VA Loan Updates

The House Veterans’ Affairs Committee is focusing on how to use the veterans’ home loan program to help service members and veterans who risk losing their homes.

Reps. Steve Buyer, R-Ind., and Mike Michaud, D-Maine, introduced a bill Thursday that would greatly increase the maximum loan amount that the Department of Veterans Affairs guarantees. The bill, HR 4539, would raise the current $417,000 limit to a new maximum of $521,250.

Buyer, the former committee chairman, said the chief reason for the increase is that the $417,000 cap is so low that it precludes service members and veterans from using the program in some high-cost areas of the country.

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The recent .25% rate cut by the Federal Reserve on Monday the 11th of December 2007, has caused VA mortgage rates to increase. Most home owners will automatically assume that due to a Fed rate cut of any size, that interest rates on VA loans should follow suit and go lower also. This is very far from accurate. 

One of the biggest misconceptions veteran home owners usually have about the Federal Reserve and rate cuts is this:

1. If the Fed cuts rates then VA home loan rates will obviously go down.

This is very far from accurate. Hopefully this article will shed some light on why this is not normally the case and also assist VA home owners in making an educated decision in regards to refinancing or purchasing a VA loan.

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At a time when American servicemen and women are risking their lives in Iraq and Afghanistan, they deserve all the help they can get.

And after battling overseas, the last thing they need is to return home and have to wage another fight against the red tape of the VA.

To that end, author David Reed has set out to ensure that at least VA loans are easier to access, and in many ways his no-nonsense book looks certain to become a useful resource.

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Every dollar that the United States invested in education under the original GI Bill resulted in at least a five-fold increase in economic benefits.

Those figures are from a Congressionally mandated analysis that Jerome Kohlberg cites as he argues for financing college for veterans returning from Iraq and Afghanistan.

The self-made financier knows himself how the country was transformed into a country of doctors, lawyers and entrepreneurs. He graduated from some of the country’s top schools, co-founded one of Wall Street’s most successful private equity firms, and became a billionaire.

And he did it on that GI Bill.

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CHULA VISTA, Calif. - Air Force veteran Nellie Cooper thought she was following good advice when she refinanced her home’s mortgage with an adjustable-rate loan. For the self-employed real estate agent, it seemed smart.

But her mortgage payments ballooned while local property values dropped, sinking her prospects of refinancing into a more secure, fixed-rate loan. With lenders nationwide tightening eligibility rules, Cooper is finding few that are willing to refinance or rework the loan into something financially manageable for her.

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EDMOND - This past week I received a phone call from a customer for whom I had provided 100 percent V.A. purchase money financing early this year. He asked if I had a few minutes to discuss a refinance offer he had received in the mail. The offer promised he could refinance back into a V.A. mortgage at a 5 percent fixed interest rate for 15 years. He wanted to know if I could match their offer.

Before I answered, I asked the question I always ask before making any recommendation; “Help me understand exactly what you’re trying to accomplish.”  It may seem obvious that he wanted to refinance into a lower interest rate. But after a few minutes of conversation I discovered that his true interest was paying off his home so that his wife would not have to worry about the payment should something happen to him.

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Program helpful to vets, active-duty personnel, sellers in difficult market

With that government assurance, participating lenders are willing to give borrowers loans for the full price of their homes. VA mortgages do not require the private mortgage insurance that is usually necessary for loans with little or no down payment. The absence of PMI saves borrowers hundreds of dollars each month.

Qualified veterans and active-duty military personnel can buy a home for as much as $417,000 without a down payment or private mortgage insurance. Borrowers can add some down payment money to the mix and use the VA program for homes that cost more than $417,000.

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Question: What are the requirements to obtain a Department of Veterans Affairs home loan?

Answer: Besides the various periods of eligibility from World War II to Vietnam, post-Vietnam and the Gulf War, and conditions of service requirements, in particular if someone was discharged under conditions other than dishonorable, applicants must have a good credit rating, sufficient income and a valid certificate of eligibility, and agree to live on the property. To obtain a certificate, complete VA form 26-1880 “Request for a Certificate of Eligibility for VA Home Loan,” and mail to: VA Eligibility Center, P.O. Box 20729, Winston-Salem, NC 27120. Applicants may also have their lenders obtain a certificate of eligibility for them through VA’s Automated Certificate of Eligibility system. For more information, visit www.homeloans.va.gov/eligibility.htm. You can also contact the VA at (800) 827-1000 and follow the directions by pressing the number for touch tone or rotary phone, then number 3, followed by number 2 for home loan information. You also can also speak to one of our home loan specialists at Tripler Army Medical Center in E Wing, 1st floor Oceanside/Diamond Head entrance.

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Veterans Day presents an opportunity to take a look at an important benefit available to military veterans and active-duty personnel, the zero-down payment VA mortgage.

Thanks to some needed modernization to the Department of Veterans Affairs program, combined with buyers’ growing leverage in the real estate market, VA mortgages have become much more useful than they were only a few years ago. They’re even relevant in an expensive housing market like the Washington area.

Considering what some real estate agents have told me recently, though, that news hasn’t reached everyone. Some agents remember the VA program of old, which was shunned by home sellers — and even some eligible buyers — because it involved red tape, delays, extra expenses for the seller and a low cap on the amount of money a veteran could borrow.

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First-time homebuyers and honorably discharged military veterans may be missing out on millions of dollars of free cash grants available now from lenders participating in the Nevada Rural Housing Authority’s Homes at Last program.

It gives a non-repayable down payment grant equal to 4 percent of the original loan to low-to-moderate income, first-time homebuyers and honorably discharged military veterans.

D. Gary Longaker, NRHA’s executive director, and his staff have raised more than $80 million since 2006 in mortgage assistance funds through the sale of tax-exempt bonds.

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