Veterans and military service members will have more borrowing power but will pay slightly higher fees when they use VA home loans in 2020.
The changes are part of the Blue Water Navy Vietnam Veterans Act of 2019, signed into law in June and effective Jan. 1, 2020. The new law eliminates VA loan limits and increases the VA funding fee. It also provides disability benefits to certain Vietnam War veterans and their children.
VA loan limits are the maximum loan amount the Department of Veterans Affairs can guarantee without borrowers making a down payment. VA funding fees are one-time fees borrowers pay in lieu of mortgage insurance to help cover the government’s costs for backing the loans. If a borrower defaults, the VA repays the lender a portion of the loan.