In 2014 the VA (Veteran's Administration) Mortgage Program will celebrate its 70th anniversary of assisting Veterans in their home purchases. It all began in 1944 as part of the Servicemen's Readjustment Act (otherwise known as the GI Bill of Rights). This program continues to be an influential and vital part of the real estate and house financing game. This program does not give the loans but rather offers a guarantee on them, making it easier for veterans to purchase their dream homes.
Since 2007 the rate of VA loan origination has increased over 370%. That is a phenomenal increase. The reason for this may be the low interest rates and the tougher housing market.
Veterans are given many benefits of using this option for home buying. They have less strict requirements in terms of credit rating. In many cases little to no money as a down payment is also included.
Over the 70 years of its existence the VA mortgages have changed with the times. In many cases it has gotten better with age, showing more respect to our veterans. For example in the 90s it was adapted so that those serving in the military at least 6 years would qualify, rather than the very first requirements of being a WWII vet serving during a certain period of time.
In the 2000s the amount for which this program would guarantee increased, giving veterans more purchasing power. In 2004 loans above $144,000 would be guaranteed a quarter of the loan limit. This was to help combat the rising cost of homes.
Fast forward to 2013 where the VA program backed 630,000 home loans compared to 314,000 in 2010. Hopefully these numbers bode for a strong and long future for this program.
As it stands only an estimated 2 out of every 10 potential veteran home buyers could qualify for conventional financing. While these mortgages aren't the answer for all veterans they are an excellent possibility to consider.
Happy Birthday, VA Mortgages. Here's to many more years of lower VA interest rates and increased opportunities for our veterans!
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