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                               January 18, 2002

Vets home loan ceiling raised

WASHINGTON (American Forces Press Service) -- An act recently passed by Congress and signed by President Bush increases the guarantee on Veterans Affairs home loans from $50,750 to $60,000.

The increase means eligible veterans can use their loan benefit to purchase a home costing as much as $240,000 without a down payment. Many lenders will make VA no-down- payment loans for four times the maximum guaranty amount, said Judy Caden, deputy director of VA’s Loan Guaranty Service. Previously the maximum guarantee was $50,750, which allowed no-down-payment loans of up to $203,000.

"We recommended increasing the loan guarantee a couple of years ago because of rising housing costs in places like Washington, California and the New England area," she said. "The Mortgage Bankers Association and other groups have also been pushing for it."

The act also increases specialty housing grants from $43,000 to $48,000 for severely disabled veterans who need built-in accommodations. The grant pays for such things as wider hallways, lowered kitchen appliances and counters, and bigger bathrooms, Caden said. Veterans can use both a grant and a regular VA guaranteed loan to cover the total cost of their home purchase, she said.

Another grant program for housing adaptations for less seriously disabled vets had its ceiling raised to $9,250 -- up from $8,250, she pointed out. "The money is for some blinded veterans and amputees who need extra help," she said.

The new law also extends housing loans for National Guard and Reserve personnel to Sept. 30, 2009. Reserve component personnel are authorized the same home loan guarantees as active duty personnel.