VA Home Loans

The Evolution of VA Home Loan Guaranty Service

Supporting Veteran Homeownership for 8 Decades (1944 to 2024)

FDR signs the G.I. Bill in the Oval Office, with (l to r) Bennett "Champ" Clark, J. Hardin Peterson, John Rankin, Paul Cunningham, Edith N. Rogers, J.M. Sullivan, Walter George, John Stelle, Robert Wagner, (unknown), and Alben Barkley; June 22, 1944. NPx 64-269.

• 1940s

  • 1944

    G.I. Bill of Rights Debuts
    Servicemen's Readjustment Act of 1944, Public Law 78-346

    Signed into law by President Franklin D. Roosevelt, the G.I. Bill provided eligible WWII Veterans with a loan guaranty covering 50% of their mortgage up to a maximum of $2,000. This entitlement could be used for the purchase of a home, farm, or business property. The loan guaranty was one of several benefits included in the bill to help returning servicemembers transition to civilian life after serving their country.

    President in White House: Franklin D. Roosevelt (1933-1945)

  • 1945

    1944 Act Gets Upgrades
    Servicemen's Readjustment Act of 1945, Public Law 79-268

    House and Senate hearings exposed several shortcomings in the loan guaranty program. The $2,000 limit was too small, the two-year expiration date on the entitlement was too brief, and requirement to repay the loan in 20 years resulted in monthly payments that were too high. This act fixed the flaws in the 1944 bill by increasing the guaranty amount to $4,000, extending the mortgage period to 25 years, and giving Veterans up to 10 years to use the benefit. These changes greatly increased the utility of the loan guaranty program.

    President in White House: Harry S. Truman (1945-1953)

  • 1948

    Disabled Veterans Receive Accessibility Grants
    Specially Adapted Housing Grant, Public Law 80-702

    The law provided Veterans who lost the use of their legs due to spinal cord disease or injury a grant of up to $10,000 to cover 50% of the costs of building a new home or remodeling an existing one. This law made housing affordable to Veterans reliant on wheelchairs for mobility. The Laurent Home is an example of a wheel-chair accessible home designed by a celebrated architect, Frank Lloyd Wright.

    President in White House: Harry S. Truman (1945-1953)

• 1950s

  • 1950

    Big Changes to Loan Benefit
    Housing Act of 1950, Public Law 81-475

    This law brought significant revisions to much of the loan guaranty benefit, including more favorable loan terms, an increase in the maximum guaranty, extension of eligibility to certain Veterans' widows, limits to loan costs and fees, and addition of a direct loan program and appraisal standards to help with property construction and improvement.

    President in White House: Harry S. Truman (1945-1953)

  • 1952

    Korean War Veterans Gain Access
    Veterans' Readjustment Assistance Act of 1952, Public Law 82-550

    This bill provided Veterans who served during the Korean War era on or after June 27, 1950, with loan benefits similar to those granted WWII Veterans in the 1944 GI Bill. Once again, the loan guaranty was offered to eligible service members and certain unremarried widows as an opportunity to establish homeownership on par with their non-Veteran peers.

    President in White House: Harry S. Truman (1945-1953)

  • 1956

    WWII Veterans Get More Time
    Public Law 84-898

    The 10-year time limit from date of discharge on the loan guaranty program in the 1945 bill meant that the entitlement had expired for almost all World War II Veterans by 1956. Public Law 84-898 extended the program for WWII Veterans through December 31, 1958.

    President in White House: Dwight D. Eisenhower (1953-1961)

• 1960s

  • 1960

    Loan Program to Pay for Itself
    Public Law 86-665

    Established the Loan Guaranty Revolving Fund from which to pay the operating expenses of the program.

    President in White House: Dwight D. Eisenhower (1953-1961)

  • 1961

    Expiration Dates Revised
    Public Law 87-84

    This law replaced the expiration dates for the loan entitlement with new formulas to give eligible borrowers additional time to utilize the program.

    President in White House: John F. Kennedy (1961-1963)

  • 1966

    Post-Korea Era Veterans Eligible
    The Veterans' Readjustment Benefits Act of 1966, Public Law 89-358

    This act made Veterans of the post-Korea era who served after January 31, 1955, eligible for VA-guaranteed home and farm loans and direct loans.

    President in White House: Lyndon B. Johnson (1963-1969)

• 1970s

  • 1970

    No More Deadlines for Use
    Veterans' Housing Act of 1970, Public Law 91-506

    This law's greatest change to the loan guaranty program was to remove any time limit on use of the entitlement. This restored the benefit to over 9 million WWII and Korean War Veterans whose eligibility had expired. It also allowed, among other revisions, refinancing of VA loans to allow for rate reductions and cash-out of equity on the property.

