2004 VA bill expands veterans’ homeownership opportunitiesMortgagePress.comGeorge W. Bush,Home Loans,Veterans,Department of Veterans Affairs
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
limit.
“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
legacy.”
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 years.”
For more information, visit www.va.gov.
