Military enlist in real estate

The number of homes purchased in Nevada by military personnel using VA loans funded by USAA jumped 360 percent this year and refinancings are up 250 percent, the San Antonio-based financial services company reported.

Across the country, home purchases backed by Veterans Affairs increased by more than 100 percent. Active-duty military, retirees and reservists are taking advantage of a perceived buyer's market, with some becoming homeowners for the first time, USAA financial planner Joseph Montanaro said.

Some pockets of the country such as Nevada, northern Virginia and San Diego are seeing dramatically higher increases than others, he said.

"Is it a good time to buy? Clearly, a lot of people are answering, 'Yes,'" Montanaro said. "Interest rates are historically low, home prices have taken a beating and so it's much more attractive."

Another incentive is the first-time homebuyer tax credit of $8,000, which ends Dec. 1, he said.

Gary Adkin has been approved for a $250,000 loan by the VA and has spent several months looking for a home, ideally a foreclosure or short-sale in the $170,000-to-$200,000 range.

He's made several offers, often outbid by investors with cash.

"It's really frustrating," said Adkin, who served in the U.S. Navy from 1965-72. "I'm qualified, the loan's pending. It's just finding a house. Every time we get in escrow, something happens and it goes bad. Last time, we had a home inspection done and found out the people didn't disclose a problem with the house."

VA purchases have definitely picked up after a bit of a lull, Elie Morris of Realty Executives in Las Vegas said. He counted 1,405 such home sales in the last six months.

"It is a trend because conventional loans are almost nonexistent," Morris said. "The only loans going through right now are (Federal Housing Administration) FHA and VA."

With its warm climate and relatively inexpensive housing, Las Vegas is a desirable location for lots of retirees, including some from Nellis Air Force Base, Morris said.

USAA, founded in 1922 by a group of U.S. Army officers to self-insure themselves, reported assets of $68.3 billion in 2008 and net worth of $14.6 billion. The Fortune 500 company earned $423 million in net income in a year when most financial services posted record losses and the S&P 500 dropped by 37 percent.

"Obviously, the VA guarantee makes lenders more willing," Montanaro said. "On the buyer's side, they have the advantage of no down payment, so they can keep some powder dry if they need it later."

He said military buyers still have to crunch the numbers. They need to evaluate any contingencies such as their employment situation, whether they'll be moving anywhere or any change in marital status.

Mark Stark, owner and broker of Prudential Americana, said he's absolutely seeing an uptick in homebuyers from the military.

"It's a great opportunity to use their VA loan," Stark said. "Many times, they can get the first-time homebuyer credit. With no money down and the lowest prices in a while and low interest, you don't have to twist their arms."

Home sales have increased by 75 percent in Las Vegas through the first half of the year with more than 3,000 closings in each of the last four months, SalesTraq research firm reported.

Stark said 38 percent of those sales are going to investors and most are cash transactions on the low end. He just sold a home last week for $22,000.

The government needs to do more to help all homebuyers, Stark said. He'd like to know why the tax credit can't be given to everyone, not just first-time buyers.

"That's the biggest message. I know they're talking about $15,000 (credit) for everyone, but they'd better come out with something," he said.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.