Home Loans for Veterans No Longer Capped

Veterans who secure loans through the Department of Veteran’s Affairs (VA) Home Loan Guaranty Program will no longer have a capped amount on what they can borrow.

With the Senate unanimously passing H.R. 299 and President Trump signing it into law, previous caps on borrowing for veterans have officially been eliminated.

This was a part of the overall legislation, which is historic in context. It is called the Blue Water Navy Vietnam Veterans Act, which will finally give the same health benefits to military personnel who served off the coast of Vietnam in the water, as was afforded decades ago to the ground troops in Vietnam who were exposed to Agent Orange.

The new law will bring medical relief to approximately 90,000 veterans who were not given expedited treatment with medical issues that may have been or definitely were related to exposure to Agent Orange.

Part of getting the loan cap lifted involved the National Association of REALTORS® (NAR), as the trade organization worked with other interested housing industry representatives to negotiate a limit on proposed fee increases on home loans secured through the VA.

The idea behind increasing those fees was a way to try to offset the cost of guaranteeing the new $1.1 billion in medical benefits.

Several Housing industry trade organizations, including NAR, teamed up with some veterans’ affairs associations to work with Congress to find a way to extend veteran health benefits without increasing the VA home loan guarantee fees, something that was being considered even though the two are completely unrelated.

An agreement reached in 2018 set those fees for a buyer at $350 over the span of 10 years.

“As we aim to ensure our nation’s veterans have every possible opportunity to achieve the American Dream of homeownership, the National Association of REALTORS® has remained a strong supporter of the VA home loan guaranty program,” NAR President John Smaby said in a statement. “This vital tool encourages private lenders to offer favorable home loan terms to qualified veterans and provides a much-needed resource to those who have sacrificed so much for this country.”

Smaby added that the fees on VA loans should be based on risk, and not the cost of other benefits or programs offered by the VA.

The VA home loan guarantee program encourages private lenders to offer favorable home loan terms to qualified veterans without requiring a down payment. It has helped raise veteran homeownership rates to over 75% – much higher than the national average.