Home Loan Program Going Strong Despite Tight Market
WASHINGTON – With mortgage rates at historic lows, Veterans and military personnel continue to use the Department of Veterans Affairs (VA) home loan program in record numbers to purchase a home or refinance their existing loans.
“Home ownership is one of the foundations of the American dream,” said Secretary of Veterans Affairs Eric K. Shinseki. “VA is honored to administer a benefit that for two-thirds of a century has profoundly affected the lives of our Veterans, our military Servicemembers, and their families.”
Since the VA Home Loan program began in 1944 as part of the original GI Bill, VA has helped Veterans by guaranteeing more than 19 million home loans, valued at more than $1 trillion. During the past four years, the number of Veterans VA has helped purchase a home has risen by 63 percent.
VA’s foreclosure rate for the last nine quarters and serious delinquency rate for the last six quarters have been the lowest in the housing industry, even when compared to prime loans, according to the Mortgage Bankers Association’s National Delinquency Survey.
In a time where other no-downpayment programs are virtually non-existent and mortgage credit can be difficult to obtain, Veterans and Servicemembers have an avenue to obtain financing and take advantage of historically low rates through the VA home loan program.
Most Veterans, Servicemembers, Reservists and National Guard members, as well as some surviving spouses, are eligible for the program, which provides an opportunity for borrowers to qualify for no-downpayment home loans as well as regular and interest-rate-reduction refinance home loans.
VA-guaranteed home loans are made by banks and mortgage lenders, with VA ensuring payment of a portion of the loan if the borrower fails to repay the balance.
A unique aspect of VA’s program is a commitment to help borrowers keep their homes if they encounter financial difficulties. During the past decade, VA loan specialists have helped more than 150,000 families hold onto their homes when threatened by foreclosure.
Shinseki attributed the “professionalism and savvy” of VA employees and the “unshakeable sense of responsibility” among Veterans and military personnel as key factors for maintaining a low foreclosure rate on VA-backed home loans.
VA’s loan specialists can intervene on a Veteran’s behalf with the loan servicer to explore home-retention options, including repayment plans, loan modifications, and forbearance. When home retention is not an option, VA can help arrange a compromise sale or a deed-in-lieu of foreclosure, both of which are less detrimental to borrowers than foreclosure.
More information about VA’s Home Loan program is available online at www.homeloans.va.gov or by calling toll-free at 1-877-827-3702.
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