The Department of Veterans Affairs (VA) published interim guidance related to the implementation of the Blue Water Navy Vietnam Veterans Act of 2019 (the Act) in their Circular Letter 26-19-23. The provisions of the Act that amend loan limits and loan fees will apply to all loans closed on or after January 1, 2020; however, the Circular Letter clarifies that all loans closed before January 1, 2020, must follow the current requirements, regardless of when the loan is disbursed or when the Loan Guaranty Certificate is issued.
Among other changes, the Act, which was signed into law on June 25, 2019, expands the maximum guaranty amounts for purchase, construction, and cash-out refinance loans greater than the Freddie Mac conforming loan limit (CLL) in certain circumstances which are detailed in the Circular Letter. According to the Circular Letter, the Act, “…does not change the maximum amount of guaranty entitlement available to Veterans for loans equal to or less than $144,000 regardless of the Freddie Mac CLL.”
The Act replaces the loan fee/funding fee table for the most common types of loans for all veterans for loans closed on or after January 1, 2020, and before January 1, 2022. Additionally, the Act adds a waiver of the VA funding fees for members of the Armed Forces who are serving on active duty and who can provide, on or before the date of loan closing, a certificate of military orders awarding the Purple Heart.
The Act also authorizes VA to establish policies enabling VA-designated appraisers to rely on third-parties for information related to appraisals; however, appraisers are not authorized to use third-party information before such policies are established by VA.