VA home loan ceiling raised

National Guard, Feb 2002

The president has signed into law an act authorizing Veterans Affairs home loans for National Guardsmen and Reservists for two additional years. The new law also increases the guarantee on Veterans Affairs home loans from $50,750 to $60,000.

The new law extends housing loans for National Guard and Reserve personnel from September 2007 to Sept. 30, 2009. Reserve component personnel are authorized the same home loan guarantees as active duty personnel.

That means eligible reservists 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 guarantee amount, said Judy Caden, deputy director of VAs Loan Guaranty Service. Before the president signed the Veterans Education and Benefits Expansion Act of 2001 Dec. 27, 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," Ceden said. "The Mortgage Bankers Association and other groups have also been pushing for it."