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Things to Know About the VA Loan Changes

One of the best loan products on the market just got a makeover, and you should be aware of the changes and how they impact those eligible to use it. We’re talking about the VA loan—a benefit for military home buyers that offers a loan with no down payment and a better-than-average interest rate—which has recently undergone some policy changes.


The first thing you should know is the changes are all to benefit a group of overlooked veterans from the Vietnam War. Veterans who served offshore have previously been denied the presumption of Agent Orange exposure, as did those who served on land between 1962-1975. The Blue Water Vietnam Veterans Act is a long-fought piece of legislation that was finally signed into law on June 25, 2019. The law puts into effect several key changes to the VA loan program to expand disability benefits to these veterans.

VA Funding Fee Changes and Exemptions

The funding fee for the VA loan has always existed to help offset losses. The fees have increased for most borrowers to between 1.4% and 3.6% depending on how much (if any) of a down payment is applied and if borrowers are purchasing their first or second home. In some scenarios, the fee actually came down, resulting in potential savings, but most will see an increase. One new exemption to the funding fee is for Purple Heart recipients. The thought here is that active-duty service members who have been awarded a Purple Heart will eventually qualify for disability through the VA, and those people are exempt from the funding fee.

VA Loan Limits

The biggest news is the removal of the VA loan limits. This is potentially huge news for borrowers looking to buy a home that costs more than the previously set county loan limits. Essentially, veterans with a full entitlement can now borrow as much as they’d like, as long as the lender is willing to loan it.


One last interesting new development is that appraisers can now make VA appraisals based on third-party information. This change is particularly helpful for those in remote areas and is expected to aid in speeding turnaround times.