2019: Big year with big changes ahead for VA loan program


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A year full of milestones for the historic VA loan program was also a big one for Veterans and military homebuyers nationwide.

The VA backed more than 624,000 loans in Fiscal Year 2019, with loans to purchase homes up for the eighth year in a row. Younger Veterans and service members are fueling the continued growth of the program.

Nearly half (45 percent) of all VA purchase loans in FY19 went to millennial and Generation Z Veterans, a burgeoning trend that shows how this hard-earned benefit is still meeting its original mission.

So many younger civilians are stuck on the homebuying sidelines, unable to build the kind of credit and savings needed for conventional financing. With the VA loan benefit, younger Veterans and service members don’t face the same hurdles, making homeownership a possibility today rather than years from now.

VA loans give qualified buyers the ability to purchase with:

  • No down payment
  • No mortgage insurance
  • More forgiving credit guidelines
  • The lowest average fixed interest rate on the market

Another major obstacle for civilian buyers is student loan debt. That landscape looks a lot different for VA buyers because of their education benefits.

Younger Veteran buyers have emerged as an economic force in communities across the country. But so many of them wouldn’t be in position to plant roots without a benefit introduced two weeks after D-Day.

Celebrating 75 Years of Success

VA loans celebrated their 75th anniversary this year, and in many ways they’re more important than ever. The program was part of the original GI Bill of Rights signed into law by President Franklin Delano Roosevelt on June 22, 1944.

The Loan Guaranty Service marked this special milestone with a 75th anniversary celebration in early June in Washington, D.C. Speakers included Dr. Ben Carson, Secretary of Housing and Urban Development, and VA Under Secretary for Benefits Dr. Paul Lawrence.

At the same ceremony, attendees also marked the VA’s 24 millionth loan guaranty, which came earlier this year.

While the loan program looks different three-quarters of a century later, the basic idea is still so relevant and vitally important. VA loans exist to level the playing field for those who serve and sacrifice to protect the American Dream.

That mission has proved critical in the wake of the housing crisis a decade ago. Veterans have turned to VA loans in waves during a time of tight credit and tough lending. Historically, VA loans have accounted for about 2% of the mortgage market. They’re now about 10%.

This program has backed more than 8 million loans over the last two decades, with nearly 70% coming within the last 10 years.

Greater awareness of the benefit and what it can do for Veteran buyers has been a key byproduct of all that growth. VA loans aren’t the right fit for every Veteran, but knowing about all of your mortgage options ensures you can make the best financial decision possible.

Big Changes for 2020

This year also brought some important updates to the loan program that take effect in 2020. The biggest win: Effective loan limits are going away for qualified buyers.

In previous years, Veterans who wanted to purchase above their county loan limit needed to make a down payment for what’s otherwise a $0 down program. Removing these limits helps Veterans and military families maximize their budget and their benefit, especially those stationed or living in more expensive housing markets.

Changes are also coming to a key loan fee.

Congress slightly increased the VA Funding Fee for most buyers for the next two years. But there’s also a new exemption for Purple Heart recipients on active duty, and National Guard and Reserve loans now have the same fee structure as regular military.

The VA Funding Fee applies to most purchase and refinance loans and helps keep the program running. Veterans receiving compensation for a service-connected disability and select others don’t pay the fee at all.

After a decade of incredible growth, the VA loan benefit heads into a new one stronger than ever.


Chris Birk is the director of education for Veterans United Home Loans and author of “The Book on VA Loans: An Essential Guide to Maximizing Your Home Loan Benefits.”

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VAntagePoint Contributor

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Comments

  1. Mat    

    Agree with Larry. Debt to income ratio is the key when talking about loans.

  2. Debra Hopps    

    I am a 22 year mortgage originator, 2 years ago I found out that the VA loan was designed to remove all obstacles to home ownership for the Veteran. Do you know that if you purchase a new home with a VA loan that it is possible to have the seller pay the closing costs, pay points to get a lower rate and pay off credit balances, credit card debt and the balance on your car loan. Go figure, you walk in with debt, walk out with keys, a new house and no debt. The key is to work with a knowledgeable Realtor and Loan Officer. I have called lenders all over the country, spoken with realtors and found that most do not know what I am talking about. Over the last 2 years I have been able help my clients by making them aware so they can take control of their VA loans and get the most from the benefit.
    When I asked a Head Underwriter for VA why so many Real Estate and Mortgage Professionals were unaware of how to maximize the VA home loan benefits I was told that there was not good communicate. So I am communicating…

  3. One Veteran to another    

    100% disa bbn led Vet. I closed on my home 02/2019.. I was also a mortgage underwriter. I closed on my home in 24 days
    I went through Veterans United…
    -show award letter, must say total & perm disabled
    (That gets you around the 2yr employment)
    – 60 day bank statements
    – VA certificate of eligibility feom ebennefits
    – upload copy of DD214
    – rental history, they going pull credit and ask anyway
    -after you find a home, go ahead and get a homeowners insurance qoute

    *As soon as you get your 100% disability, make sure you get your student loans waived. I did this 1st before applying it litterally can be done in 45days, mines took about 35… Thats fast… this lowers your debt to income ratio and student loans won’t be counted against you…

    Im single no kids, make sure you dont open no new credit card debt or finance anything major i.e. furniture, car etc….

