2004 VA bill expands veterans' homeownership opportunitiesmortgagepress.comVeterans Benefits Act, VA home loans, loan limit
President George W. Bush recently signed the Veterans Benefits
Act of 2004 (S. 2486). The new law, which goes into effect Jan. 1,
includes an important new provision to increase the maximum home
loan amount that the Department of Veterans Affairs will guarantee
under its home loan guaranty program. Currently, the VA will
guarantee 25 percent of a qualified home loan up to $240,000; under
the new law, the maximum qualified home loan limit would rise 40
percent to $333,700, the maximum level allowed by the federally
chartered Freddie Mac/Fannie Mae programs. This level will be
indexed in future years to the Freddie Mac/Fannie Mae maximum
amounts. This allows veterans and military personnel to get no-down
payment loans of up to the Fannie Mae/Freddie Mac conforming loan
"The National Association of Mortgage Brokers is pleased that
Congress has passed legislation which will help our nation's
veterans become homeowners," said NAMB President Bob Armbruster.
"In light of the rise in home prices over the past few years, this
legislation is especially relevant to the new veterans who will be
entering the marketplace after serving our country."
The U.S. Senate passed S. 2486 on Oct. 8 and the U.S. House of
Representatives passed the bill on Nov. 17, and in fiscal year
2004, VA originations totaled approximately $44 billion. Lenders
and veterans supported the increase, saying that home price
appreciation--especially in high-cost areas--left many veterans
without access to the VA program.
"This is a big boost for the VA program," said Keith Pedigo,
director of the VA's Loan Guaranty Service, noting that the VA had
received several complaints from veterans who were unable to use
their home loan benefits.
"The veteran's benefits legislation which the House and Senate
Veterans' Affairs committees have produced will be a great
assistance to America's veterans," said Pennsylvania Sen. Arlen
Specter, Chair of the Senate Veterans Affairs Committee and sponsor
of S. 2486. "This legislation will not only enhance the lives of
the men and women who fought for our country, but also their
families who have supported them and who carry on their
S.2486 also renews the VA's authority to guaranty one-year
adjustable-rate mortgages and gives the VA secretary the authority
to change the maximum adjustments allowed on hybrid ARMs.
Previously, hybrid ARMs could not adjust by more than one
percentage point, which made it difficult for lenders to offer
hybrids with an initial term of five years or more.
According to Pedigo, the new law represents, "probably the most
significant piece of legislation for the VA program in the last 35
For more information, visit www.va.gov.