Serving the United States of America in uniform is a high honor and privilege. It is also a task that often involves hardship, deprivations, and it must be said physical danger. Those who dedicated years of their life to the armed forces are often thanked, honored, and revered by their neighbors, friends, and acquaintances.
As a country, we express gratitude by assisting them in re-adapting to civilian life when their enlistments expired. The U.S. Department of Veterans Affairs (VA) is central to this effort. Medical care, employment assistance, and educational assistance are part of this. Home financing is another component. As COVID-19 batters state economies, veterans are afforded mortgage relief due to COVID-19 as well.
About VA Mortgages
The VA has been in the housing business for almost 80 years. As World War II was grinding to a close, the federal government recognized that hundreds of thousands of soldiers, sailors, Marines, and airmen would soon return stateside.
Helping them re-integrate into the civilian economy would be a herculean effort so Congress passed the Servicemen’s Readjustment Act, otherwise referred to as the GI Bill of Rights, with a strong housing provision. The war was expensive enough; giving cash bonuses to veterans was considered but then ruled out.
A more sustainable idea was for the government to guarantee home loans for returning vets, who had little opportunity to establish extensive credit or build substantial assets while serving overseas.
In guaranteeing mortgages, the VA gives prospective lenders an insurance policy with regard to a loan applicant. Should the borrower default in making payments, the VA compensates the bank or finance company for a percentage of the financial losses.
Other federal agencies, like the U.S. Department of Housing and Urban Development and the U.S. Department of Agriculture operate similar programs albeit serving different constituencies. Such insurance mitigates the risk to the lender, allowing it to be more flexible with its particular credit guidelines.
Lower rates and better terms are also more likely. As a result, those that serve their country in uniform, at home and abroad, have greater opportunity to assimilate into the civilian economy when their military service ends.
Veterans Where We Lend
Like most every other state, Colorado maintains its own Department of Military and Veterans Affairs. In addition to overseeing the state’s Army and Air Force National Guard components, this division supervises veterans’ retirement homes, cemeteries, student loans, and targeted programs for women.
There are over 413,000 military veterans living in the state, nearly six percent are unemployed, and nearly 50,000 are homeless. The majority of veterans served during the Vietnam era with peacetime vets coming in a close second. Over 52,000 own businesses and the median income is $68,500. There are 23 VA hospitals, counseling centers and allied facilities in the Rocky Mountain State.
Idaho contains almost 123,000 veterans as of the latest census. The Idaho Division of Veterans Services oversees three retirement homes, a state cemetery for veterans, and a legal advocacy program. This agency also advises vets as to their benefits and entitlements under federal law.
The nine hospitals and outpatient clinics operated by the VA are spread throughout the Gem State. Unemployment is low among this population in Idaho; the median household income is $52,700. The state identifies 215 veterans as homeless. Most of those who served did so in Vietnam or during peacetime, closely followed by those who participated in the first Gulf War as well as the conflicts in Iraq and Afghanistan.
The median amount of annual veteran earnings in Oregon is over $57,000. While 1,300 of the 323,205 total veterans in state are homeless, over 31,000 are self-employed entrepreneurs, many with significant payrolls. The number of VA facilities stands at 23, including in-patient and out-patient medical care; psychological and behavioral treatment centers; and administrative offices.
Of the Oregonians who have served in the armed services, 40 percent did so in Vietnam, with the rest distributed among World War II, the Korean War, both Gulf Wars and peacetime service. The vast majority of vets are over 65 years of age.
The Oregon Department of Veterans Affairs serves this entire population by acting as a central clearinghouse for all of the resources and information they need. This additional support helps vets to deal knowledgeably with the VA and other public agencies.
The Washington Department of Veterans Affairs functions much like its counterparts in other states. In addition to supplementing the counseling and wellness programs of the VA, the WDVA supports job training, residences for the aging, a cemetery, and a general service center. All this is done to bolster the 582,000 veterans who call the Evergreen State home.
While the unemployment rate among vets sits at 6.4 percent, many live comfortably given the median income is almost $68,000 per annum. Nearly 1,400 vets are homeless, while close to 50,000 are business owners. VA presence in Washington is significant with 26 hospitals, clinics, and social service offices distributed throughout the state.
VA Mortgages in WA, OR, ID, and CO
There are over 13,000 VA-guaranteed mortgages on record in Washington. The average loan amount for 2020 is $362,004 while the total amount is valued at $4,763,616,070. In Oregon, the count of loan originations is 5,330. These obligations average out at $318,033 for a total dollar amount of $1,695,116,127.
Meanwhile, Idaho saw 2,871 VA loans so far with an average of $286,429. The total guaranteed by the VA equals $822,336,790. In Colorado, originations have reached $13,287 loans. Together, they average $359,179 and total $4,772,405,552. Needless to say, vets are not shy about availing themselves of this important benefit.
What Is the VA Response to COVID-19?
Since they are federally-backed, VA home loans fall under the effects of the CARES (Coronavirus, Aid, Relief, and Economic Security) Act. Since the onslaught of COVID-19 is declared a national emergency, CARES provisions call for mortgage forbearance relative to VA, and many other, home financing products. This means that qualified borrowers can receive a six-to-twelve month suspension of payment obligations if their income is negatively affected by the pandemic.
While this provision does not relieve mortgagors of their entire dollar-amount obligation to the lender, it does provide breathing room for distressed borrowers awaiting recall to full-time employment. No penalties are charged during the forbearance period, and lateness is not reported to the credit agencies.
However, this leniency program does not kick in automatically. The borrower must contact the mortgage servicer and make the request directly. It may be that you can afford partial payments and such an arrangement is also arranged under the forbearance regime.
Important to remember is that borrowers must still pay off the loan in full. What goes unpaid during forbearance will be tacked on elsewhere. It is not in any way a debt forgiveness program. How and when those monies are remitted is the discussion you will have with a service representative.
Your Lender Can Assist You
If you are a veteran who needs some veterans mortgage relief due to financial constriction from the pandemic shut-downs, contact your mortgage representative to discuss your options. It may be that you can continue to make regular payments but want the forbearance option as a fail-safe. You are not alone. Your lender can help you choose the right path suited to your unique financial situation.
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