The financial crisis of the years 2007 and 2008 disrupted the American housing market greatly. Many people lost their homes and market for existing homes decreasing by a huge percentage. A decade later, the Federal Reserve raised interest rates resulting to fall of mortgage production by about 7 percent. The VA construction loan lenders have come to the aid of many Americans by offering mortgage loans with no down payments and low-interest rates. The following are the five latest changes for VA construction loans.
No Upper Loan Limit on VA Mortgage
As of January 2020, VA program removed loan limits on a mortgage which has been of great help for military and veteran buyers. However, the removal of the loan limit does not mean unlimited loaning or borrowing without any down payment. One is required to have sufficient income and meet the credit requirements of the lender to qualify for the loan.
Increase in Funding Fee
The funding fee that you as the borrower pay in 2020 depends on your down payment and whether you have ever had a VA backed loan before. The increase in the VA loan funding fee is beneficial to non-exempt borrowers. If you have never backed a VA loan, it is categorized as first use and if you have, it is a subsequent loan. The funding fee increase is lower and will last for a limited period, unlike previous proposals.
Purple Heart Exemption
Purple Heart recipients are exempted from paying the VA loan funding fee like others who receive VA compensation. The military that is still on duty and was awarded Purple Heart were exempted from paying funding fee as a result of House Resolution 299 influence. Those who receive compensation are veterans who have medical issues connected to their time in service.
Elimination of VA Guaranty Limit
The Blue Water Navy Vietnam Veterans Act made changes to the VA program resulting in the elimination of the VA guaranty limit. You can apply for the most expensive home you want if you are applying using your VA loan benefits. The VA guaranty of your loan is about 25 percent of the total loan amount with no down payment.
Fees for Main Branches
Starting in 2020, the fees in all VA program’s main branches will be the same. The only exception will be National Guard and Reserve members who will pay slightly higher fees. These changes will be of great aid to all VA program borrowers including military and veterans.
VA construction loan lenders have been of great aid to Americans especially veterans and military men that are still in service. If you want to apply for a VA home loan but you do not know where to start, provided you have a Form DD214, we at Blake Mortgage will guide you. We are your loyal partners for all residential and commercial mortgages. Reach us at 480-699-1055 and we will help you determine your loan eligibility and guide you through the entire process. To learn more please visit here: https://www.blakemortgage.com/va-loan
