VA Loan Articles
News, updates, and explanations to keep you informed.
Refinancing Conventional Loans to VA Home Loans
In October of 2008, the Veterans’ Benefits Improvement Act was signed into law. It provides a variety of changes in benefits for military veterans, including the ability for qualified borrowers to apply for VA refinancing from conventional home loans into VA mortgages.
This aspect of the Veterans’ Benefits Improvement Act is intended for both conventional and subprime loans. According to the VA official site, “The new law makes changes to VA’s home loan refinancing program. Veterans who wish to refinance their subprime or conventional mortgage may now do so for up to 100 percent of the value of the property. These types of loans were previously limited to 90 percent of the value.”
The 2008 act brought other changes, too--the maximum loan amount has been raised for these refinancing loans. According to the Department of Veterans Affairs, “Previously, these refinancing loans were capped at $144,000. With the new legislation, such loans may be made up to $729,750 depending on where the property is located.”
This higher loan-to-value ratio combined with a higher maximum loan amount gives qualified borrowers greater opportunity to qualify for a refinancing loan. The changes will, according to the Secretary of Veterans Affairs, let the VA help a large number of vets stuck in sub-prime mortgage loans. “…Veterans in financial distress due to high rate subprime mortgages are potentially the greatest beneficiaries.”
While those with subprime loans are often given more attention in press releases covering the Veterans Benefits Improvement Act of 2008, conventional borrowers interested in this program should not hesitate to apply for VA refinancing.
A conventional-to-VA refinancing loan is a good way to potentially reduce interest rates or monthly payments and help vets avoid financial difficulty in a troubled economy. If you need more information on how the Veterans’ Benefits Improvement Act of 2008 affects you, call the Department of Veterans Affairs at 1-877-827-3702.
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