The widow of an Iraq War veteran recently received the 20 millionth VA loan in the program’s nearly 70-year history.Elizabeth Carpenter and her 3-year-old son, Joey, secured financing for their Virginia home using the benefits earned by her late husband, Capt. Matthew Carpenter.
The West Point graduate died of cancer in December 2010.
“The 20 millionth VA home loan is a major milestone and is a testament to VA’s commitment to support and enhance the lives of veterans, service members, their families and survivors,” said Allison A. Hickey, VA’s undersecretary for benefits.
“As a result of their service and sacrifice, as a group, they prove to be disciplined, reliable, and honorable —traits that are ideal for this kind of national investment.”
The milestone comes at a time when this no-down payment mortgage is more important than ever
These government-backed loans are booming in a time of tight credit and mandatory down payments. Loan volume is up 300 per cent over the last five years.
VA loans tend to feature lower rates and more forgiving financial requirements than traditional mortgages. Right now, VA lenders are generally looking for a credit score of at least 620.
In comparison, the average FICO score for an FHA denial in May was 669. This past August, borrowers with credit scores of 740 and above accounted for 53 per cent of all loans, according to the National Association of Realtors.
They’ve also thrown some cold water on the “skin in the game” arguments surrounding Dodd-Frank and the qualified residential mortgage debate.
90 per cent of VA purchase loans come with no money down, yet they’ve exhibited the lowest foreclosure rate for the last 17 quarters for any loan program, according to the Mortgage Bankers Association.
“At a time when federal regulators are considering imposing a 20 per cent minimum down payment requirement for most conventional mortgages, the VA program, which is restricted to veterans, offers important insights on how to get families into homes with little cash upfront, and to keep them out of foreclosure, even in tough economic times,” syndicated real estate columnist Kenneth R. Harney wrote last fall.
That combination of security and flexibility, coupled with record-low interest rates, pushed VA loan volume to an 18-year high in 2012.
It’s not a perfect fit for every military borrower, but a loan program created to help boost homeownership for World War II veterans remains a lifeline for many who serve today.
“Without this program and all of the benefits we have received from the VA, we would not be here,” Carpenter told media members who gathered for a ceremony marking the 20 millionth loan.
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