How Legal Gay Marriage Will Effect Getting VA Loans

When the Supreme Court handed down their landmark decision on June 26, 2015, that reversed the Sixth Circuit Court of Appeals’ decision in Obergefell v. Hodges and effectively made same-sex marriage legal in all states, it affected more than just LGBT couples. It also affected the mortgage market in a number of ways.

images (1)The first is that now same-sex couples can legally marry in any state, and those marriages are recognized throughout the U.S. This means that they now have all of the same rights as opposite-sex couples, including the right to hold property together. It’s now much easier for same-sex couples to apply for mortgages and get financing because lenders have always favored married couples over two single people applying for a mortgage jointly. Many experts expect to see more LGBT couples make the move from renters to homeowners in the very near future. Those who did purchase a home as two single individuals and are now married may also look to refinance their mortgages.

Couples who are married also have a tendency to feel more secure and stable. The results from a number of surveys show that single people, even those in a long-term relationship, feel like purchasing a home is something that’s done only after marriage. The fact that more same-sex couples can now legally married is expected to result in a number of new homeowners.

Another advantage that comes with the Supreme Court decision is the fact that same-sex married couples will be able to make use of the mortgage program offered by the Department of Veterans Affairs. Prior to this, the VA only provided benefits to same-sex couples who lived in states where those marriages were legal. Now veterans across the country will be able to add their spouses to their mortgages no matter what state they live in.

There will also no longer be any question about inheritance or title issues. Prior to this decision, the many different laws across the country regarding same-sex couples and their right to marry created a patchwork of different rules and regulations regarding property ownership and inheritance. Those issues are now gone, and same-sex couples can be treated exactly the same as opposite-sex couples. Spouses no longer have to create extra paperwork or go out of their way to make certain the title to their property is worded in such a way that there can be no challenge to who inherits the property if one of them dies.

 

Dear Gay Realtor – Can my same sex Veteran husband and I obtain a VA loan together?

Whether you can obtain a VA loan with your same sex Veteran husband depends on a number of factors. The Veteran’s Administration, VA, issued Circular 26-13-18 in September 2013 in response to the President of the United State’s directive that the Executive Branch stop enforcement of the statutory language in Title 38, U.S. Code, defining spouse as someone of the opposite sex. The VA stated in that circular that it would determine whether same sex married couples qualify for a loan on a case-by-case basis.

RE101The VA sent another circular to its participating lenders that provided guidance on this issue. It stated that its loan procedures might depend on location since not all states recognize same sex marriages. Federal statutes governing veteran’s benefits dictate that a valid marriage depends on the law in the state where the parties resided when they married or where they resided when a right to benefits accrued.

According to Lambda Legal, a nonprofit legal organization who advocates for LGBT civil rights, if the state that you live in does not recognize same sex marriage and you continue to live in a non-recognition state, your marriage will probably be ruled as invalid for the purposes of VA benefits. The Department of Veteran’s Affairs in affiliation with the Department of Justice is expected to address the limitations on marriage recognition in the future.

In its guidance circular, the VA stated that where same sex couples do not quality for a loan, applying for a joint loan might be the remedy. Joint loans are made to a veteran and another non-veteran person that is not his or her spouse. In those cases, the VA will only guaranty approximately 40 percent of the loan amount. The affect this will have on a loan depends on the lenders guidelines.

If you have questions about applying for a loan, the VA suggested that borrowers contact them or a qualifying lender. If you are denied benefits, you should contact an attorney who is knowledgeable about VA benefits and same sex couples.