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Finding the money to put a down payment on a home is one of the biggest hurdles homebuyers have to face when they are ready to take the big leap from renting to buying. As an honorably discharged veteran, when it’s time to buy a home you have the advantage of getting special assistance that is not available to outsiders. Not only can you get a larger home loan, but you can do so without the need for a down payment of any kind. For those who qualify, money is available to refinance an existing mortgage or buy/build a new home of their own. 


Another benefit to VA home loans is that there is no private mortgage insurance (PMI) tacked onto the monthly payments. PMI is needed to protect the bank when a down payment is less than 20% of a home’s value. A borrower will pay a PMI until they are no longer considered to be high-risk by the lender. This happens after they accumulate a satisfactory amount of equity in a home. Veterans don’t have to worry about PMI payments. While this is already good news, veterans who qualify for benefits are going to get even better compensation because of a new law. 


VA disability benefits are being expanded to include a larger group of veterans that were exposed to a deadly chemical called Agent Orange during the Vietnam War. This law is an addendum to the Blue Water Navy Vietnam Veterans Act (BWNVVA), which provides for the needs of off-shore Vietnam War veterans. Now that over an additional 90,000 veterans are covered, the BWNVVA needs more incoming money to pay for these expanded benefits. That is why the VA is removing some of the previous restrictions on VA home loans. This update means that there will no longer be any type of cap on the amount that veterans can borrow for a home loan, and there will still be no PMI or down payment necessary.


With this law going into effect on Jan. 1, 2020, the VA will no longer cap the maximum value of a homeowner loan that a veteran can get. This does not mean that the VA itself is lending money to veterans. Instead, the government is, in essence, vouching for the credibility of the veteran applying for the loan, thereby removing the need for the assurance that down payment would bring to a lender.