Our best. Our finest. Our veterans. God bless you for your service to our freedoms and way of life.

The original Servicemen’s Readjustment Act, passed by the United States Congress in 1944, extended a wide variety of benefits to eligible veterans. The VA loan guarantee program was especially important to veterans. Under the law (as amended), the Veterans Administration (VA) is authorized to guarantee (or insure) home, farm, and business loans made to veterans by lending institutions. Congress established the VA loan program to help give our returning veterans a “hand-up” as they returned from their Tour of Duty.

The one thing in common was the returning soldiers’ average age was under 30. Today, over 18 million VA loans have been insured by this wonderful program. there were several advantages to the VA loan;
1. DD214 was a 100% financing benefit
2. “Stream-lining” greatly improved underwriting as a process.

There are other advantages, but those are the 2 most well-known. However, many Veterans are now facing retirement (whether career military or private employment) and can still refinance, but now find themselves in what I call the “30-year trap”. If you’re over 60 and ready to retire? You’re still looking at another 30 years of payments (or larger payments for 15 years). The ideal (next step) for the VA would be to introduce a VA Reverse Mortgage to eliminate the payments altogether and provide the Veterans with access to equity without requiring a refinance, the waiting time, the underwriting expenses, The mandatory payments, and the uncertainty of the interest rate markets.

Until that day arrives? Veterans may qualify for the FHA HECM HELOC and transfer their compound interest debt to a “simple interest” (Rule of 78) and user-friendly loan structure with many benefits and no risks. Every refinance carries the end result of “kicking the can” another 30 years down the road while consuming a very damaging portion of valuable retirement income. Once you hit age 55? It’s a virtual certainty the debt will outlive the Borrower. Regardless of your service to our Nation, that is not an ideal outcome; but, it IS the outcome many Veterans now face.

Look at this compare/contrast to your existing VA loan and see if you agree with us…this is a WONDERFUL alternative…

1. Name all the advantages to having mandatory mortgage payments each month, repeated 360 times…The FHA HECM HELOC has only VOLUNTARY payments.
2. The VA loan does not have a HELOC provision. this makes mandatory refinance the only option for getting valuable home Equity…The FHA HELOC provides a lifelong HELOC.
3. The VA loan forces the Veteran to Subscribe to the banking standard of a recourse HELOC with only a 10-year window to use equity, and then mandatory 20-year amortization…The HECM HELOC is guaranteed for the lives of the Vet and Spouse and has no payment requirement. It is also Federally insured, and cannot ever be called, suspended or reduced in value, and is guaranteed to add new equity for the rest of the Veteran’s lives (added daily to the credit line balance at the same rate as the mortgage rate)!
4. Within 30 days of the death of a borrower, the surviving Spouse must continue making the required payments until the home is sold, or is paid off…With the HECM HELOC? The Spouse endures no such hardship. They are contractually guaranteed to live there for the rest of their lives without required payments.

5. VA loans are mostly interest payments for a very long time typically 20+ years of paying more interest than principal)…With a Non-recourse loan? Why not make consistent “Dollar Cost Averaging” investments into any variety of investments. The “arbitrage” will allow the Veteran to use the money and make a much greater rate of growth by applying 100% of the mortgage payment towards the chosen investment vehicle principal instead of only 20-25 cents on the dollar as the VA loan demands.
6. As previously mentioned, using the FHA HECM HELOC (Reverse) also eliminates the requirement of making payments…WHAT THIS MEANS ALSO is the debt-to-Income ratio falls and may give the Veteran advantages like increasing their FICO score, improving their payoff and borrowing capacities, and other valuable outcomes.
7 There are also many new strategic uses for this program regarding taxation, Medicaid protections, and more!…Unfortunately, the VA loan cannot compete with all of these features. Adopting a new way to structure your long term debt makes a lot more sense and is much more affordable than the ongoing refinancing of existing debt. Despite what you’ve heard, the closing fees are very similar.

Finally, A reverse doesn’t “eat” your equity”. It allows YOU to eat your equity, or provide you more efficient ways of eliminating that debt while providing you free access to future equity if you need it. In addition, you don’t “sign over your home”. It goes to your Heirs as you deem appropriate, as it would with the VA loan you have right now. The wonderful difference is how this loan treats your family when compared to the VA loan. With the FHA HECM HELOC? There are no payments required for over a year. With the VA program? The Heirs must continue making payments until the home is sold or the debt is paid off. The HECM HELOC is a much nicer way to treat your family. It gives them time to act.

The VA loan was a great deal when you needed a great deal, but it cannot change or adapt to your changing life needs. It may be a good time to start using a style of mortgage that cannot harm you or your family and can only bring you good things.

God Bless you all, and God Bless our Nation.