August 25, 2008 – The Department of Veterans Affairs (VA) is raising ceilings on its no-down payment home loans from the current $417,000 to as much as $729,000.
The increases are effective immediately under legislation recently enacted with President Bush signing the Housing and Economic Recovery Act of 2008.
That law also improved VA’s Specially Adapted Housing Program. It raises primary grants from $50,000 to $60,000 toward constructing a new home or modifying an existing home to meet adaptive needs of veterans or active duty service members with certain service-connected disabilities.
One new feature is a provision in the law that will assist burn victims. It will allow veterans with certain service-connected disabilities resulting from severe burns to receive the adaptive housing grants. The new law also makes future increases in ceilings on the Specially Adapted Housing Program automatic.
The increased limits in the general home loan program for all veterans’ home purchases or construction will be based on local housing costs, tied to the similar locality adjustments of the Federal Home Loan Mortgage Corp., Freddie Mac.
VA home loans are available for veterans to purchase or construct single-family homes, and to purchase condominiums or cooperative apartments. There are about 2.3 million existing VA home loans, more than 90 percent made with no down payment.