Trying to buy a house with a VA loan? Here's how to do it on Long Island.

When Debra Crookendale, a former military nurse, began searching for a home four years ago, she wanted to take advantage of a perk for her time spent in the service — a Veterans Administration loan that helps vets potentially avoid a down payment and reduce their closing costs.

What she found shocked her.

The first three banks she approached didn’t want to deal with it, she said. Several real estate agents she contacted didn’t either. Some said they had never heard of the program.

“A lot of people say thank you for your service,” said Crookendale, 47, who is the nurse manager of the critical care unit at St. John's Episcopal Hospital in Far Rockaway. “But when you tell them you want to use a VA loan they say, no I don’t want that.”

It was a similar struggle for Taylor Hommen Sawyer, 28, a Marine veteran who dealt with a hesitant bank loan officer who at one point suggested she marry her boyfriend to bolster her chances of approval.

“I thought, I’m not going to get married just because you guys think it’s a good idea,” said Hommen Sawyer, a special education teacher at Pierson Middle-High School in Sag Harbor.

William Gomez, a former Marine who worked on Harrier jets and had tours of duty in Iraq, Afghanistan and throughout the Middle East, spent two long years searching for a house on Long Island while getting conflicting information from banks about how a VA loan would work for him, he said.

"I felt like they should have said, ‘Hey, this guy’s a vet; let’s help him out,' ” said Gomez, 37, a military clothing and textiles quality inspector for a government agency.

History, advantages of the loan

Signed into law by President Franklin Roosevelt as part of the GI bill in 1944, the program was designed to give vets a leg up in the housing market with loans that don’t necessarily require a down payment or mortgage insurance, have easier credit standards, and can offer lower closing costs. They proved so popular that they accounted for one-fifth of all single-family residences built between the end of WWII and 1966.

But getting a VA loan these days can be frustrating for veterans. Stories told by Crookendale and others indicate that although there are lending institutions that readily participate in the program, some would rather tell a veteran to “Drop and give me 50” than offer it as an option.

“It’s crazy,” said Milagros "Millie" Billitzer, an agent with Coldwell Banker American Homes who helped Crookendale get a VA-financed five-bedroom waterfront Colonial in Baldwin Harbor and now is helping her sell it as she and her husband plan a move to Florida. “You served your country and this is what you get?” 

Veterans Affairs officials said they seldom get complaints from veterans about lending institution problems. John Bell III, the VA executive director of the Loan Guaranty Service, said VA loan closing times are competitive. “True, a VA fee panel appraiser must provide a valuation of the home, but that has been speeded up to about the same as a conventional loan,” he said. About 13% of loans today are VA backed, officials said.

Anecdotally, vets say they still encounter banks that balk at the program, try to talk them into more expensive regular loans or delay the processing until their patience runs out.

For instance, Sawyer and her then-boyfriend (now husband), Vincent Sawyer, a 34-year-old former Marine who works as a maintenance mechanic at Plum Island, had their eye on a house in Shirley. But they lost their opportunity because of just such delays.

“They made us jump through so many hoops and it still ended up not being enough,” she said. “It was very frustrating.”

Crookendale didn’t anticipate the gauntlet she had to run when she began looking for a home. Having served as a nurse in the Army and an airman in the Navy before being discharged with a disability, she had no trouble qualifying for it. But the banks she applied to said she needed at least a 20% down payment.

“They tried to sway me the other way and not use the benefit I’m entitled to,” she said.

With Billitzer’s aid, she at last was connected with a cooperative lender and a seller sympathetic to veterans, buying a five-bedroom, 2½-bathroom home for $699,000 with a loan at 4% interest and no down payment. She and her husband, Gary Bryan, 53, a former Navy fireman who works in computer information systems and also runs a catering service, have enjoyed watching swans swim in the canal next to their home.

“It’s peaceful,” Crookendale said. “For a vet suffering from PTSD, it’s very therapeutic to be able to look out over the water.”

“Misconceptions about the program are common,” said David Goldberg, vice president of sales at Mid-Island Mortgage Corp., a delegated VA lender based in Westbury. One example is that the seller must pay a VA loan’s closing costs. That isn’t true, although the seller may opt to do so. Others fear it can become a headache since it requires a VA appraiser and that, because veterans don’t have to make a down payment, they are more likely to abandon the loan.

But, Goldberg said, VA appraisal requirements aren’t necessarily onerous: “We see just the opposite.”

He pointed out that veterans still need to meet the same loan qualifications as anyone else, but his firm encourages them to use all their VA advantages.

Still, traditional lenders are going to look more favorably at people who have some “skin in the game” with a down payment, he said.

“They feel they are going to be less inclined to walk away from that property.”

Paul Perrone, a broker with Realty Connect USA, agreed that applicants should at least put down some earnest money to hold a home, but as far as red tape holding things up? Not so.

“I did a VA loan from contract to close in 21 days,” he said, “one of the fastest non-cash closings I’ve ever had. So, it can be done.”

A 'super cute' home purchase

Although disappointed after missing her first chance at a home, Hommen Sawyer, who did aircraft weaponry maintenance in the Marine Corps, was thrilled to find a “super cute” home for sale in Center Moriches that is close to shopping and the beach. With Goldberg’s guidance, she and her husband purchased it for $235,000 in 2019 with no down payment. They also were able to use the VA program that allows vets to refinance if rates go down. Now, they pay 2.75% in interest. 

“It’s a little cottage on a half-acre on a dead-end street,” she said. “I call it our little pink house, you know, like the John Mellencamp song.”

When he was house hunting, Gomez said he had a “hassle” with his first bank since it was based in Texas and didn’t understand New York prices. Eventually, he did have a happy ending after getting some initial resistance from a lender on Long Island. Most of that was simply because of a lack of information, he said.

“They hadn’t dealt with a lot of vets so they didn’t know how it worked,” he said. “The guy I was using was open to listening and they did everything right by me at the end of the day.”

Gomez and his wife, Sonia Lora-Gomez, a registered nurse, finally purchased a three-bedroom, one-bath ranch for $336,000 in Freeport in 2016 with a VA loan with a 3.25% interest rate that his bank helped him secure. They opted to put in around $58,000 for a down payment and fees.

Gomez raises chickens in his Freeport backyard, which he said helps with his PTSD. It also means he doesn’t have to buy eggs at the grocery store.

“My friends laughed when I told them I was going to raise chickens,” Gomez said. “They’re not laughing now.”