16 October 2007

The housing/mortage crunch and the military

With the collapse of the mortgage market and the stagnation of the housing market around nation, I am left to wonder where and how new buyers are supposed to get into the market. A new buyer such as myself. I live in a little town on the outside of a major regional military base in the Pacific Northwest. The town has seen a boom in population with the latest rounds of BRAC, but it has also seen an boom due to the number of people that want to live in the county. When I first arrived in the area about 5-6 yrs ago prices for the "starter home" were running in the $175K range, which was out of my range. Yet, now they have risen up to $220K and it seems to only get worse. I want to settle down into a house, yet with the collapse of the mortgage market and the rising restrictions to those with little or no credit history has basically closed me out of the market. That is unless I am willing to put myself up to my nose (or beyond) in debt to establish credit history. I am also sure that there is a number of fellow enlisted military members who are in the same situation. They have either lived in the barracks or the ship, the only thing that they have have on their credit is a credit card, cell phone, or car loan. They finally get high enough in the rank structure and are authorized to move ashore and into town. During the process they find out that they are shut out from most banks because of the no/low credit history. Their only way to find a place to live is via a rental, whether that is an apartment or a house. Well there is base housing but that is only for the married folks and that is at a premium right now all over as well. So that is out for us single folks.
Ah Southern but what about the VA? What about the VA you say. Well if I apply for a VA Loan that has to be through a pre-approved bank or loan provided that has been cleared by the Veterans Administration (VA). Also on top of that I can only get so many VA loans with in a certain time period and I still need to be able to pre-qualify for a loan. On top of that all a VA loan is just a guarantee up to a certain limit.
So the only hope for me to even try and get what is now considered to be part of the American dream. The dream of a house of mine own, with two cars in the garage, a bunch of rug rat toys in the front yard and a large dog running around in the back yard is out of reach. That is unless I am willing to start swimming in debt like it appears most lending institutions want the modern American to do.
So what is it going to take to cool the market down or make it easier for the US Military member to get their piece of the American Dream? I don't know off hand, I have my smarts in electronics not economics. I just understand the basics of economics (ie supply and demand, not writing checks I can't cash, etc) and even that seems complex at times (don't get me started on how to compound interest).

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