When President Roosevelt signed the GI Bill into law in 1944, he also approved provisions to begin low interest loans to Veterans looking to purchase their own homes, along with farming and business inventory. Soon, VA will guarantee its 20 millionth home loan, and the program is stronger than ever.
It’s not too hard to sell Veterans on the idea of a VA-backed home loan. As the only major loan type that doesn’t require a down payment, it also allows refinancing on existing loans, which was attractive to many Vets last year. Those who refinanced saved an average of $202 in 2012—a total of $300 million in savings.
Even in an unpredictable housing market, Veterans are finding their way to VA-backed loans. As the New York Times reports, VA-guaranty loans surged this past fiscal year:
Mortgages guaranteed by the Department of Veterans Affairs surged by 50 percent in the fiscal year ended Sept. 30, as tighter credit standards on conventional financing made these programs all the more attractive to current and former military members.
The department guaranteed almost 540,000 loans in fiscal year 2012, the most since 1994[…]
Since the loans are backed by the federal government, there’s no need for mortgage insurance, which can help Vets save even more. And if you’re a Veteran receiving disability payments, the funding fee, usually about three percent of the loan, is exempt.
Brandon Friedman, a Veteran of Iraq and Afghanistan, bought a house in the Washington, DC area a few years ago using a VA-backed loan, and his exemption from a funding fee saved him around $10,000.
“VA’s home loan program is one of the best benefits the government provides for Veterans, especially disabled Veterans,” he said. “It’d be great if more Vets knew about it.”
Check out our home loan resource page for more information, our frequently asked questions guide, and our eligibility page for more information. Andif you have any additional questions about the program, the Veterans Benefits Administration will be holding a live Twitter Town Hall tomorrow, October 18 at 3:30 PM EST. Follow @VAVetBenefits and use the hashtag #AskVA to ask your home loan question.