VA Loan Updates

WASHINGTON, D.C. - Today U.S. Senator Daniel K. Akaka (D-HI), Chairman of the Veterans’ Affairs Committee applauded Senate passage of H.R. 3221, with the Dodd-Shelby Housing provisions, and noted that the bill incorporated provisions from Akaka’s bill to boost limit on veterans’ home loans, as well as other important housing provisions for current and former servicemembers.

“We must quickly approve this bill, for veterans and other Americans struggling with the national housing crisis,” said Akaka. “I commend Senators Dodd and Shelby for developing a housing bill that helps provide shelter for veterans and servicemembers.”

The Economic Stimulus Act of 2008, passed by Congress and signed into law in February, raised loan limits for Fannie Mae, Freddie Mac, and FHA home loans, but did not include an increase for the VA Home Loan Program. To correct this oversight, Chairman Akaka introduced S. 2768, which proposed to provide the appropriate increase to the VA Home Loan limits; provisions derived from this bill were included in H.R. 3221. If enacted, the Dodd-Shelby Housing provisions would provide for this increase throughout the calendar year.

Additionally, the Senate agreed to an amendment that would authorize VA to provide increased adapted housing grants to disabled veterans. Previous increases to the adapted housing grant program have been infrequent and insufficient given the rising costs of housing and construction.

Other veteran-related provisions in the Dodd-Shelby Housing Bill include:

* An increase in the length of time a lender must wait before starting foreclosure involving a returning servicemember, from three to nine months
* One year of relief from increases in mortgage interest rates for returning servicemembers.
* The establishment of a counseling program carried out by DOD to assist servicemembers and veterans with financial issues
* Eligibility for VA-provided home improvement and structural alteration payments to totally disabled members of the Armed Forces before their discharge or release from the Armed Forces
* Extension of specially adapted housing benefits to certain veterans and servicemembers with severe burns

The bill now moves to the House of Representatives.

Source: U.S. Senate - Committee on Veterans Affairs: Press Release

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Veterans’ Home Loans Would Rise to Match Stimulus-package Levels

U.S. Sen. Daniel K. Akaka (D-HI), Chairman of the Veterans’ Affairs Committee, introduced legislation today to raise the maximum guaranty amount for veterans’ home loans. The Economic Stimulus Act of 2008, passed by Congress and signed into law last month, raised loan limits for Fannie Mae, Freddie Mac, and FHA home loans, but inadvertently did not do so for the VA Home Loan Program. Akaka’s legislation would provide needed relief to veterans struggling to purchase homes in an uncertain economy. Akaka was joined by a bipartisan group of cosponsors: Senators Reid, Durbin, Burr, Rockefeller, Murray, Obama, Sanders, Brown, Baucus, Clinton, Kerry and Boxer. The Department of Veterans Affairs projects that, if passed, his bill would make home ownership a reality for thousands of additional veterans. Sen. Akaka’s floor statement introducing the bill is copied below:

MR. AKAKA. Mr. President, today I introduce a bill that would rectify an oversight made in the recent passage of the Economic Stimulus Act of 2008. If enacted, this bill will allow thousands of veterans to realize the American dream of owning a home. Senators Reid, Durbin, Burr, Rockefeller, Murray, Obama, Sanders, Brown, Baucus, Clinton, Kerry and Boxer join me in offering this legislation.

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Oooops! When Congress and the White House put together the recent bipartisan $150 billion economic stimulus package, they raised the maximum mortgage limits in high-cost areas for Fannie Mae, Freddie Mac and the Federal Housing Administration.

But lawmakers neglected to include a similar increase for the government’s primary home purchase program for veterans — VA-backed loans. While the limits of the other three programs now extend to $729,500 in the highest-cost areas — at least through Dec. 31 — VA loans remain capped at $417,000.

For home buyers such as Greg Rasnake, a lawyer and disabled veteran who works for the federal government, the $417,000 VA limit is a deal-killer. He, his wife and children moved to the Washington area a year ago from Oklahoma. They’ve been searching since for a single-family detached house in the close-in Virginia suburbs, but have been unable to use the VA loan guarantee program because of the $417,000 ceiling.

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Q: I’m a veteran and am eligible for a VA Certificate of Eligibility, which guarantees the lender a percentage of the loan. Can I use this as a portion, if not for all, of the down payment? — J.V.

