After spending more than 20 years in the Navy and reserves, Ken Bates retired from the service in 2014. Today he serves as the Veterans Administration chairman for NAMB and is a passionate believer that our veterans have earned their VA benefits and works to ensure they receive them.

[caption id="attachment_7246" align="alignleft" width="150"] Ken Bates[/caption]

ML spoke with Bates, founder and branch manager of San Diego-based Military Home Loans, about new legislation in Congress that would affect VA loans if it were passed.

Is it possible that VA loan limits could be eliminated?

Yes, legislation in the House of Representatives (HR-815) would eliminate VA loan limits.  If that happened, veterans that are entitled, could receive 100% financing without county limits, meaning they could buy a $2 million home with no money down. Current VA county limits are set by the Federal Housing Finance Agency’s limits, which today are capped at $679,650. There are parts of the country, where the county limits place housing beyond their reach because they live in a high-cost area.

Could you give some examples?

For example, in San Francisco the median home price is $1.5 million.  A starter two-bedroom, two-bath house, located in a less-desirable neighborhood, costs more than $800,000. Over 25,000 veterans live in San Francisco, but there are only 206 active VA loans there. In contrast, in nearby San Joaquin county there are just over 35,000 veterans, but they have more than 3,400 active VA loans.

What would the effect be on veterans?

For veterans in high-cost areas, the impact could be massive. That’s especially true in the 66 counties in 12 states that saw their maximum entitlement slashed in 2015. Over 1.75 million veterans, 8 percent of all veterans, live in those counties and will have increased access to their VA benefit thanks to this bill.

California has 11 super high-cost counties with more than 680,000 veterans living there, including Alameda, Contra Costa, Los Angeles, Marin, Napa, Orange, San Benito, San Francisco, San Mateo, Santa Clara, and Santa Cruz.

With the current rule, crossing a county line can mean a significant decrease in buying power: A veteran who's buying near Pomona, needs to know if the home's in Los Angeles County ($679,650 limit) or San Bernardino County ($453,100 limit). With this change, that same veteran wouldn’t need to worry about the county he's  in, and could focus on other more critical matters to his family.