Congress has approved legislation, supported by the National Association of Realtors, which aims to make home ownership more affordable for veterans.
The legislation increases loan guaranty limits on mortgages backed by the U.S. Department of Veterans Affairs to 25 percent of the Fannie Mae and Freddie Mac conforming loan limits. The new guaranty amount of $83,425 will enable qualified veterans to secure VA loans on homes priced up to $333,700.
The loan guaranty will also now be indexed to allow for annual adjustments. The association estimates that an additional 90,000 veterans will be able to utilize VA financing for their home purchase because of this higher loan limit.
U.S. Reps. Ginny Brown-Waite, R-Fla., and Chris Smith, R-N.J., and Sens. Jon Corzine, D-N.J., and Lisa Murkowski, R-Alaska, introduced the legislation, H.R. 4345/S. 2522, earlier this year. President Bush is expected to sign the bill.
“The increase in the VA home loan guaranty will make it easier for more veterans, especially those living in areas with high housing costs, to own their own homes,” said Al Mansell, association president and CEO of Coldwell Banker Residential Brokerage in Salt Lake City. “Realtors around the country are proud to support legislation that will help more veterans who’ve served our country with honor achieve the American dream of home ownership.”
More than 29 million veterans and service personnel are eligible for VA financing. The VA loan home loan guaranty program, created under the GI Bill in 1944, encourages private lenders to offer favorable home loan terms to qualified veterans. Under this program, the government guarantees 25 percent of the mortgage loan amount, enabling veterans to borrow up to four times the guaranty with no down payment.
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