Obama Signs Veteran’s Bill into Law – VA Loan Limits Reinstated, ARMs Made Permanent
Legislation recently signed into law by President Obama reinstates higher VA loan limits and made permanent the U.S Department of Veterans Affairs ability to provide Adjustable Rate Mortgages (ARMs). The bill contains key changes that will extend housing benefits to more surviving spouses and allow military dependents to fulfill the loan program’s occupancy requirements. Currently, only spouses of those killed in the line of duty or of a service-connected disability have VA loan entitlement. Eligibility now extends to surviving spouses of veterans whose deaths were not service-connected, but who had permanent service-connected disabilities for at least a decade before their death. Additionally under this new measure, deployed service members and other VA homebuyers can have a dependent child live in a new home in order to satisfy the VA’s occupancy requirements. Currently, only a spouse can fulfill that requirement. This change will also allow married military couples to purchase homes while deployed.
In 2008, the Bush administration increased loan limits for government-backed mortgages to 125 percent of the local median home price. The higher limits – as much as $729,750 in the nation’s most expensive counties, fell to $625,500 last fall after Congress balked at passing another one-year extension. This bill reinstates the higher VA loan limits in the most expensive counties through 2014.