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NEW POLICY INCREASES HOMEOWNERSHIP
OPPORTUNITIES FOR VETERANS -- This policy
change is
designed to make it easier for lenders to help
veterans and
servicemembers use their VA Home Loan benefit.
For more about VA home loans, use the VA
Watchdog search engine...click here...
http://www.yourvabenefits.org/ses
search.php?q=home+loan&op=ph
Story here...
http://www.military.com/
features/0,15240,149154,00.html
Story below:
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Homeownership Opportunities for Veterans
Increase
Military.com
Terry Howell
In an August 30 press release the Government National Mortgage
Association (Ginnie Mae) announced that it has eliminated the $417,000
home loan limit on Department of Veterans Affairs (VA) mortgage loans
that can be used as collateral for Ginnie Mae securities.
"We expect this change will expand the availability of low-cost
financing and increase homeownership opportunities for America's
veterans, particularly in high-cost areas, by encouraging lenders to
make more VA loans," said Michael J. Frenz, Executive Vice President of
Ginnie Mae.
Frenz was referring to home loan realities like that in California.
Although 10 percent of the nation's veterans live in California, less
than one percent of the VA loans in the Ginnie Mae securities portfolio
issued during the last two years were to California veterans because
loan limits were below most house prices in the state.
"Now, more than ever, America's veterans and their families have a
greater chance to make their dreams of homeownership a reality, thanks
to today's action by Ginnie Mae," said Judith Caden, Director of Loan
Guaranty Service at the VA. "This change is another example of our joint
commitment to ensure VA benefits keep pace with the needs of our
veterans in today's housing market."
This policy change is designed to make it easier for lenders to help
veterans and servicemembers use their VA Home Loan benefit to purchase
homes valued at more than $417,000. However the Department of Veterans'
Affairs is careful to point out that Ginnie Mae's new policy does not
change the current VA Home Loan Guaranty program rules and loan limits.
The most attractive feature of the VA Home Loan Guaranty program is that
it eliminates the need for eligible veterans and servicemembers to
provide cash down payments for homes valued at $417,000, or less, by
guarantying 25 percent of a home's purchase price. The new Ginnie Mae
policy will require borrowers to use the VA Home Loan Guaranty in
combination with a cash down payment to guaranty the loan for homes
exceeding the VA limit. This means that veterans and servicemembers who
wish to purchase homes priced higher than the VA limit, will be required
to provide an additional cash down payment to ensure the loan is
guarantied for at least 25 percent of the of the purchase price.
For example, a veteran wishing to purchase a home valued at $600,000
will need to provide a cash down payment of $45,750 -- 25 percent
of the difference between the $417,000 VA loan limit and the actual
purchase price of $600,000.
"This is an outstanding initiative that will greatly benefit veterans
and their families who reside in high-cost areas, and who continue to
make significant contributions to the growth and prosperity of our
nation every day," said George Lisicki, the national commander of the
2.3 million-member Veterans of Foreign Wars of the U.S. and its
Auxiliaries. "This is what 'Supporting the Troops' is all about."
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Larry Scott --
