Enhanced VA Mortgage Options Available
VA Guarantees Subprimes
Department of Veterans Affairs
WASHINGTON -- Veterans with conventional home loans now have new options for refinancing to a
Department of Veterans Affairs (VA) guaranteed home loan. These new options are available as a
result of the Veterans' Benefits Improvement Act of 2008, which the President signed into law on
October 10, 2008.
"These changes will allow VA to assist a substantial number of veterans with subprime
mortgages refinance into a safer, more affordable, VA guaranteed loan," said Secretary of Veterans
Affairs Dr. James B. Peake. "Veterans in financial distress due to high rate subprime mortgages are
potentially the greatest beneficiaries."
VA has never guaranteed subprime loans. However, as a result of the new law VA can now help
many more veterans who currently have subprime loans.
The new law makes changes to VA's home loan refinancing program. Veterans who wish to
refinance their subprime or conventional mortgage may now do so for up to 100 percent of the value
of the property. These types of loans were previously limited to 90 percent of the value.
Additionally, Congress raised VA's maximum loan amount for these types of refinancing loans.
Previously, these refinancing loans were capped at $144,000. With the new legislation, such loans
may be made up to $729,750 depending on where the property is located.
Increasing the loan-to-value ratio and raising the maximum loan amount will allow more
qualified veterans to refinance through VA, allowing for savings on interest costs or even
potentially avoiding foreclosure.
Originally set to expire at the end of this month, VA's authority to guaranty Adjustable Rate
Mortgages (ARMs) and Hybrid ARMs was also extended under this new law through September 30, 2012.
Unlike conventional ARMs and hybrid ARMs, VA limits interest rate increases on these loans from
year to year, as well as over the life of the loans.
Since 1944, when home loan guaranties were offered with the original GI Bill, VA has
guaranteed more than 18 million home loans worth over $911 billion. This year, about 180,000
veterans, active duty servicemembers, and survivors received loans valued at about $36 billion.
For more information, or to obtain help from a VA Loan Specialist, veterans may call VA at
1-877-827-3702 or visit
www.homeloans.va.gov.
Original Article Available: Military.com
http://www.military.com/Finance/content/0,15356,177919,00.html
