Signed Into Law: Honoring America's Veterans and Caring for Camp Lejeune Families Act of 2012

President Barack Obama signed the The Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012, also known as H.R. 1627, into law on Monday, August 6 2012. The act changed a great many things, including some of the rules for VA mortgage loans.

Most of the changes to the VA loans program affect new purchase home loans, but do “trickle down” to refinancing loans because of the new opportunities for some to apply for new purchase loans and possible subsequent refinancing opportunities.

According to the official website of the House Committee on Veterans’ Affairs, “Under H.R. 1627, as amended, surviving spouses will be eligible for VA home loan guarantees for a period of ten years past the death of the servicemember/veteran/POW (disability rating thresholds apply).”

A dependent spouse with a VA loan permitted under H.R. 1672 should also be eligible to apply for a VA IRRRL loan provided he or she meets program criteria as currently listed. It’s possible that future amendments to the VA home loan program may include specific guidance for refinancing loans in light of H.R. 1672, so it’s important to check with your loan officer and/or the Department of Veterans Affairs for guidance before proceeding.

Another change signed into law with H.R. 1672 affects the VA Adjustable Rate Mortgage (ARM) loan program and its’ Hybrid ARM loan program. Until now, these programs were given a limited lifespan, which was extended for 2012. According to the House Committee on Veterans’ Affairs, “VA’s adjustable rate mortgage loan guarantee program shall be made permanent (ARM), as will VA’s hybrid adjustable rate mortgage loan guarantee (HARM).”

Another important development is connected to fees associated with the VA loan program. “The fee for VA’s Home Loan program will be waived for disabled servicemembers transitioning to veteran status under the legislation.” Look for further clarification on that issue in posts to come.

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