Capito Measure to Fix Vets Omission Included in Broad Anti-Foreclosure Legislation
Amendment Will Apply Housing and Mortgage Support to Veterans
The House Financial Services Committee today approved a measure authored by Rep. Shelley Moore Capito (R-WV) to address a serious omission in the Economic Stimulus Act of 2008. The Capito amendment would give veterans increased access to federally guaranteed loans through the Department of Veterans Affairs (VA).
As enacted, the Economic Stimulus Act extended conforming loan limits for loans backed by the Federal Housing Administration and other organizations, but not those guaranteed through the VA.
"This was a glaring omission in the original bill," said Capito, the ranking member on the House Financial Services Subcommittee on Housing and Community Opportunity. "As we move forward with serious discussions about how to counteract the housing crisis, it is only prudent that we extend support to our service veterans. With these adjustments, veterans will have a range of additional financing opportunities and geographic flexibility when purchasing a new home."
Capito's measure will be included as an amendment to the FHA Housing Stabilization and Homeownership Retention Act. The expanded conforming loan limits for the VA Guaranteed Loan Program would mirror the stimulus package's temporary increases in loan limits for mortgages backed by the Federal Housing Administration (FHA) and Government Sponsored Enterprises (GSE). Under the VA-administered program, the federal government guarantees 25 percent of the conforming loan limit.
Federally guaranteed loans are made by private lenders for borrowers to purchase an owner-occupied home. With the guarantee, the borrower may obtain more favorable financing terms because the lender faces less liability for loss.
"With this amendment, veterans will have access to enhanced support through key aspects of our economic stimulus legislation," noted Capito. "I'm glad to know that we now have a legitimate opportunity to correct the original oversight."