Ginnie Mae increases homeownership opportunities for veteransMortgagePress.comVA mortgage loans
Ginnie Mae has eliminated the restriction on the size of
mortgage loans guaranteed by the Department of Veterans Affairs
(VA) that can be used as collateral for Ginnie Mae securities.
Earlier, Ginnie Mae limited the size of VA-guaranteed loans that
can back Ginnie Mae mortgage-backed securities (MBS) to the
conforming loan limit of $417,000.
Approximately 30 percent of the loans that back Ginnie Mae MBS
are guaranteed by the VA. Unlike the Federal Housing
Administration's program, the VA program does not include a limit
on the size of the guaranteed loan.
"We expect this change will expand the availability of low-cost
financing and increase homeownership opportunities for America's
veterans, particularly in high-cost areas, by encouraging lenders
to make more VA loans," said Michael J. Frenz, executive vice
president of Ginnie Mae.
For example, although 10 percent of the nation's veterans live
in California, less than one percent of the VA loans in the Ginnie
Mae securities portfolio issued during the last two years were to
California veterans because loan limits were below most house
prices in the state.
"Now more than ever, America's veterans and their families have
a greater chance to make their dreams of homeownership a reality,
thanks to today's action by Ginnie Mae," said Judith Caden,
director of loan guaranty service at the VA. "This change is
another example of our joint commitment to ensure VA benefits keep
pace with the needs of our veterans in today's housing market."
"This is an outstanding initiative that will greatly benefit
veterans and their families who reside in high-cost areas and who
continue to make significant contributions to the growth and
prosperity of our nation every day," said George Lisicki, the
national commander of the 2.3-million-member Veterans of Foreign
Wars of the U.S. and its Auxiliaries. "This is what supporting the
troops is all about."
Ginnie Mae will continue to require that the amount of cash
downpayment, plus the amount of the VA guaranty, equal at least 25
percent of the value of the home.
For more information, visit www.ginniemae.gov.