VA Loan Guarantees for O'ahu Mortgages Dropped this Year by $125k, Despite Housing Prices Rising
After the Department of Veterans Affairs (VA) made changes to its loan guarantee program resulting in a $125,000 drop in the maximum loan guarantee for Honolulu, U.S. Senator Brian Schatz (D-Hawai`i) is requesting that the Federal Housing Administration (FHA) and the VA take O"ahu's high cost of living into consideration and increase the loan guarantee limit for the City and County of Honolulu.
"O'ahu has some of the most expensive housing in the country. We need to do more to help our veterans afford to live here, not less," said U.S. Senator Brian Schatz. "Any change in the VA's calculations that makes it harder for veterans and their families to buy and own a home is unacceptable. This is an important program that helps veterans achieve the American dream after serving our country, and it needs to accurately reflect the cost of owning a home in Hawai`i so more families can afford to stay here."
"The new loan limit will make homeownership unobtainable for a lot of our veterans," said Tony Dias of Veterans United. "My initial thought was that this was a typo, but was assured by VA it was not. I believe that once the facts are presented to the powers that be, this will be corrected to allow those who defend our country to own a piece of it."
Limits on VA loan guarantees for home mortgages on O"ahu have dropped from $750,000 in 2013 to $625,500, despite median single-family home prices on O"ahu rising to $684,000 this year.
A $125,000 decrease in the level at which the VA will offer loan guarantees could result in higher down payments and increased financing rates for veterans and their families. Last year, more than 5,000 families in Hawai`i relied on VA loan guarantees.