JANUARY 1 2020 new VA loan terms
Blue Water Act dramatically changes the VA home loan
program.
- ve VA compensation.
Blue Water Navy Vietnam
Veterans Act of 2019 Is a law that goes into effect January 2020
JANUARY 1 2020 new VA loan terms
Blue Water Act dramatically changes the VA home loan program.
In California high cost areas this is a game changer and listing agents need to be aware that Veterans making offers on million dollar homes may be the best offer they have on the table.
- No upper loan limit on VA mortgages as of 1 January 2020.
- An increase in the VA Loan Funding Fee for all non-exempt borrowers.
- Purple Heart recipients are now exempt from paying the VA loan funding fee the same as those who receive or are entitled to receive VA compensation.
Blue Water Navy Vietnam Veterans Act of 2019 Is a law that goes into effect January 2020
The law creates benefits for veterans with medical conditions presumed to have been caused by Agent Orange or "herbicide exposure" during service in Vietnam. You may not know all the chemicals that the enemy used to kill our men and women in the service of our country; but the after effects of these are great risk to health.
House Resolution 299 (HR 299) and addresses a variety of Vietnam-era, Korean War-era, and Gulf War-era issues associated with VA medical claims. But the law also includes other items in the bill including a removal of VA loan limits for approved transactions, and an increase in the VA Loan Funding Fee.
The Blue Water Navy Vietnam Veterans Act expands maximum guaranty amounts for purchase, construction, and cash-out refinance loans greater than the Freddie Mac conforming loan limit. WOW!
Loan Limits still apply for those who have more than one active VA loan, only partial entitlement available or those who have defaulted on a previous loan.
The Purple Heart Exemption For The VA Loan Funding Fee
The VA Loan Funding Fee is an expense associated with VA mortgages that most veterans must pay unless they receive or are eligible to receive VA compensation for service-connected medical issues.
Due to HR 299, those who still serve on active duty, and were awarded the Purple Heart, are now also exempt from paying the funding fee as of January 1, 2020.
The Resolution also provides for the first increase in the VA loan funding fee program in some time.
VA Guaranty Requirements on and after January 1, 2020
It is important to assure that eligibility has been reinstated.
super important documents needed from the Veteran:
- Revised 26-8320 (Certificate of Eligibility) showing restored entitlement, or
- Unrevised 26-8320, 26-1880 (Request for Determination of Eligibility), and Closing Disclosure evidencing previous property has been sold on or before Closing date of the new Loan
VA Loan Funding Fee Increases In 2020
The VA loan funding fee is on a sliding scale with the lowest fees reserved for first-time VA borrowers, and higher fees for those who have used VA loans before. Under the new 2020 rule, the VA funding fee for an active duty first-time borrower is increased to 2.30% and the subsequent use fee set at 3.60%.
Other VA loan funding fees are increased too; higher fees may apply for VA refinance loans and other transactions. Refer to the VA Funding Fee Chart and VA Product Matrix for additional details.
Type of Loan | Down payment | Percentage for First Time Use | Percentage for Subsequent Use |
Purchase & Construction | None | 2.30% | 3.60% |
5% or more (up to 10%) | 1.65% | 1.65% | |
10% or more | 1.40% | 1.40% | |
Cash-Out Refinance | N/A | 2.30% | 3.60% |
IRRRLs | N/A | 0.50% | 0.50% |
Loan Assumptions | N/A | 0.50% | 0.50% |
VA Loan Limit Rules
VA loan rules under the "Blue Water Act" remove the loan limits, however, the maximum loan amounts for VA loans funded with MWF remain at their current levels:
VA Non-IRRRL:
- FICO >=700: $1,500,000 max loan amount
- FICO <700: $1,000,000 max loan amount
VA IRRRL: $950,000 max loan amount
01/01/2020.
Additional Resources