VA Issues Notice on Commissions Paid to Real Estate Agents
June 18, 2024
The U.S. Department of Veterans Affairs (VA) announced that eligible veterans, active-duty service members, and surviving spouses who use the VA-guaranteed home loan benefit can pay for certain real estate buyer-broker fees when purchasing a home beginning Aug. 10, 2024.
The update was prompted by inquiries concerning the settlement agreement by the National Association of Realtors in the Burnett et al and Moehrl et al cases. In a release, the VA said the temporary measures will help ensure that veterans are not negatively impacted by the class-action settlement. VA will continue to monitor how the settlement affects the brokerage market and looks forward to pursuing a rulemaking.
In April, Fannie Mae and Freddie Mac both issued industry notices on April 15 addressing the current treatment of buyer real estate agent fees paid by the seller.
Under Freddie Mac’s interested party contribution requirements (Guide Section 5501.5), property sellers are permitted to make financing concessions toward the borrower’s closing costs in maximum amounts between 2% and 9% of the property value. Fees or costs customarily paid by the property seller according to local convention are not subject to these financing concessions limits. Buyer agent fees have historically been fees customarily paid by the property seller or property seller’s real estate agent, and, as such, they are currently excluded from these financing concession limits. If these fees continue to be customarily paid by the property seller according to local convention, they will not be subject to financing concessions limits.
Fannie Mae's Seller Guide includes similar language.
Contact ALTA at 202-296-3671 or [email protected].