A: No, but you won’t need to. The certificate isn’t exactly cash money.

But with the government guaranteeing part of your loan, the lender can lend you the entire purchase price, with no down payment.

Talk with a mortgage broker, or directly to local lenders, and they’ll explain.

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The National Association of Realtors(R) testified today in Congress that the Veterans Home Loan Guaranty Program should continue to be a valuable asset in helping the nation’s veterans achieve the dream of homeownership in a way that is safe, fair and affordable.

“The VA Home Loan Guarantee Program is designed to provide favorable loan terms for veterans who are unable to qualify for a conventional loan,” said Tony Agurs, a member of the NAR Board of Directors and Realtor(R) from California who is a 21-year U.S. Marine Corps veteran. “The VA program offers unique and important benefits for helping our military families achieve the dream of homeownership,” Agurs said.

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As a House subcommittee reviews expired and expiring veterans programs, veterans groups are urging the lawmakers to strengthen employment and re-employment rights programs, extend an option for adjustable-rate veterans’ home loans, and restore a $100 cut in monthly payments for apprenticeships and on-the-job training.

Although 13 programs are being re-evaluated, the one getting the most attention is a lapsed test program that had top government lawyers involved in resolving employment and re-employment rights complaints from federal workers who also serve in military reserve components.

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On the eve of the 62nd anniversary of the passing of the Rescission Act of 1946 Sunday (Feb. 17), Sen. Larry E. Craig (R-Idaho), said in an email that the “pension benefit (of S. 1315) is far too generous.” Sen Craig is one of the ranking members of the US Senate Veterans committee blocking the passage of the S. 1315 or the Veterans Benefits Enhancements Act.

The Senate bill, S. 1315, designed to repeal the law that took away the full benefits of Filipino World War II veterans is pending before the full Senate. However, Senator Craig disclosed to this reporter that he is “pleased to be an original co-sponsor of S. 2640″ introduced by Sen. Richard Burr (R - NC) last Feb. 14 “as an alternative to S. 1315″ because “it incorporates many of the very important provisions of S. 1315.”

He said the bill provides “retroactive payments of up to $100,000 to all disabled veterans who sustained severe injuries since the war on terror began, increased insurance coverage for severely disabled veterans under the Veterans’ Mortgage Life Insurance Program, and housing and auto grants to veterans with severe burns who require modifications to either their homes or vehicles.”

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Oregon Veterans can now get home loans below 5 percent. The Oregon Department of Veterans’ Affairs offers qualified veterans loans with fixed rate of 4.875 percent and an origination fee of 1.5 percent. A rate of 4.99 percent is available with an origination fee of 1 percent.

The current maximum loan amount for veterans using the ORVETS home loan program is $417,000. Federal rules prohibit the agency from refinancing most existing mortgages.

The ORVET home loan program is separate from the federal VA home loan guaranty program. Even if a veteran has purchased a home using the federal program, he or she may still be eligible for an ORVET home loan. Veterans must apply before they reach the 30th anniversary of their military discharge date.

For more information about ORVET home loans, call 1-888-673-8387 or (503) 373-2070.

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Question: When a veteran sells his property, who will assume the existing Department of Veterans Affairs loan? Is the veteran released automatically from personal liability for repayment of the loan?

Answer: No. If the loan closed after March 1, 1988, the lender or VA must be notified and requested to approve the assumer and grant the veteran release from liability. If the loan was closed prior to March 1, 1988, the loan may be assumed without approval from VA or the lender. However, the veteran is strongly encouraged to request a release of liability from VA to avoid owing a debt to the government if the loan assumer (or a subsequent assumer) fails to pay the loan. For more information on VA home loans, contact the VA at (800) 827-1000, or check out the VA Web site at www.homeloans.va.gov.

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By Bob Otto

About halfway through my Marine Corps enlistment I thought, man did I make a big mistake. All that marching, inspections, short haircuts, shining boots, cleaning my M-16 rifle, and living in a crowded barracks didn’t appeal to me much. But my four-year hitch went by quickly.

Now, almost 40 years later, if you ask me: “Bob, did you make a mistake enlisting in the Marine Corps?”

“Absolutely not,” I’d answer. In those 40 years since I enlisted, I got far more from Uncle Sam than he ever got from me.

My college education? Paid for through the G.I. Bill.

My first home? Purchased through the G.I. home loan program.

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