The Department of Housing and Urban Development is reminding lenders that veterans are eligible for special treatment under the Federal Housing Administration single-family loan program.Qualified veterans do not have to make a cash investment of 3% of the property's sales price to get an FHA loan, HUD says in a letter (2004-24) to lenders. Calculating the cash reduction is not always easy, however. So HUD has provided a chart and guidelines for lenders. In a low-closing-cost state, a veteran only has to come up with $2,938 in cash for a house with a sales price of $125,000 -- an $812 reduction from the normal 3%, or $3,750, cash requirement. In a high-closing-cost state, a veteran has to come up with $2,813 for the same loan -- a $937 reduction. The special treatment is not supposed to "supplant" the home loan benefits offered by the Department of Veterans Affairs, HUD says. But in certain circumstances, "this additional mortgage financing opportunity being provided by FHA may directly benefit" veterans.

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