Latest Updates to VA Loans
VA Home Loans are
considered by many as the best Government guaranteed home loans
VA loans were not created that way, their current state is the
result of decades of innovation in the form of upgrades and
expansions to the program.
The program started
out as part of the Servicemen’s Readjustment Act, created by
Congress to ease the path towards homeownership for World War 2
Veterans. At first, the program was only meant for Veterans and
Active Duty Service members. Additionally, applicants were required
to take out the loan within two years of finishing their service, or
their benefits would expire.
Since then, VA loans
have gone through several updates, which have made them one of the
best benefits to come from serving in the military. Even with other
benefits earned through military service like the GI Bill,
healthcare options, and small business loans. As a result, the
number of applicants who
apply for a VA loan has been steadily increasing.
Updates to VA Home Loans
For the first 26 years
of its existence, VA home loans remained pretty much the same.
However, in 1970 the Veteran Housing Act was signed into law by
President Richard Nixon. This law made some significant changes to
VA loans like the removal of termination dates. Meaning that
applicants could take advantage of these loans more than two years
after they left the service.
In 1978, President
Jimmy Carter signed the Veterans Housing Improvement Act, which
eased VA home loan eligibility. Therefore, more Veterans and Active
Duty Service Members can now take advantage of VA home loans.
Fourteen years later, in 1992, President George H. W. Bush signed
the Veteran Home Loan Program, which expanded benefits to members of
the National Guard and reservists.
Updates to VA home
loans have not stopped, and they continue to this day, with the
latest update happening on January 1st, 2020, with the
signing of the Bluewater Navy Act.
Navy Vietnam Veterans Act of 2019
Signed on June 25th,
2019, three days after the 75th anniversary of the
Servicemen’s Readjustment Act, the Bluewater Navy Act expanded
benefits for Vietnam Veterans. The new law expanded medical benefits
for Vietnam War Veterans exposed to Agent Orange and other dangerous
chemicals during their service. It also made VA loans even better
with changes to the VA funding fee and the removal of VA loan
The signing of these new laws raised the funding fee for Active Duty
Service Members from 0.15% to 0.30%. While at the same time, members
of the National Guard and military reserves saw their funding fee
decrease to align with Veteran and Active Duty rates.
Additionally, Purple Heart recipients can now have their funding fee
completely waived as long as they close on their property while
still in active duty. Moreover, Veterans with disabilities who were
already exempt from the funding fee can keep their status. All
changes brought on by the new law to the funding fee are expected to
last until 2022.
These new laws brought on by the Bluewater Navy Act also removed VA
loan limits for borrowers who have only one existing VA home loan.
By removing loan limits, the VA allows borrowers to find a home
anywhere in the country based on what they could afford, and not
some number set up by the VA.
Additionally, Native American Veterans who plan to take out a loan
with the purpose of building or purchasing a home can do so without
having to deal with loan limits. The only requirement is that the
property is located on Federal Trust Land.
Lenders will still have to make sure that the applicant can afford
to make their monthly payments, and some lenders have even set up
their own loan limits. Some lenders have set up loan limits based on
their willingness to lend out for zero money down. Currently, VA
Home Loan Centers has lenders who have a limit of $5,000,000 for no
However, borrowers who have more than one existing VA loan are still
subject to loan limits depending on their particular county. The
good thing is that even these loan limits saw an increase from
$484,350 to $510,400 on January 1st, 2020.
The VA’s ability to
keep its place as the premier home loan is a direct result of active
Government involvement, which continually upgrades and improves it.
Therefore the VA ensures that VA loans stay upgraded to meet current
demands of homeownership.
Phil Georgiades is the CLS for VA Home Loan Centers, a
Government-sponsored brokerage specializing in VA home loans. He has
been a practicing real estate professional for more than 22 years.
To find out if you’re eligible for a VA loan,