Home Loan Improvements

Public Law 108-454, the Veterans Benefits Improvement Act of 2004, increased the maximum VA home loan guaranty to 25 percent of the Freddie Mac conforming loan amount for a single family residence.  It also annually indexed the maximum amount of VA’s home loan guaranty for construction or purchase of a home to the Freddie Mac limit.  In 2005, the maximum amount for a home loan guaranteed by VA is expected to raise from $240,000 to $333,700.

This law reinstated VA-guarantees for adjustable rate mortgages (ARMs) through fiscal year 2008 and extends the Native American Home Loan program through December 31, 2008.

VA loan guaranties are made to servicemembers, veterans, eligible reservists and unmarried surviving spouses, often permitting the purchaser to obtain a competitive interest rate without a down payment.  A VA loan guaranty may be used to buy a home, build a home, repair, alter or improve a home, refinance a loan, or make certain improvements to the existing home.  Seriously disabled veterans also get help making their homes architecturally accessible.

Adaptive Housing Grants

Public Law 108-454 extended eligibility for specially adapted housing grants to veterans with permanent and total service-connected disabilities due to the loss, or loss of use, of both arms at or above the elbow. 

It also allowed volunteers to provide services in connection with the construction, alteration, or repair of multi-family transitional housing. 

Lease Terminations Under Servicemembers Civil Relief Act (SCRA)

Public Law 108-454 clarifies that dependents as well as servicemembers are covered by SCRA’s residential and motor vehicle lease termination provisions on joint leases.  The law does not change existing language in SCRA, but simply makes clear that when a servicemember terminates a lease due to mobilization or change of duty station, any spouse or dependent who is a co-signer is similarly released from further obligation to the lease.    

Public Law 108-454 also provided that SCRA’s lease termination provisions apply when the servicemember residing in a state outside the continental United States receives permanent change of station orders to any location outside that state, for example, from Hawaii or Alaska to the 48 contiguous states or a foreign country.