    Veterans united will work with you. If you need a reference at Veterans United let me know. I was also able to get the $500 va appraisal waived. Only had to bring $124 to close. $350 inspection, $250 earnest money, and $750 in due diligence fee… bought a 4bed, 2ba, 2 car garage 2072 sqft on .39 acres…

    Hope this helpa

  4. Gary Allin    

    I recently recently received a 100% service-related disability rating. I have untreatable stage 4 cancer, approved for hospice care and will pass soon leaving a wife and minor daughter.
    About 25 years ago we bought our first VA house in another county. We moved to our present county about twenty years ago and transferred our certificate of eligibility to buy our present second VA house. About ten years ago we refinanced this second VA house for a lower interest rate, again transferring our certificate of eligibility. My question is will my wife be still be able to get a VA home loan when she sells this house and needs to move into another house closer to where she works in this county? Thank you.

  5. Kathy Vasel    

    Hi Denise,
    You can actually go on the loan with your boyfriend so that your income can be counted for qualification purposes. You will be required to put a 10% down payment.
    For the other Veterans- your income will need to qualify you to buy your new home. They take into consideration all of your monthly debt and the new payment of your new house, taxes and hazard insurance. I hope this helps.

  6. Marjorie King    

    I recently purchased a home with my VA loan, paid my VA funding fee. The rates went down after a few months which could have saved me hundreds of dollars a month. However, i would have to pay another VA Funding Fee which made it unrealistic to refinance while increasing my loan. There should be an amount of time that refinancing can be done with no VA funding fee. How advantageous to save money on my mortgage so I can pay off other debt, improve my home, or help the economy in other ways.

  7. Larry Potts    

    It’s all about debt to income ratio that determines the amount of loan they will guarantee.

  8. Paul Chunglo Jr.    

    I have to agree with a previous comment. Every news article and magazine I pick up these days are boasting about some new or even old Veteran benefit that they are bringing it to the attention of so many Veterans so they can grab this new or old benefit which in fact hardly anyone actually qualifies and receive it. But it sure looks and sounds great to the public ear or eye. California has a nice fat book that is full of all kinds of benefits that hardly anyone qualifies for. When I first saw that book and after reading 99% of it I found that I qualify for the National Parks Pass. 500 pages of benefits and a 70% Service Connected Disabled Veteran qualifies for 1

    But it sure looks good and sounds good to the public.

    1. Cody Milner    

      No kidding! I was able to use without a hitch back in the 90’s. The loan was paid off. I never missed a payment. I sold the house just before I left active duty thinking I would be able to buy a new home when I returned to my home state. I still have not been able to get a loan since! It’s all BS!!!

  9. Marlin John Brandys    

    You sound salty Fred. VA disability is not a government welfare jackass. So sad you weren’t somehow disabled, try harder next time P.O.G.!

  10. Charles Cunningham    

    I purchased a home in 1990 and was required to pay mortgage insurance. Was I scamed or is this a new policy?

    1. Daphne Carter    

      That doesn’t sound like a VA loan..

  11. Edward stanlay    

    Considering the cost of houses, WHEN are they going to loosen the restrictions on buying a condo, which is a lot more affordable than a house??? And easier to manage. What’s up with this constant hassle of buying a condo? They publish some stupid list with few condos on it as “approved”. What’s the hassle??? Let us buy condos!!! I don’t want the hassle of a house.

  12. Christopher Campbell    

    I was 28 when I first used the va loan. Score was 557. 100% service connected income.

  13. Veteran    

    The best scenario for a Combat Veteran, 100%.
    If you’re one who has family/children, great!
    Then these kinds of programs are for you, foundational for the sake of family. If you’re a single Veteran, like myself.
    Then CASH OUT… Take YOUR MONEY, that you’ve EARNED, and go enjoy the rest of your life. Accessed SSD & VA Disability. Worked and PAYED INTO Social Security and accessing a monthly payout. I’m not a family person, had a shit show childhood then combat in the military.
    The VA has attempted to “treat” me, but, to no avail.
    Time is of the essence, Veteran Brothers & Sisters, go enjoy your life before the whole thing goes belly up…TRUTH

  14. Dawnita Wilburn    

    Are you sure he was only qualified for 30k? If you were looking at the award certificate with 39k on it, that’s not the limit. As long as you can afford to pay you can purchase a home for 100.+k.
    You have to read the VA handbook, see the websites. Go to lenders that are familiar with VA loans. Use Federal Credit Unions at military bases.

    1. jamb    

      I thought as much too. 30k is not really that much unless thats what he asked for.

  15. Fred k    

    Veterans first mortgage sucks. They are very stringent with veterans who are not disabled like me who has worked a 9 to 5 job for the last 20 years and with exceptional credit. They seem to only approve disabled veterans that have disability pay i.e govt wellfare.