    President in White House: Richard M. Nixon (1969-1974)

  • 1974

    Entitlement Restored to 4M+
    The Veterans' Housing Act of 1974, Public Law 93-569

    Previously, only Veterans who had lost their homes to hazards or condemnation were allowed to re-use their VA loan benefit. This law extended the same privilege to Veterans who had paid off their VA- guaranteed loan and disposed of their property. This law restored the entitlement to more than 4 million Veterans who met this requirement.

    President in White House: Gerald Ford (1974-1977)

  • 1976

    Eligibility to Post-Korea Era Veterans
    The Veterans' Housing Amendments Act of 1976, Public Law 94-324

    The G.I. Bill's education benefits and housing guaranty were separated in this law, and the housing benefit was now made available to eligible Veterans who served after January 31, 1955.

    President in White House: Gerald Ford (1974-1977)

  • 1978

    Solar Energy Improvements
    The Veterans' Housing Benefits Act of 1978, Public Law 95-476

    Among other updates, this law granted authority to support Residential Energy Conservation Loans to improve a property through installation of solar heating, solar cooling, or a combination of both. It also allowed a higher interest rate for home improvement loans like these.

    President in White House: James Carter (1977-1981)

• 1980s

  • 1980

    Rate Reduction Loan Offered
    The Veterans' Disability Compensation and Housing Benefits Amendments of 1980, Public Law 96-385

    This act added the interest rate reduction refinancing loan, or IRRRL (pronounced "Earl"), aptly named for a loan with the specific purpose of reducing a VA loan’s interest rate with no impact on the Veteran’s entitlement.

    President in White House: James Carter (1977-1981)

  • 1982

    Funding Fee Waiver Initiated
    Public Law 97-253

    The adoption of the Funding Fee Waiver for some disabled Veterans and certain surviving spouses was included in this law, allowing them to utilize the benefit without having to pay into the loan administration fund.

    President in White House: Ronald Reagan (1981-1989)

  • 1986

    Appraisal Standards Set
    Public Law 99-576

    A new section was added to Title 38, U.S. Code to require adoption of qualification standards for appraisers as well an approved appraiser list. Lenders/Veterans are also given option for a second appraisal if either disagreed with first estimate of property value.

    President in White House: Ronald Reagan (1981-1989)

  • 1987

    Spouse Meets Occupancy Rule
    Public Law 100-198

    Given primary occupancy must be met for VA loan guaranty use, this law allows a spouse to meet this rule when a Service member is on active duty.

    President in White House: Ronald Reagan (1981-1989)

  • 1989

    VA Funding Fee Updates
    Veterans' Home Loan Indemnity and Restructuring Act of 1989, Public Law 101-237

    The establishment of a new Guaranty and Indemnity Fund for certain operations associated with the home loan guaranty program, and updates to the VA funding fee structure required for program use. It also called for a report by June 1, 1990, on results of a study on home loans to Native American Veterans.

    President in White House: George H. W. Bush (1989-1993)

• 1990s

  • 1990

    Report on Native American Veterans
    The Omnibus Budget Reconciliation Act of 1990, Public Law 101-508

    The Secretary of Veterans Affairs was required to conduct a study, jointly with the Department of the Interior concerning Native American Veteran participation in the VA home loan program and report to Congress by June 1, 1990. Native Americans were defined to include Indians, and "Natives" of Alaska, Hawaii, and the Pacific Islands.

    President in White House: George H. W. Bush (1989-1993)

  • 1990

    Eligibility for Persian Gulf War Veterans
    Public Law 102-23

    The VA Home Loan Guaranty was extended to Veterans of the Persian Gulf War and established August 2, 1990, as the beginning date for purposes of determining benefits eligibility.

    President in White House: George H. W. Bush (1989-1993)

  • 1992

    Eligibility for Selected Reservists/National Guard
    Veterans Home Loan Program Amendments of 1992, Public Law 102-547

    This amendment brought the first major changes since the 1970s. One standout established a new category of eligible Veterans: Selected Reservists (including National Guard) otherwise ineligible who completed a total of at least six years of honorable service (with an expiration of eligibility set for October 28, 1999). The law also introduced a pilot program to fund VA home loans on trust lands to Native American Veterans, a change made to reduce disparities in homeownership among this Veteran population.

    President in White House: George H. W. Bush (1989-1993)

  • 1994

    50-Year- Anniversary Updates
    Public Law 103-446

    Updates and additions include one-time restoration of entitlement for a Veteran who paid off loan but didn't sell the property; extended eligibility to Reservists who were discharged because of a service-connected disability (and certain Reservists' surviving spouses); waived the 24-month minimum active-duty service eligibility requirement if reduction in force; allowed Adjustable Rate Mortgage (ARM) refinances to VA fixed rate loans in some cases.

    President in White House: William J. Clinton (1993-2001)

  • 1996

    Permanent Authority for VA
    Public Law 104-110

    This law made permanent VA's authority for loans with negotiated interest rates, energy efficient mortgages, and the lender appraisal processing program, while it ended authority for ARMs.

