Trump Signs Bill Into Law that Abolishes VA Loan Limits

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mortgage applicationPresident Trump has signed a veterans health bill into law that also abolishes the conforming loan limits on VA loans beginning Jan. 1, 2020 for veterans who do not have an outstanding loan guaranteed by the Department of Veterans Affairs.

The VA limit is based on Fannie Mae and Freddie Mac’s conforming loan limit, which is $484,350 in most counties. The Blue Water Navy Vietnam Veterans Act allows home buyers to borrow above this cap without any down payment. Additionally, the bill removes the cap on the amount the VA will guarantee, which is 25% of the conforming loan limit. This change allows the VA to guarantee 25% of the full loan amount for all loans.

The Congressional Budget Office estimates that VA would guarantee about $5 billion worth of additional loans a year under this provision.

The bill also temporarily raises fees on some VA home loans by 15-30 basis points.

The primary focus of the legislation extends disability compensation to Vietnam War-era veterans who were exposed to Agent Orange.

For more information, contact Curtis Milton at 800-368-5242 x8597.

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Comments (6)

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  1. Justin says:

    Once you take out an initial VA loan in 2020 can you carry multiple loans. ie. Live in a house as a primary residence for one year, rent it, buy another, and continue that cycle with multiple VA loans. It seems that not just the cap is eliminated but the entitlement limit is too.

    • NAHB Now says:

      Justin,
      At this point it is difficult to say how the program would work in your specific situation as there are a few important points to keep in mind. First, as noted in your question, the Blue Water Navy Vietnam Veterans Act does not go into effect until Jan. 1, 2020 and secondly, the Department of Veterans Affairs is still in the process of writing the rules and regulations in order to implement policy for this program. What we currently have in place is a bill that has been signed into law but is still in the rulemaking process. As we get closer to the Jan. 1, 2020 implementation date, more details will be released explaining how the program will function in various circumstances. If you have any further questions, please do not hesitate to reach out to Curtis Milton, NAHB Director of Single Family Finance, at cmilton@nahb.org.

  2. Jen says:

    Would it enable vets who were originally going to have to make a Jumbo VA loan be able to roll their funding fee into the mortgage now or would there still be a cutoff mortgage amount where they would have to pay it in cash?

    • NAHB Now says:

      Jen,
      The Department of Veterans Affairs is still in the process of writing the rules and regulations in order to implement policy for this program. As we get closer to the Jan. 1, 2020 implementation date, more details will be released explaining how the program will function in various circumstances. If you have any further questions, please do not hesitate to reach out to Curtis Milton, NAHB Director of Single Family Finance, at cmilton@nahb.org.

  3. Jim says:

    Will the funding fee be waived come Jan 1,2020 for veterans with a VA disability rating of 10% and higher?

    • NAHB Now says:

      At this point it is difficult to say if the funding fee would be waived for veterans with a disability rating above 10 percent however, we have to keep in mind the Blue Water Navy Vietnam Veterans Act does not go into effect until Jan. 1, 2020 and therefore, the Department of Veterans Affairs is still in the process of writing the rules and regulations in order to implement policy for this program. What we currently have in place is a bill that has been signed into law but is still in the rulemaking process. As we get closer to the Jan. 1, 2020 implementation date, more details will be released explaining how the program will function in various circumstances. If you have any further questions, you can contact Curtis Milton at cmilton@nahb.org.

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