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VA home-loan fees fall slightly for reservists

VA home-loan fees fall slightly for reservists

Source: By Rick Maze for the Army Times, December 8, 2003

Fees for using the veterans' home-loan program are being revised by Congress as part of an effort to make the benefit permanently available to reservists.


The changes, to take effect in January, will result in slightly lower fees for reservists -- but slightly higher fees for active-duty members and veterans of active duty who use the loan guarantee program.


Changes are included in the Veterans Benefits Act of 2003, which cleared Congress Nov. 20. President Bush is expected to sign the bill, according to congressional aides.


Besides the loan-program changes, the bill, HR 2297:


**Expands benefits for survivors of disabled veterans who remarry in old age.


**Allows GI Bill benefits to be used for on-the-job training.


**Permits service members with severe disabilities to apply for housing grants before their discharges.


**Requires the Department of Labor to provide counselors at overseas military installations to help people looking for post-service work.


The new fees on home loans will take effect Jan. 1. Until then, active-duty members and veterans of active duty will pay an origination fee for first-time use of the loan guarantee program equal to 2 percent of the value of a loan if they make no down payment. Reservists will pay a fee of 2.75 percent.


Beginning Jan. 1, the fee for reservists will drop to 2.4 percent and increase to 2.2 percent for active-duty members and veterans. Another change is scheduled for Oct. 1, when the fee for active-duty members and veterans will decline slightly, to 2.15 percent. Reservists will continue to pay 2.4 percent.


There are different and higher fees for anyone who already has used the loan program and is buying another home. The fee is 3 percent of the value of the loan until Jan. 1, when it will increase to 3.3 percent. The increase for subsequent use of the loan program is temporary, scheduled under the legislation to drop to 2.15 percent Oct. 1, 2011, and to 1.25 percent Oct. 1, 2013.


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