Funding Fee

Of all the changes made by the Veterans' Housing Act of 1970, the removal of the delimiting dates on veterans' entitlement had the most salutary effect.  The expired unused entitlement of nearly 9 million World War II and Korean conflict veterans was revived.  The entitlement of every eligible veteran remains available until used.  A veteran's entitlement is now insulated against periodic intervals of stringency in the availability of mortgage capital.  The refinancing loan provision was born out of concern for veterans who had purchased homes at high interest rates.  The reasoning behind the provision was that such veterans should have the opportunity to avail themselves of lesser interest cost when rates come down.  This new authority, however, permits refinancing for any reason.  There are millions of veterans who have built up substantial equities in their properties and who can now use their GI loans to cash in on these equities.  The VA loan program now affords veterans the opportunity to realize cash by refinancing paid down loans and this gives them the means to make improvements in their homes, to pay for educating their children, and to accomplish other worthwhile purposes.

Taken as a whole, the Veterans' Housing Act of 1970, restructured the loan guaranty and direct loan programs so that the future of those programs will be much more active and dynamic.  The Veterans Housing Act of 1974, Public Law 93-569, enacted December 31, 1974, contained a number of provisions which further expanded VA home benefits.

Continue>>>