5 Latest Changes for VA Home Loans

2020 brings good news to army veterans or even active-duty service members when it comes to home loans. Early this year, the Blue Water Navy Vietnam Veterans Act of 2019 took effect and brought with it changes that will surely benefit those who have served the country. 

One such change is the removal of VA home loan limits. Because of this, veterans and active members of the military can take advantage of getting a VA construction loan and maximize the amount, as long as they meet the credit requirements of the lending company and with sufficient down payment included. This change gives members a chance at getting a new home in a better area for raising their own families or for retirement purposes. They can get more competitive rates in higher-cost areas and be able to use their VA construction loan to build the house of their dreams. 

Another change is the increase in the funding fee for VA loans, depending on the down payment and frequency of availing a loan. For first-time borrowers, the funding fee is up to 2.3% compared to 2.15% in 2019. For those who have availed of loans before, the funding fee is up to 3.6% of the loan amount, from 3.3% in 2019. This increase applies for 2 years and then reverts back to 2.15% and 3.3% respectively from 2022 to September 30th, 2029. This amount then goes lower after the said period. This fee can be paid upfront or incorporated into the loan to be paid across a certain period. It will be interesting to note that the fees can even be reduced if the borrower is able to make over 5% of the down payment. 

The Blue Water Navy Vietnam Veterans Act of 2019 states that all fees are now the same across the main branch, the Reservists, and the National Guard. Previously, Reservists and the National Guard pay a slightly higher fee, and this is now evened out. 

For Purple Heart awardees are exempted from the funding fee. This is the best time for them to take advantage of a VA construction loan for their new homes because the limits have been lifted as well. 

Finally, veterans who receive compensation for service-connected injuries or disabilities are also exempted from the funding fee. This eases the burden of a VA construction loan while maximizing the benefits. 

As veterans and active-duty officers grab this opportunity, it will be helpful to remember that they can get a good credit rating compared to civilians, therefore they don’t need to scramble to get a perfect rating. Also, the VA is the guarantor for the loans, ensuring that the borrowers will be able to pay the loan in the agreed period. 

Creditors and lenders have varying requirements for eligibility, so due diligence is needed in finding which ones the members are qualified for. Blake Mortgage can assist in determining loan eligibility and can walk interested members through the entire process. The years of expertise are a testament to the ability of Blake Mortgage to connect borrowers with the right lender to avail of the VA loans. Please visit here to learn more: https://www.blakemortgage.com/va-loan 

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