Higher VA Loan Limits to be Restored
The Senate and the House of Representatives voted to increase limits on loans offered to military personnel though the U.S. Department of Veterans Affairs. The limit would increase from $625,500 (where it’s remained since Jan. 1) back up to $729,750, National Mortgage News reported Aug. 1.
H.R. 1627 was submitted to the White House where it’s expected to get the president’s approval, guaranteeing that the increased loan limit would remain through at least 2014.
Congress had dropped the VA loan limits in January along with maximum loan limits on Fannie Mae and Freddie Mac loans. Lawmakers left the maximum limit for Federal Housing Administration-insured loans at $729,750 to leave borrowers some access to jumbo loans.
The decrease in VA loan limits, however, had left veterans in high-cost areas dependent on FHA loans. “Veterans deserve full access to their earned benefits,” Rob Zimmer, head of external affairs at the Community Mortgage Lenders of America, told National Mortgage News, “In some cases, veterans had to go to FHA when they preferred to go to VA.”
VA does not have a maximum loan limit, but rather a maximum loan guarantee equal to 25 percent of the published VA loan limit. At the start of 2012, the VA loan limit in the Washington, D.C., area, for example, dropped from $818,750 to $625,000, while in San Diego County, the limit fell from $537,500 to $477,000.