Evening star., 1951-12-26
Veterans
Guide
By Thomos M. Mol

are turning a cold shoulder to
many veterans seeking home loans
guaranteed by the Veterans Ad-
ministration.
The reason, according to VA
sources, is that the VA authorized
interest rate isn't attractive
enough to lenders.
The VA allows lenders to charge
vet 4 per cent per year interest
on the loans. But lenders now can
get Az or per cent interest from
other borrowers.
One VA source estimates that
at least out of 10 vets seeking
home loans are being turned down
because of this.
The estimate is an off-the-cuff
guess, however, because the VA
doesn't get involved in the lending
until the loans actually are made
Officially. the VA says there are
a number of areas-mainly in
large cities-where loan money is
scarce.
Congress authorized the VA ad-
miniStrator to change the interest
rate whenever he felt the need.
Administrator Carl Gray's Office
says a change isn't contemplated
now.
The only advice Mr.. Gray's Of
flee gives to vets having difficulty
getting loans is to scout around for
the money.
Congress also authorized the ad-
ministrator to make direct loans
to some vets in areas where no
loan money is available. There's
no use applying for such loan.
however, since all the money Con-
gress set aside for direct loans has
been used up.
There's no way of knowing when
more money will be available for
direct loans.
Essentially, here's how the VA
loan setup works:
The VA says to any eligible vet
it will stand behind him if he can
get a home loan from a lender.
Then the vet goes to a lender and
asks if he may borrow the money.
If the lender thinks the vet is a
good credit risk and wants to lend
the money under the VA condi-
tions. he okays the loan.
The VA then appraises the home
on which the loan is to be made
and does a little checking on the
vet, too. If the VA okays the loan,
the vet has himself home.
To be eligible for the VA loan
guarantee the vet must have
served at least 80 days in the
armed forces between September
16. 1910, and July IS, 1947. He
must have been discharged under
other than dishonorable condi-
tions. If he served less than 90
days. he must have been dis
charged for a disability due to
service to be eligible.
Loans are guaranteed for the
purchase of an already built house
or for the construction of one.
The loan also can be for repairs
or alterations of a house which
the vet already occupies, or for
payment of delinquent indebted
ness, taxes or special assessments
on home.
The amount of the guaranteed
varies with the circumstances.
Most of the VA home loan busi-
ness centers upon a guarantee of
so per cent Of the loan up to a !
maximum guarantee of $500.
The loan may be made for a.
maximum of 25 years on homes
costing $4,000 or less, 20 years on
homes costing more than that.
The down payment a lender may
require ranges from 4 per cent up
to As per cent, depending on the
price of the house. A vet may not
borrow the down payment from
another lender.
When the loan is made, the VA
makes the veteran a gift of 4 per
cent of the guaranteed part of the
loan, up to maximum of $l60.
This must be applied to the prin-
clpal of the loan.
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