Vets Get Help Refinancing Out of Subprime

Veterans that want to get out of subprime mortgages will find it easier to refinance into Department of Veterans Affairs guaranteed loans thanks to a bill recently passed by Congress and signed by President Bush on Oct. 10. The Veterans' Benefits Improvement Act allows veterans with conventional mortgages to refinance into a zero-down VA loan with a loan limit of $729,750. Previously, lenders could only offer to refinance those veterans into a $144,000 loan with 10% down and still get the full benefit of VA's 25% loan guarantee. "With these changes to the refis we can help more veterans -- where we couldn't before. So I am really pleased," said Judy Caden, director of the VA home loan program. The VA benefits bill (S. 3023) also extends VA's authority to guarantee 1-year adjustable rate mortgages and hybrid ARMs to September 30, 2012.