About The VA Loan Program

The VA Loan program is one of the great steps our Federal Government has taken to benefit home buyers and specifically Veterans and Active Duty personnnel. The Mission of the VA loan is to help veterans and active duty personnel purchase and retain homes in recognition of their service to the Nation. "All veterans and other participants in the program will be treated in a courteous, responsive, and timely manner. We will endeavor to operate in the most efficient manner possible to minimize costs and ensure the best use of the taxpayer's dollar."

History of the VA Housing Program

The Department of Veterans Affairs home loan programs serve a clientele which is diverse in many ways.  The only common denominator of this clientele is service in the Armed Forces of the nation.  Since the inception of these programs the objective has been to assist eligible veterans to become homeowners.  Veterans are assisted by making it possible for them to compete in the market place for credit with persons who were not obliged to forego the pursuit of gainful occupations by reason of service in the Armed Forces of the nation.  The VA programs are intended to benefit men and women because of their service to the country, and they are not designed to serve as instruments of attaining general economic or social objectives.

Cumulatively through September 1996, VA has guaranteed over 15.3 million home loans totaling over $562 billion to veterans to purchase or construct a home, or refinance another home loan on more favorable terms.  The VA home loan program has made mortgage credit available to many veterans whose loans otherwise would not have been made.  In this connection, although VA borrowers have been directly favored by the more liberal terms on those loans, it is also likely that these terms have induced a competitive liberalization of the terms on conventional mortgages, whose recipients have benefited as well.  As a result, the impact of the VA home loan programs on the economy and on the mortgage market vastly exceeds the actual volume of VA home loans.

Initial Objectives and Philosophy

The home loan guaranty program was originally conceived in 1944 as a part of an attack on the harsh aftermath associated with wars.  The overall objectives of this attack were to diminish to the greatest possible extent the economic and sociological problems of post war readjustments of millions of men and women then serving in the Armed Forces.

The program was one of the major innovations and a most important part of the original Servicemen's Readjustment Act of 1944, Public Law 78-346.  The first legal framework was set forth in Title III of that Act.  In a way, the loan guaranty program was advanced as an alternative device to a cash bonus, because it would be vastly less expensive to the Government, and because it would better serve the needs of veterans.

Continue>>>