VA Loan Limits Reinstated, VA ARMs Made Permanent
As of the week of Aug. 6, President Obama is expected to soon sign a bill that will reinstate the higher VA loan limits and will make the VA ARM programs permanent. Both the House and Senate passed the "Honoring America's Veterans and Caring for Camp Lejeune Families Act of 2012".
Among other things, this bill will restore the higher loan limits for VA guaranteed loans through 2014 (these limits had expired at the end of last year). In addition, the bill will make the current ARM programs under VA permanent.
Adjustable Rate Mortgages (ARMs) are especially useful loan products for active duty military. Since military families tend to move often, an ARM or hybrid ARM can be a very reasonable choice. The VA does not allow lenders to charge veterans a prepayment penalty, and so the risk is low for the homebuyer if they move or chose to refinance. Authority for the ARMs was set to expire on Sept. 30, 2012.
The legislation, sponsored by Rep. Jeff Miller (R-FL) and supported in the Senate by Sen. Patty Murray (D-WA), should be signed by the President in the next few days.