REP. BROWN-WAITE’S LEGISLATION TO PROTECT VETERAN MORTGAGE BENEFITS PASSES U.S. HOUSE
Brown-Waite Bill Included as Part of Broader Veteran Benefit Measure
Washington, D.C. – September 16 – (RealEstateRama) — U.S. Representative Ginny Brown-Waite (FL-05) today announced that H.R. 6832, the Veterans’ Construction and Extensions Act, passed the House late last week on a bipartisan voice vote. In addition to other veteran related issues, H.R. 6832 included Rep. Brown-Waite’s legislation to extend two separate veteran mortgage benefits, keeping these innovative products from expiring, saving veteran homeowners money, and providing stability to a volatile mortgage industry. Rep. Brown-Waite’s bill, H.R. 6465, extends the demonstration project on adjustable rate mortgages (ARM), and the demonstration project on hybrid adjustable rate mortgages, two highly utilized and low-cost mortgage products for veterans. The extension that comprises Rep. Brown-Waite’s legislation is supported by both the American Legion and the Veterans of Foreign Wars and was included in the broader bill as part of a bipartisan effort to extend several expiring veteran related provisions of current law.
“This is a great victory for veteran homeowners,” said Rep. Brown-Waite. “I have been in close contact with my counterparts in the Senate, and am hopeful that this bill will quickly pass the other body and be signed into law. As we just saw this weekend with the takeover of Fannie Mae and Freddie Mac, the U.S. housing market is still in turmoil. Now is not the time to discontinue programs that provide stability and lower rates to our American heroes. I applaud Chairman Filner and Ranking Member Buyer for their bipartisan work with me on this legislation and look forward to its swift passage in the Senate.”
Traditional ARMs are loans in which interest rate adjustments occur on an annual basis. The VA-guaranteed ARM program limits the annual interest rate adjustments to a maximum increase or decrease of 1 percentage point. Additionally, interest rate increases for VA ARMs are limited to a maximum of 5 percentage points over the life of the loan. Hybrid ARMs function in a similar manner but have a fixed interest rate for a predetermined number of years at the start of the loan.
“One of the first bills I passed in Congress was legislation to modernize the VA home loan limits,” said Rep. Brown-Waite. “A lesson we have learned from the recent mortgage crisis is that too many borrowers used risky private sector high-cost adjustable rate mortgages that got them in over their heads and put them on the path toward foreclosure. VA loans, however, are protected from much of that risk because the adjustments to interest rates cannot change more than one percent each year, or five percent over the life of the loan. This stability ensures that more veterans and their families will keep their homes and continue to live the American Dream.
“The VA’s ARM programs have proven to be very popular alternatives to conventional home financing for our nation’s veterans,” continued Rep. Brown-Waite. “Typically offering a lower than normal initial interest rate, these ARMs make it easier for our veterans to obtain affordable financing when purchasing or refinancing their homes. At a time when the housing market has become so uncertain, this program provides our veterans with a safety net that lets them realize the dream of home ownership.”
Contact:
Charlie Keller 
202-225-1002
