The loan limit on VA-guaranteed loans is slated to move up to $729,750 again, staying there for two years now that House of Representatives has passed a Veterans benefits bill.
The Senate approved the measure (H.R. 1627) last week and the House passed it Tuesday by a voice vote. The measure is now headed to the White House for President Obama’s signature.
Congress allowed the VA loan limit to drop down to $625,500 on Jan. 1, following lawmakers’ decision to reduce the maximum loan limit on Fannie Mae/Freddie Mac loans to $625,500 from $729,750.
To ensure some access to government-backed jumbo loans, Congress left the maximum loan limit for Federal Housing Administration (FHA)-insured loans at $729,750.
As a result, veterans in high-cost areas had to rely on the FHA loans instead of the Department of Veterans Affairs program where they feel more comfortable, according to Rob Zimmer, head of external affairs at the Community Mortgage Lenders of America.
“Veterans deserve full access to their earned benefits and in some cases veterans had to go to FHA when they prefer to go to VA,” Zimmer said.
The VA benefits bill extends the $729,750 loan limit through yearend 2014.
VA does not have a maximum loan limit—rather, it has a maximum guarantee amount, which is 25% of the published VA loan limit.
At the start of this year, the VA loan limit in the Washington area dropped down to $625,500 from $818,750.
Veterans and active duty servicemembers living in San Diego County saw the VA loan limit fall to $477,000 from $537,500.