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Legislation Strengthens Home Loan Guarantee Program for Veterans

Legislation supported by NAHB that will expand home loan programs for military veterans, active duty service members and military reservists was approved by the Congress on Nov. 17.

S. 2486, the “Veterans Benefits Improvement Act of 2004,” increases the maximum loan amount for loans under the VA loan guaranty program. Currently the Department of Veterans Affairs will guarantee 25% of a qualified home loan up to $240,000.

The legislation, which is expected to be signed into law shortly by President Bush, is based on the Fannie Mae and Freddie Mac conforming loan limit and will enable qualified veterans to purchase loans on homes priced up to $333,700.

Prior to congressional approval, NAHB sent a letter to the House leadership and to House Committee on Veterans’ Affairs members urging swift passage of this legislation, noting that the program provides an important homeownership benefit to those men and women who have defended their country through their service in the armed forces.

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The legislation also indexes the maximum VA guarantee amount to the Freddie Mac limit, thereby avoiding the necessity of congressional action to keep the VA benefit current with changing home prices. VA’s guaranteed amount has been raised only once since 1995, for an increase of approximately 18%, while home prices nationally have appreciated by roughly 73%.

More than 29 million veterans and service personnel are eligible for VA financing.

Since the program’s inception in 1945, more than 17.5 million veteran home loans have been guaranteed.

To read the legislation, click here and enter S. 2486 in the box at the upper left.

For more information, e-mail Bill Renner or call him at 800-368-5242 x8597.
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