The U.S. Department of Veterans Affairs has informed a former Army sergeant and his same-sex partner that it couldn’t guarantee their home loan, because the VA doesn’t count the income of a non-veteran spouse in states like Texas that don’t recognize same-sex marriages
Lone Star Q reported that former Army Sgt. Earl Rector and Alan Rodriguez traveled to Seattle to get married last month before returning
to Dallas, where the newlyweds planned to buy a new house.
But eight days prior to close the VA effectively denied the loan that up to that point had been pre-approved.
“In our case, being denied a VA loan results in about a $400 per month increase in our payment,” Rector told The Marine Times, noting the couple is still trying to calculate the financial penalty they face. “We are now unable to meet our closing date, which creates substantial legal risk to us both.
“We were under the impression that VA, being a federal agency, would follow the same rules as the Defense Department on this matter and recognize same-sex marriages regardless of the state of residency,” Rector said. “If the IRS recognizes our marriage regardless of state of residency, why would VA act differently?”
Ken Upton, a senior staff attorney at Lambda Legal in Dallas, told Lone Star Q that even though the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act this year, Title 38 of the U.S. Code contains a separate definition of marriage that is both gender-specific and based on the state of residence.
Unfortunately this situation should have been avoided prior to entering into a sales agreement. I can’t fault the VA, the guidelines are clearly posted on VA’s site. The lender should be held responsible for any loses encurred by the Veteran for failure to disclose this prior to heighten expectations.
On a separate note, the VA financing amendum signed by ALL parties at the time of entering into a sales contract clearly notes that
“ Buyer shall not incur any penalty by forfeiture of earnest money or otherwise be obligated to complete the purchase of the property if the Buyer is not approved by the Veterans Administration and the lending institution.”
So long as the buyer has performed in all other aspects of the contract, the Veteran should have no penalties related to his failed loan. Feel free to contact and like me on Facebook at the Bendebba Team for more information. This article was posted on my page yesterday and commented on there as well.
Very unfortunate for the couple. There should have been considerations but it can’t be helped that not all states are okay with same-sex marriage. They just have to find another way to loan for a home perhaps in another company.