced on Tuesday," reported Housing Wire. "Michelle Corridon, deputy policy director at the VA, announced at the Mortgage Bankers Association‘s Secondary & Capital Markets Conference in New York that the circular would be issued between now and June 12. The circular would be issued while the agency engaged in a formal rulemaking process."

LIBOR members who attended this month's NAR's REALTOR® Legislative Meetings helped advocate for the VA to make these changes around buyer broker compensation: “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,” Shannon McGahn, the chief advocacy officer at NAR, said in a statement. “This is also a testament to the thousands of REALTORS® who came to Washington just a few weeks ago with a unified message. Without this change, thousands of veteran buyers could be denied access to professional representation in pursuing the American Dream of homeownership. This extra step ensures veterans have the same opportunity as others to compete in a tight housing market. We applaud the VA for recognizing this danger and acting swiftly to protect veterans."

The Federal Housing Finance Agency (FHFA) recently sent a letter to NAR confirming that both Fannie Mae and Freddie Mac published explicit confirmations on April 15, 2024, that buyers whose agent is compensated by the seller will continue to have access to financing through those institutions. Furthermore, so long as it remains "customary" by "local convention" for the seller to pay commissions, those will not be added to the interest party contributions (IPC) and subject to the caps on IPCs. Interpretation of this rule under the proposed settlement was of great concern, and NAR wrote to Fannie Mae, Freddie Mac, and the FHA seeking confirmation of NAR's interpretation. In a letter to NAR, FHA confirmed that this interpretation does hold. Learn more HERE.