The Blue Water Navy Vietnam Veterans Act of 2019 was signed into law on June 25th, 2019 by President Donald Trump. Vietnam veterans who served off the coast of Vietnam and were exposed to Agent Orange now have disability benefits extended to them. The Act also makes significant changes to VA loan down payment requirements and the VA funding fee.
VA Loan Down Payment Requirements
Current VA guidelines require that a veteran provide a 25% down payment on the difference for loans that exceed the county loan limit. County loan limits are set each calendar year by the Federal Housing Finance Agency. After January 1st, 2020, veterans will no longer need to meet any VA loan down payment requirements, regardless of county loan limits. This significant change allows veterans the ability to finance the full loan amount up to 100% of the purchase price or refinance amount of a home.
VA Funding Fee Changes
All veterans, except those with a disability rating, will see changes to VA funding fee requirements beginning January 1st, 2020. Comparatively, the changes will be an increase for most veterans from the current amounts. Reserve or National Guard members will enjoy a reduction when putting money down or home equity equivalent to active-duty. Below I have compiled a comparison table for current and future funding fee percentages.
|Purchase & Cash-out Transactions|
|Current||Jan 1, 2020 – Jan 1, 2022|
|Type of||Down||First-time Use||Subsequent Use||First-time Use||Subsequent Use|
|Regular Military||None to <5%||2.15%||3.3%||2.3%||3.6%|
|5% to <10%||1.5%||1.5%||1.65%||1.65%|
|Reserves/National Guard||None to <5%||2.4%||3.3%||2.3%||3.6%|
|5% to <10%||1.75%||1.75%||1.65%||1.65%|
Unless extended the down payment and funding fee changes will sunset on January 1st, 2022.