No Cap On No Money Down VA Loan After January 1st

Buying a home for veterans will get a little easier come January 1, 2020, especially those veterans moving up to a more expensive home, as a result of the Blue Water Navy Veterans Act of 2019 signed into law by President Trump in June 2019.  The primary focus of the Act was to provide disability benefits to veterans who served in Vietnam, it also made significant changes to the VA Home Loan benefit available to all veterans.  The VA home loan changes go into effect on January 1, 2020.  Below are highlights of the changes to the VA home loan benefit:

  • Conforming Loan Limits – There will no longer be a limit, or cap, on the amount for a no-downpayment home loan to a veteran.
  • VA funding fee increase – The VA charges a funding fee to support the VA home loan program.  The fee is currently 0.15% for Veterans and Servicemembers and on January 1st will increase to 0.30%.
  • Purple Heart – The VA funding fee will be waived for active Servicemembers who have earned a Purple Heart.
  • Native America Direct Loan – As of January 1st, the existing cap of $80,000 will be removed for Veterans using their entitlement for a VA Native American Direct loan to purchase (or build) a home on Federal trust land.

To find out more about the changes to the VA home loan program, click on the button below to connect with Mike McCarthy,

President Trump Signs Bill To Eliminate Cap On VA Loans

This past Tuesday night, President Trump signed into law H.R. 299, the “Blue Water Navy Vietnam Veterans Act” was signed into law by President Trump on Tuesday night. H.R. 299, which, among other things good for veterans, eliminates the cap on VA Loans.  Currently, the VA can only “guarantee” (they insure 25% of the loan amount for lenders, which is why lenders are willing to make 100% loans to veterans) loans up to the limit established by the Federal Home Loan Mortgage Corporation Act (FHLMCA).  Currently, the loan limit is $484,350 however, after the new law goes into effect on January 1, 2020, the VA will be able to provide their guarantee to lenders on loan amounts of any size for veterans.

This is a huge victory for veterans as well as for the real estate industry.