VA offers mortgage options to veterans

Veterans with conventional home loans now have new options for refinancing to a VA-guaranteed home loan. These options are available as a result of the Veterans Benefits Improvement Act of 2008 (S.3023), signed into law Oct. 10 by President Bush. VA has never guaranteed sub-prime loans, but the new legislation allows VA to help veterans who currently have such loans.

Veterans who wish to refinance their sub-prime or conventional mortgages may now do so for up to 100 percent of the property value. These types of loans were previously limited to 90 percent of the value.

Congress also raised VA's maximum loan amount for these types of refinancing loans. Previously, such loans were capped at $144,000. With the new legislation, loans may be given for as much as $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 potentially avoiding foreclosure.

Originally set to expire at the end of October, VA's authority to guaranty Adjustable Rate Mortgages (ARMs) and Hybrid ARMs was also extended under S.3023 through Sept. 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 of Rights, VA has guaranteed more than 18 million home loans worth more than $911 billion. This year, about 180,000 veterans, active-duty servicemembers and survivors received loans valued at about $36 billion.

For more information, or to obtain help from a VA loan specialist, call (877)-827-3702 or visit VA's Web site.

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