A Brief History of VA Home Loans

Since 1944, the Department of Veteran Affairs has guaranteed over 18 million loans to veterans who were purchasing, constructing or refinancing their home.  The original law was part of the Servicmen’s Readjustment Act of 1944.  The original act only guaranteed loans up to $2000 and was essentially restricted to World War II Veterans.  Additionally, the original benefit had to be used within two years of the end of World War II.  The Act was a good idea, but the initial limitations made the Act unworkable.  As an example, by the time the war ended, real estate prices around the country had already exceeded the maximum guarantee amount.

The law was amended in 1945, doubling the maximum about of the guarantee (to $4000) and extended the loan repayment from 10 years to 25 years.  What really changed was the philosophy behind the act.  The original act was intended to accomplish two goals.  First, to assist World War II veterans in “readjusting” to civilian life; and, second, to give the post war economy a boost. 

The 1945 Amendment changed the philosophy to seeing a VA Loan as a general benefit of military service and recognizing the long-term economic and social benefits to homeowners.  Successive amendments to the act continued down this new philosophical path.  As an example, in 1950, the loan guarantee amount was again increased, the loan repayment lengthened and the benefit was extended to the unremarried widows of veterans. 

Nearly 70 years later, the benefit program has expanded to where over 14 million Americans are eligible for the program.  Futhermore, numerous companies such as www.lowvarates.com have been created to assist veterans in the technical aspects of obtaining the benefit.