The House of Representatives this week passed a bill to assist unemployed veterans through a measure that also extends the maximum VA loan limits for three more years.
The bill (H.R. 2433) makes sure that veterans living in high cost areas of California, Virginia and other states with high concentrations of military families will not experience a drop in loan limits on January 1.
The maximum loan limit for Fannie Mae, Freddie Mac and FHA guaranteed loans fell to $625,500 on Oct. 1 from $729,750.
The VA maximum loan limit would drop down to $625,500 also, according to the Mortgage Bankers Association.
In San Francisco, the VA loan limit is currently $962,500. In the Northern Virginia suburbs it is $768,750. (The Department of Veterans Affairs only guarantees up to $144,000 of the loan amount in high cost areas.)
So the loan limit drop would be steeper on VA loans and deny veterans access to no-downpayment loans in many high cost areas, according to Rob Zimmer who is lobbying for the VA loan limit extension.
Instead of buying, veterans and military families relocating to high cost areas will have to rent due to large downpayment and tight underwriting requirements on other loan products. "They should have a choice," Zimmer said.
As a principle at TVDC, Zimmer represents the Community Mortgage Lenders of America and the VA Mortgage Center, Columbia, Mo.
The House passed the VA bill by a 418-6 vote on Wednesday. It is unclear if the Senate will draft its own VA jobs bill or pass the House measure.
H.R. 2433 also includes a provision that prevents a drop in VA guarantee fees on Jan. 1. This provision reverses a decision Congress made seven years ago to reduce the guarantees fees.