    1. Michael Lomuscio    

      Government welfare? That not a veteran talking or perhaps your one of those who never left the states in some nowhere job then claim stolen valor to help you deal with the fact that you didn’t mean anything nor did you ever do anything to protect this country no doubt a millennial child!!

    2. Brian jennings    

      Government welfere…you wrong for that…anyhoo…got my house.

    3. Better than you    

      Govt welfare? Aren’t you just a friggen turd veteran. Maybe one day your punk ass will come down with some lung issue and will fight for this so called govt welfare.

    4. Patrick Poulsen    

      I wish that was true…. Im 100% disabled… Ok credit…. Wont touch me with a 10 ft pole

  16. Ronald Q Christy    

    Only hurdles I had with the VA home loan program were simple stuff like having a sufficient work history, and fixing my credit by consolidating student loans. Then it was finding a good me. This was the hardest part. I’m a realtor so I made that part rocket science.. These are simple things that are diy.
    Another thing is I went through Navy Federal credit Union. I recommend them to anyone whom needs help with their mortgage and banking needs. Thanks for your service…

  17. Michael Jaguars Urban Golub    

     Which lenders will do this?

    previous years, Veterans who wanted to purchase above their county loan limit needed to make a down payment for what’s otherwise a $0 down program. Removing these limits helps Veterans and military families maximize their budget and their benefit, especially those stationed or living in more expensive housing markets.

    1. Chanelle Brenae    

      To Frank K.

      Watch your mouth for I worked and served in the same military as yourself! I am NOT a government welfare recipient….Who the phck are you to discredit any of your battle buddies? If you have such exceptional credit them go outside of the V.A. Loan funding program or stop complaining about those who are given a chance to buy a home etc….who cannot work due to the severity of our illness and/or injury! You sound like someone who served less than a year.. claiming benefits as if you actually did something special. What a joke and a “EDDICK” for what you said.. You’re a service member..figure out that term ..that’s what we called whining ass soldiers!

  18. Jim Volstad    

    Two words: Dave Ramsey. If you don’t have at least a year’s worth of savings, maybe you should wait. It sounds like you have a lot of vehicle debt. Cash is the only way to buy a depreciating asset like a vehicle.

    I’m a retired soldier, disabled veteran, and a VA Volunteer.

    800+ credit score.

  19. Justin Madewell    

    Im a service connected disabled veteran and have been ran around in circles trying to get my va loan benefits. They say im qualified for the award letter but not qualified for loans unless i sale my vehicles and everything i own of value to put $5000 in savings before i can get approved. I have a 712 transunion credit score a 756 Equifax credit score and a 635 expieran credit score and make $3171 a month without paying rent my bills are about 1000 a month. I live minimal and simple. Im sick of seeing thease articles and feel like they are lies to make anything va related sound good right now. I feel my service to this country cheated me from a better future not given me one its destroyed my health family finances credit and my faith in the people of this country. I hope and pray that one day the bureaucratic red tape and greed disappears from our society.

    1. Will Sherman    

      Dude. You still have to make enough to qualify for the home lol. Nobody is running you around in circles but yourself.

    2. Will Sherman    

      I hope one day ignorant people will stop acting like victims but here we are…

    3. Donte p    

      I’m service connected as well and filed bankruptcy with worst credit score then you and paid more in monthly expenses with 2 vehicles on finance and only put $1000 down and was able to get a home so you really can’t say it’s a lie …….I went thru veterans united and they helped a lot .

  20. Denise Stahl    

    My boyfriend qualified for a VA loan but for only 30000. How can you buy a house with that? We have been together for 25 years and won’t count my income. My bankruptcy discharge is June 22. But told I have to wait 2 more years. He will be 70 and I will be 68. Both have steady income. I have raised my credit score. But have to wait 2 more years really ?! We have been on time with rent for 5 and a half years.

    1. Janet L. Miller    

      Sorry to hear you’re having trouble but I’m a disabled veteran also and you need to contact “Veterans First Mortgage” company in Utah. I kept seeing their ad come up on Facebook and finally decided to give them a chance. Lucky for me I ended up with a great person who took me step by step through the va loan process and I ended up with my first brand new home. Don’t know who you’ve dealt with to have been done the way you are but try Veterans First Mortgage. I just recommended them to my son and he’s a 100% disabled veteran and will have his first home after new year. God bless you and hope all works out for you.

    2. Christyna Orr    

      It sounds like you may be using a mortgage company that doesn’t necessarily specialize in VA loans. If everything you stated is true, I believe a mortgage rep that sincerely knows what they are doing, and is well versed in the features of the VA loan will be able to help you.
      I say this because I am nearly 100 percent positive you do not have to be legally married to your boyfriend for him to choose to put you on the loan. And I am positive that bankruptcy only hinders VA loan use for about 2 years. Now this fact may only pertain to the veteran but I believe it would be across the board for parties on the loan.
      I’m short, find a better mortgage company. Don’t use your local bank that has probably never touched a VA loan. Maybe call the company someone previously posted here or maybe New Day USA. I see a lot of advertisement for them.
      Best of luck!

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