Understanding Challenges For VA Borrowers

NewDay USA made headlines recently when it launched the Admiral Certification program, a first-of-its-kind national credential for real estate agents who serve Veterans and Service Members looking to buy a home. In today’s competitive real estate market, Veterans and Service Members seeking to achieve the dream of homeownership have faced unseen bias and outdated misconceptions about the VA Home Loan benefit. These barriers – from agents discouraging sellers from accepting their offers to confusion over eligibility and financing – have delayed or indefinitely deferred homeownership for our nation’s heroes. The Admiral Certification Program was created to change that. We talked with Admiral Thomas Lynch, Chair of NewDay USA, about the state of VA lending. Here’s what he told us:

Q: Given that VA mortgage are 100% LTV, why would a military borrower need to cash to close?

ADMIRAL THOMAS LYNCH: There’s a common misconception that “no down payment” means “no cash required.” VA loans are 100% loan-to-value, but that doesn’t eliminate closing costs, prepaid items like insurance and taxes, or earnest money deposits. In today’s competitive housing market, those upfront costs can be a significant barrier, often so high that Veterans are pushed out of the homebuying process entirely. Veterans may not need to pay a down payment, but they do need funds to get to the closing table. That gap is where many otherwise qualified borrowers get stuck.

Q: How much money for closing is typically needed for a $400,000 property?

ADMIRAL THOMAS LYNCH: It varies by market, but buyers can typically expect to bring between $12,000 and $20,000 (3% – 5%) to closing on a $400,000 home. That includes closing costs, prepaid items, and reserves. In some high-cost markets, it can be even higher.
Q: Does the typical active service member or Veteran have that kind of money available?

ADMIRAL THOMAS LYNCH: Again, for many, it’s not that the money isn’t there – it’s where those assets are and how they’re being used. Most Veterans and Service Members have steady income and strong credit, but they come up short on cash reserves at closing. Even when families have savings, they’re understandably cautious about pulling from emergency funds or long-term assets just to cover upfront costs. That hesitation can delay or derail a home purchase, not because they can’t afford the mortgage, but because clearing that initial hurdle can require tough financial trade-offs.

Q: Can home sellers pay these costs?

ADMIRAL THOMAS LYNCH: Yes, sellers can contribute to closing costs, but in today’s competitive market with tight inventory and multiple offers, that’s not something Veterans can reliably count on. Seller concessions are the exception, not the rule. That’s why we focus on removing that barrier by finding ways to help cover upfront and closing costs to boost Veterans’ standing and their offers.

Q: What are some solutions here?

ADMIRAL THOMAS LYNCH: One of the most effective ways to address it is by removing or significantly reducing out-of-pocket costs so borrowers can keep their savings intact and move forward with a purchase. Some programs, like those that we work on at NewDay, are designed specifically to cover upfront and closing costs. The point is to give Veterans a clear and easy path to the closing table without forcing them to drain the assets they’ve worked hard to build. For many qualified buyers, that single step is what finally makes homeownership possible.

Q: Many Veterans lose out on homes because their financing takes too long. What can be done to change that?

ADMIRAL THOMAS LYNCH: In a fast-moving market, Veterans with certainty about their financing are better able to compete. When financing drags on, Veterans can lose the homes they want because the seller isn’t confident in their ability to close. The best way to change that is to give Veteran buyers full credit and income approval at the very beginning of the process – when they start looking for a home. Full qualification is much more than mere pre-approval. Full credit and income approval removes uncertainty for sellers and helps Veterans compete on equal footing, acting like cash buyers.

That’s the approach we take at NewDay. With delegated authority from the VA, our team can complete a full approval in one hour or less.  I even have teams working on approvals over the weekend, so that Veterans can begin their home search with real confidence, knowing they’re fully qualified to make an offer and close quickly. It’s so important that I personally sign a letter that goes out with each approval, acknowledging Veterans’ service and reinforcing that we stand behind them every step of the way.

INSIDER PROFILE

Admiral Thomas Lynch is the Executive Chair of NewDay USA. Admiral Lynch retired from the U.S. Navy after a decorated 32-year career. A graduate of the U.S. Naval Academy, his Naval assignments included Chief, Navy Legislative Affairs; Commander of the Eisenhower Battle Group during Operation Desert Shield; Superintendent of the U.S. Naval Academy from 1991 to 1994 and Director of the Navy Staff at the Pentagon from 1994 to 1995.