VA improves home loan guarantee program

Veterans with conventional home loans now have new options for refinancing to a Department of Veterans Affairs (VA) guaranteed home loan.

These new options are available as a result of the Veterans’ Benefits Improvement Act of 2008, which the President signed into law on Oct. 10, 2008.

“These changes will allow VA to assist a substantial number of veterans with subprime mortgages refinance into a safer, more affordable, VA guaranteed loan,” said Secretary of Veterans Affairs Dr. James B. Peake. “Veterans in financial distress due to high rate subprime mortgages are potentially the greatest beneficiaries.”

VA has never guaranteed subprime loans. However, as a result of the new law VA can now help many more veterans who currently have subprime loans.

The new law makes changes to VA’s home loan refinancing program. Veterans who wish to refinance their subprime or conventional mortgage may now do so for up to 100 percent of the value of the property. These types of loans were previously limited to 90 percent of the value.

Max loan raised

Additionally, Congress raised VA’s maximum loan amount for these types of refinancing loans. Previously, these refinancing loans were capped at $144,000. With the new legislation, such loans may be made up to $729,750 depending on where the property is located.

Increasing the loan-to-value ratio and raising the maximum loan amount will allow more qualified veterans to refinance through VA, allowing for savings on interest costs or even potentially avoiding foreclosure.

Originally set to expire at the end of this month, VA’s authority to guaranty Adjustable Rate Mortgages (ARMs) and Hybrid ARMs was also extended under this new law through September 30, 2012. Unlike conventional ARMs and hybrid ARMs, VA limits interest rate increases on these loans from year to year, as well as over the life of the loans.

Since 1944, when home loan guaranties were offered with the original GI Bill, VA has guaranteed more than 18 million home loans worth over $911 billion. This year, about 180,000 veterans, active duty service members, and survivors received loans valued at about $36 billion.

DAV vans

The Disabled American Veterans (DAV) organization is running a VAHC van from Durango on Tuesdays and Thursdays — call Mike Dunaway, 247-2198 — and from the Farmington area on Mondays and Wednesdays — all Harriet Mulnix, (505) 793-1782.

Durango VA Clinic

The Durango VA Outpatient Clinic is located at 400 South Camino Del Rio, Suite G, next to Big 5 Sports. Phone number is 247-2214.

Further information

For information on these and other veterans, benefits, call or stop by the Archuleta County Veterans Service Office located at the Senior Center in the Pagosa Springs Community Center on Hot Springs Boulevard. The office number is 731-3837, the fax number is 264-4014, cell number is 946-6648, and e-mail is afautheree@archuletacounty.org. The office is open from 8 to 4, Monday through Friday. Bring your DD Form 214 (Discharge) for application for VA programs, and for filing in the VSO office.