For vets, the economic stimulus plan falls short
WASHINGTON -- Oops! When Congress and the White House put together the recent bipartisan $150-billion economic stimulus package, they raised the maximum mortgage limits in high-cost areas for Fannie Mae, Freddie Mac and the Federal Housing Administration.
But lawmakers neglected to include a similar increase for VA-backed loans. While the limits of the other three programs now extend to $729,500 in the highest-cost areas -- at least through Dec. 31 -- VA loans remain capped at $417,000.
For home buyers such as Greg Rasnake, a lawyer and disabled veteran who works for the federal government, the $417,000 VA limit is a deal-killer. He, his wife and children moved to the Washington, D.C., area a year ago from Oklahoma. Since then, they've been searching for a single-family detached house in the D.C.'s Virginia suburbs but have been unable to use the VA loan guarantee program because of the $417,000 ceiling.
"There's just no way you can find anything here where that limit comes even close," he said. "You'd think that in a time of war, when you're doing a stimulus bill and raising all the other loan limits, you might remember the vets. But that didn't happen."
As a result of the omission, areas of the country with some of the highest concentrations of veterans and high housing costs -- California, Maryland, Virginia, the District of Columbia and Florida, among others -- are effectively cut out of the stimulus package's benefits when it comes to VA loans. Mortgages backed by the VA are especially attractive because they allow qualified veterans to buy houses without a down payment.
Without a legislative fix, the situation won't change.
You might ask: How could this happen? How could a wartime president, a speaker of the House who represents high-cost San Francisco with its extensive military installations, an entire Cabinet-level agency, plus Veterans Affairs committees in the House and Senate all fail to include the VA program along with generous loan limit increases for Fannie, Freddie and FHA?
Asked for comment, the Department of Veterans Affairs declined to discuss the matter.
But House Veterans Affairs Committee Chairman Bob Filner, a California Democrat who represents Chula Vista, was blunt: "I think it was out of ignorance," he said. "Nobody thought about it, so this just slipped through."
