'Such a good product – but so misunderstood': VA loan confusion costs veterans big

Just 13% of American vets have ever touched their VA loan benefit

'Such a good product – but so misunderstood': VA loan confusion costs veterans big

Despite the rise in VA loan options across the US, research from NLC loans found that just 13% of American veterans have ever used their VA loan benefit. What’s more, one third of veterans are totally unaware of what benefits they actually have access to or how to use them.

For Paul Carson (pictured), the importance of VA loans is deeply rooted in his own past. Having grown up as the son of an Air Force veteran, he was intrigued and somewhat confused as to why his father never took up the VA loan system – something that’s really gone on to define his career as the co-founder of Philadelphia Mortgage Brokers.

Speaking to MPA, he said that his father’s reticence to take advantage of the VA loan system was indicative of a more widespread problem plaguing the US housing market.

‘Such a good product – so misunderstood’

“Prior to my father passing away in 2016, I helped him sell his home to move into an assisted living facility,” Carson said. “He had made a lot of bad decisions along the way, but he had never gotten a VA loan. I was intrigued as to why such a good loan product is so often misunderstood. I wanted to get really good at this because if you could help one person use a loan that they didn’t realize they could use, it opens up the door for them.”

This reluctance to use the VA system could be down to a lack of understanding as to how it actually works, with a recent feature in Spectrum News indicating that neither the veteran nor the realtor are sure about the guidelines.

However, for those that do dip their toes in the water, the rewards are pretty sizeable. In 2023 alone, the US Department of Veterans Affairs guaranteed a total of 400,692 loans, amounting to approximately $144.6 billion, with the average VA loan settling at $360,863. And, as of May 2024, the average interest rate on a 30-year fixed VA mortgage was 6.583%, slightly lower than the national average – making them a very enticing option for service professionals. But Carson's passion for VA loans didn’t start with his Air Force father – it was during his early days as a mortgage professional that he saw their potential firsthand.

“One of my very first clients when I started in the business in the fall of 2007 was my roommate at the time," he told MPA. "He really wanted to buy a house. His credit was terrible, around 540, so we had work to do. He started hitting the phones, getting deletion letters. We ended up getting his credit up to six-something and got him into a house."

That home, purchased for $170,000 with just $1,000 down, proved a life-changing moment. As Carson explained, he bought it for less than $1 out-of-pocket. “It sounds like it’s made up – but that experience got my feet wet on VA products."

Through his years in the mortgage industry, Carson has become adept at pinpointing gaps in knowledge and saw an opportunity to fill them.

“The broker who I got my start with had never done a VA loan in 20 years," Carson said. "I asked him, ‘Why? How much harder can it be to do some additional paperwork for a veteran loan?’ That led me down the road of realizing everything is learnable. I did a number of VA trainings with loan officers from across the country, specifically learning the ins and outs of the VA product. It’s the most flexible one. If I can’t get the direct answer from one of my underwriters, I can call the regional loan center in Cleveland, get someone live on the phone, and get the right answer."

‘I prefer to talk about one thing and talk about it very well’

Operating in the Philadelphia metro area and beyond, Carson’s business spans varied markets, from starter homes to second homes at the Jersey Shore and booming warehouse areas in the Poconos.

"We see the seven-figure market. We see the entry-level, $200,000 starter home market, and everything in between," he told MPA. "But the challenge I have is I prefer to talk about one thing and talk about it very well, rather than different types of products or states. Advice matters in the real estate world. It’s not that hard if you’re resourceful and want to get the right answer versus giving people glazed-over answers that aren’t correct."

Carson’s passion for really helping people, be it through loans or education, is something that’s underpinned his whole career. As he told MPA, he thinks that all too often brokers make the mistake of being purely profit-driven, and risk losing out on that all-important human touch.

‘Too many people are too robotic in this business’

“Too many people are too robotic in this business,” Carson said. “It can be numbers-driven and rational, but it’s also a very emotional, human-based process. I think that gets overlooked. For instance, with veterans, it’s a lot of relocations. You get new assignments, and you’re moving. You’ve got a deadline, maybe one or two trips, or you’re on FaceTime looking at houses across the country. If they’re going to recommend someone, they want to know they’re going to get taken care of. They need the right loan pro that knows the VA loan inside and out and the right real estate professional who understands what they’re dealing with.”

Carson’s commitment to education extends beyond his clients to the broader industry – with his involvement with the Veterans Association of Real Estate Professionals (VA Rep) just one example.

“For about a year we were trying to launch the Philadelphia chapter of VA Rep,” he says. “It’s a phenomenal organization, but it’s also very time-intensive. It’s hard to start a company and devote a bunch of free time when you’re trying to get a business off the ground. The folks I was part of the launch chapter with, I’m all still very close with. Two real estate agents, another former real estate agent who’s now one of my AEs at one of my mortgage wholesalers – phenomenal professionals, very veteran-focused, and veterans themselves.”

And, whether working with self-employed clients, retirees, or veterans, Carson’s philosophy remains the same: tailor the approach to the individual and prioritize their peace of mind.

“It’s the willingness to learn and figure out new things and solutions,” he told MPA. “If we can be better at our jobs, make sure the numbers are good, and explain the process to predict the future for them to a high degree of certainty, we can minimize their stress. That’s what it’s all about.”