NAR applauds new loan guaranty limits for veterans

The National Association of Realtors applauded Congress for improving housing opportunities for our nation's veterans by passing the Veterans Education and Benefits Expansion Act of 2001 be-fore they adjourned for the year.

According to an NAR news release, the bill raises the loan guaranty amount on mortgages backed by the Department of Veterans Affairs nearly 20 percent, from $50,750 to $60,000. This increase, the first since 1994, will allow veterans to borrow up to $240,000 toward the purchase of a home. More than 29 million veterans and service personnel are eligible for VA financing.

President Bush has signed the bill into law.

The VA loan home loan guaranty program, created under the GI Bill in 1944, encourages private lenders to offer favorable home loan terms to qualified veterans. Under this program, the government guarantees 25 percent of the mortgage loan amount, enabling veterans to borrow up to four times the guaranty $240,000 with no down payment.

"Raising the veterans home loan guaranty amount will help millions more veterans become homeowners, particularly veterans in high-cost housing areas. We applaud Congress for increasing the veterans home loan limit to better reflect the cost of buying a home today and thus improving every veteran's chance to make the dream of homeownership a reality," said NAR President Martin Ed-wards Jr.

Since the last time the VA home loan guaranty limit was raised seven years ago, the conforming loan limit on mortgages purchased by Fannie Mae, Freddie Mac and Ginnie Mae has increased substantially, now standing at $300,700 for single-family homes in 2002.

The National Association of Realtors is a trade association representing ap-proximately 800,000 members.