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Ginnie Mae Increases Homeownership Opportunities for Veterans
Eliminates home loan limits for Americans who have served
Washington, DC – The Government National Mortgage Association (Ginnie Mae) today announced that, effective on September 1, 2007, it is eliminating the restriction on the size of mortgage loans guaranteed by the Department of Veterans Affairs (VA) that can be used as collateral for Ginnie Mae securities. Currently, Ginnie Mae limits the size of VA-guaranteed loans that can back Ginnie Mae mortgage-backed securities (MBS) to the conforming loan limit of $417,000.
Approximately 30 percent of the loans that back Ginnie Mae MBS are guaranteed by the VA. Unlike the Federal Housing Administration's (FHA) program, the VA program does not include a limit on the size of the guaranteed loan.
"We expect this change will expand the availability of low-cost financing and increase homeownership opportunities for America's veterans, particularly in high-cost areas, by encouraging lenders to make more VA loans," said Michael J. Frenz, Executive Vice President of Ginnie Mae. For example, although 10 percent of the nation's veterans live in California, less than one percent of the VA loans in the Ginnie Mae securities portfolio issued during the last two years were to California veterans, because loan limits were below most house prices in the state.
"Now, more than ever, America's veterans and their families have a greater chance to make their dreams of homeownership a reality, thanks to today's action by Ginnie Mae," said Judith Caden, Director of Loan Guaranty Service at the VA. "This change is another example of our joint commitment to ensure VA benefits keep pace with the needs of our veterans in today's housing market."
For the rest of this article please visit www.ginniemae.gov.
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