House Bill Would Index VA Loan Guaranty
A bill (H.R. 4065) recently introduced in the U.S. House of Representatives by Rep. Ginny Brown-Waite (R-FL) would index the VA loan guaranty to 22.5% of the Fannie Mae-Freddie Mac conforming loan limit.
If that law were in effect today, the maximum no-downpayment VA-guaranteed loan would be $300,330 and that amount would be adjusted upward without further action by Congress as the conforming loan limit is adjusted.
The NAHB Board of Directors adopted policy in support of indexing the VA guaranty in this manner at its fall meeting in Boston last year.
Currently, the amount of the VA guaranty is fixed by Congress at 25% of the total loan amount but no higher than $60,000, which limits the maximum no-downpayment loan an eligible veteran, active duty servicemember or reservist can receive to $240,000. The low amount of the guaranty relative to FHA and other low-downpayment loan programs prevents the VA program from being used to purchase homes in many of the nation's high-cost areas.
To read the legislation, click here, and enter H.R. 4065 in the box at the upper left.
For more information about the bill or NAHB’s policy on this issue, e-mail Bill Renner or call him at 800-368-5242 x8597.