The couple had been preapproved for their home loan, which they planned to get through the U.S. Department of Veterans Affairs based on Rector’s military service from 1992 to 1999. But on Tuesday, eight days before they were set to close, the U.S. Department of Veterans Affairs informed them that it couldn’t guarantee the loan. That’s because the VA doesn’t count the income of a non-veteran spouse in states like Texas that don’t recognize same-sex marriages.
The Marine Times reports today that Rector and Rodriguez are now trying to get the financing back on track to avoid a breach of contract if they can’t buy the house. But even if they are able to get financing, they will lose the lower interest rate and other benefits that come with a VA loan.
“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.
“The [Obama] administration has stopped enforcing the gender restrictions contained in the statutory definition concerning Spousal Benefits for Veterans, but to my knowledge the tie to place of domicile to determine marital status has not been finally resolved,” Upton said.
The Marine Times reports that a Senate committee is considering legislation to fix the problem, but even if the bill passes, it won’t be in time to help Rector and Rodriguez. Sen. Mark Udall, D-Colo, called on the Obama administration to address the issue after a similar case arose in Colorado, but no changes have been announced.
In a report last month about Udall’s request, The Washington Blade said LGBT advocates were still seeking clarity from the Obama administration as to how it plans to enforce Title 38.