    President in White House: William J. Clinton (1993-2001)

  • 1996

    Established Vietnam-Era Veteran Eligibility
    The Veterans Benefits Improvements Act of 1996, Public Law 104-275

    This law established the "Vietnam Era" Veteran as one who served in the Republic of Vietnam (2/28/61 to 5/7/75) and outside that region (8/4/64 to 5/7/75). It also defined period of service required for a Vietnam Era Veteran’s eligibility. A change was made to the Native American Veteran Direct Loan Program allowing VA to make direct loans to eligible Veterans to reduce interest rates.

    President in White House: William J. Clinton (1993-2001)

• 2000s

  • 2003

    Disabled Veterans Get More Benefits
    Veterans Benefits Act of 2003, Public Law 108-183

    This act allowed disabled active-duty service members the ability to apply for and, if found eligible, acquire specially adapted housing (SAH), and receive SAH grants prior to actually being processed and discharged from military service. It also made Chapter 37 benefit eligibility permanent to individuals serving six years in the Selected Reserves or individuals serving less than six years but who were discharged or released due to a service-connected disability.

    President in White House: George W. Bush (2001-2009)

  • 2004

    Loan Limit Increases to High-Cost Areas
    Veterans' Benefits Improvement Act of 2004, Public Law 108-454

    Part of the Veterans' Benefits Improvement Act of 2004 was to increase the VA loan limit in high cost areas. The law also oversaw major expansions in the program, particularly benefiting Veterans of the Iraq and Afghanistan conflicts.

    President in White House: George W. Bush (2001-2009)

  • 2008

    Foreclosure Crisis Report Due
    Veterans' Benefits Improvement Act of 2008, Public Law 110-389

    During the height of the housing crisis, Section 502 required the Secretary of VA to submit a report on how the mortgage foreclosures crisis was affecting Veterans, and assess ability of VA home loan guaranty program in preventing foreclosure for recently separated Veterans.

    President in White House: George W. Bush (2001-2009)

• 2010s

  • 2010

    SAH and Adaptive Technology Grants
    Veterans Benefits Act of 2010, Public Law 111-275

    Amendments to the Home Loan Guaranty included SAH Assistive Technology Grant Program to promote research and development of adaptive technologies that would support eligible disabled Veterans.

    President in White House: Barack Obama (2009-2017)

  • 2012

    Improving Access to VA Home Loans
    Honoring America's Veterans and Caring for Camp Lejeune Families Act of 2012, Public 112-154

    This Act expanded the VA Home Loan Program's benefits and extended the loan limits for Veterans in high-cost areas. Focused on improving Veteran access to home loans, particularly amidst the financial crisis and to severely disabled Veterans who required more medical support than those from previous generations due to higher survival rates.

    President in White House: Barack Obama (2009-2017)

  • 2019

    Safeguards for VA Refinance Borrowers
    Protecting Affordable Mortgages for Veterans Act of 2019, Public Law 116-33

    This law adjusted the seasoning periods for certain VA refinance home loans and requires VA loan lenders "to demonstrate a material benefit to consumers" when refinancing their mortgages.

    President in White House: Donald J. Trump (2017-2021)

  • 2019

    Reduced Fees for Purple Heart Recipients
    Blue Water Navy Vietnam Veterans Act of 2019, Public Law 116-23

    Change in loan limits and adjustment of funding fees, and new loan funding fee waiver to be extended to all eligible Purple Heart Recipients.

    President in White House: Donald J. Trump (2017-2021)

• 2020s

  • 2020

    Making Veterans’ Homes More Accessible
    Ryan Kules and Paul Benne Specially Adapted Housing Improvement Act of 2019, Public Law 116-154

    The Specially Adapted Housing (SAH) Grants were the main focus of this law, which gave the Secretary of Veterans Affairs authority to adjust eligibility of disabled Veterans who qualify for SAH funding as well as the number of grant usages available.

    President in White House: Donald J. Trump (2017-2021)

  • 2021

    Space Force Gets VA Loan Benefits
    William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Public Law 116-283

    An amendment changed "or air service," to "air, or space service" to include the U.S. Space Force in the list of eligible branches for the VA Home Loan Guaranty.

    President in White House: Joe Biden (2021- )

  • 2022

    Energy Efficiency and Residual Income
    Consolidated Appropriations Act 2023, Public Law 117-328

    This Act allows lenders to consider a borrower's report on energy cost savings as residual income when underwriting a VA home loan.

    President in White House: Joe Biden (2021- )

Editor's Note

Due to space constraints and character limits, not all laws (or all elements of laws) included. For detailed information on each law, visit www.congress.gov.

Sources

1. Legislative History of the VA Home Loan Guaranty Program, Department of Veterans Affairs, Updated 8/23/2006;
2. www.congress.gov.

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