Veteran Loan Program Misused in Local Short-Term Rental

Key from property and USA flag. VA loan mortgage concept. | Image by Vitalii Vodolazskyi, Shutterstock

The efficacy of short-term rental properties is once again in question after Keller residents discovered that the Veteran’s Affairs (VA) loan program was misused to purchase a short-term rental property in their neighborhood.

The VA home loan program is a service provided by private lenders, such as banks and mortgage companies, to help servicemembers, veterans, and eligible surviving spouses become homeowners.

A VA home loan enables several benefits, which usually include lifetime access, no down payment, competitively low-interest rates, limited closing costs, and no private mortgage insurance. However, to qualify for a VA-backed purchase loan, the buyer of the property must actually live in the home, according to the VA.

The revolving door of short-term renters has created a stir recently in North Texas, especially among those living next to them.

As for the property in question, Keller residents Bill Schlegel and Gary Croxdale contacted the authorities back in June after suffering from the constant sound of loud music and the persistent smell of marijuana.

The home belongs to Jame Cadet, who received guaranteed financing from the Department of Veterans Affairs to purchase the Keller-based property, according to documents from late January obtained by neighbors.

Per historic listings, Cadet’s Keller home is advertised on Airbnb and Vrbo for $700 per night with the ability to support up to 14 people in the home at one time.

The Keller police department has been called to the property twice this year after receiving complaints over the constant traffic, smell, and noise. In June, a 10-person coalition of surrounding neighbors sent the VA a signed document alleging that at no time had the owner been observed living in the home.

“My husband is a vet. It is really upsetting that someone is manipulating the veteran system to get into a house with zero down,” Keller resident Marji Buffington said.

She continued, noting that the owner was behaving more like an investor by taking away from the pool of money and available resources that should be for veterans and their families.

Despite the complaints and letter to the VA, neighbors were told that the matter could only be discussed with the veteran in question.

“As a matter of privacy, the VA Office of Inspector General (OIG) does not confirm or deny individual complaints submitted. However, the VA OIG reviews all complaints received,” the VA wrote in response to the 10-person letter.

When Fox News reached out to Cadet for a press inquiry about using his VA loan to buy a short-term rental home, he was dismissive and hung up the phone. Cadet is currently a full-time resident of New Jersey, according to information on his Facebook page.

When the Fox News reporter reached out to the Department of Veteran Affairs to find out how they handle the misuse of their loan program, a spokesperson explained the action is a crime and that the perpetrator can be charged at the state and federal levels.

“The lender may accept the occupancy certification at face value unless there is specific information indicating the veteran will not occupy the property as a home or does not intend to occupy it within a reasonable time after loan closing.” Otherwise, it is a federal and state crime for a veteran to apply for a VA-back home loan, only to misrepresent their intention to maintain residence in the property, the spokesman said.

Keller does not regulate short-term rentals, so despite simultaneously violating the integrity of the VA loan program and the short-term rental business model, Cadet has not violated any city requirements or been charged with any crimes.

Concerns about fraud can be reported directly to the Office of Investigation (OI) handled by the Department of Veterans Affairs, Office of Inspector General.

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