High cost areas see adjustments to the Government VA Home Loan Program in 2012. Although VA loan limits for most areas will remain unchanged, reductions to the $0 down maximum Veterans home loan eligibility are expected to affect some borrowers. Current homeowners looking to refinance and first-time home buyers who apply for VA loans in America’s most sought-after cities may be concerned about the changes.
VA Home Loan Centers disclosed the 2012 $0 down VA home loan limits today. Barring any congressional action, the new $0 down VA loan limits will be implemented on January 1, 2012, and will expire on December 31, 2012.
The new limits are based on the area median home price and will apply to all properties financed with VA loans. The changes to the loan program will affect over 130 counties out of the 3,234 counties where the home loans are available.
The most significant changes to the loan program will affect certain high cost areas. Those areas that have been selected will see a reduction in the no-money-down maximum loan amount guaranteed by the United States Veterans Administration (VA).
Unless specified, the current 2011-2012, $0 down loan limit for most areas of the United States will remain unchanged at $417,000. However, in some areas, the reduction will be more than $460,000.
The counties most impacted by the new $0 down loan limits will be Pitkin, Colorado, and Nantucket, Massachusetts, who will see their loan limits drop from a 2011 high of $1,094,625 to their new 2012 VA entitlement level of $625,500 (each). San Francisco, Alameda, and Marin counties will also see a significant decrease from their 2011 limit of $1,000,000 to a new 2012 $0 down loan limit of $625,000.
“VA Home Loan Centers anticipates that only a small fraction of borrowers will be impacted by these changes,” said Philip Georgiades, Chief Entitlement Officer for the VA Home Loan Centers. “The reduction in median price means more deserving veterans will be able to afford a home of their own.”
Although congress has the ability to pass legislation that will allow the Veterans Administration to raise the loan limits and has done so in the past, they will not lower the limits of VA loans to amounts less than the levels announced today.
The Veterans Administration loan program allows buyers to finance 100% of the purchase of an existing or new construction property containing 1-4 residential units. Current homeowners eligible for the program may refinance their homes up to 90% of the new loan limit for their area. All Veterans Administration home loan borrowers must certify that they will occupy the property as their primary residence.
Although the government-guaranteed mortgage program does not have a maximum loan amount, borrowers seeking to increase their loan amount above the 2012 $0 down VA loan limit for their area may do so but will be required to contribute a down payment.
To stay abreast of any congressional action that will increase the 2012 VA loan program, please visit https://www.vahomeloancenters.org.
VA Home Loan Centers (http://www.vahomeloancenter.org)
VA Home Loan Centers is a qualified lender of mortgage loans to United States Veterans. The VA loan program helps veterans, active and former duty military, and certain spouses of wounded, M.I.A. or K.I.A. United States service personnel achieve the ultimate American dream: home ownership. Services provided by VA Home Loan Centers include real estate representation such as VA loan short sale processing, purchase assistance and VA loan application processing. VA Home Loan Centers offers beneficial loans to all eligible veterans and their families. It is easier to qualify for a loan through VA Home Loan Centers than other loan programs because they offer higher front-end and debt ratios as well as the no down payment, no closing costs option (VA no/no). Other benefits include the ability to finance the funding fee, no mortgage insurance premiums, no prepayment penalties, low interest rates and monthly costs. VA loans available include 15-year and 30-year fixed mortgage rates. Borrowers who apply for their VA loan directly through VA Home Loan Centers may also be eligible for a rebate of up to 1.5% of the total loan amount. You can call 888-573-4496 anytime to learn more or to apply for a VA loan.