Great news for active and retired military vets!

[Cynthia Elder]

Trump Signs Bill Eliminating the Cap on VA Mortgages

June 26, 2019

George Brooks

The Department of Veterans Affairs will now guarantee no-downpayment loans above the Fannie Mae/Freddie Mac conforming loan limit under the Blue Water Navy Vietnam Veterans Act, signed into law by President Trump Tuesday night.

H.R. 299 eliminates the cap on VA home loans, which means that qualified homebuyers can now borrow above the agency's standard loan limit of $484,350 for most counties in 2019 with no downpayment requirements.

The U.S. Senate unanimously approved the measure earlier this month after a federal court ruled the VA is required to provide health coverage to veterans exposed to Agent Orange during the war. Prior to the bill's enactment, coverage was available only to those who were exposed to Agent Orange on land.

The Blue Water bill initially sought to raise the funding fee on VA loans to pay for the proposed extension of VA health benefits to former Navy personnel who served on ships off the coast of Vietnam.

However, housing and industry trade groups and veterans organizations lobbied against the proposed increase. They argued that VA loan guarantee fees should be based on the risk of the loan made, not the costs of other VA programs or benefits. So, as a way to generate additional revenue, policymakers decided to eliminate the loan cap.

Article from Inside Mortgage Finance