New legislation that has just been approved by Congress will increase the limits on mortgages that are backed by the U.S. Department of Veterans Affairs.

This legislation, which has been supported by the National Association of Realtors, will make it easier for those who have risked their lives overseas to afford to purchase homes.

The VA home loan guaranty program was initially set up in 1944 to encourage lenders to offer affordable mortgage rates and terms to veterans who qualified for the program.

The new legislation has increased the loan guaranty amount for veterans to $83,425, which is 25 percent of the Freddie Mac and Fannie Mae conforming loan limits. This increased loan guarantee amount will allow veterans to afford houses priced over $300,000, which is especially beneficial for those who live in high cost areas such as California and Florida.

It is estimated that close to 90,000 additional veterans will now be able to take advantage of the VA home loan program because of the increased guaranty amount.

With the government guaranteeing 25 percent of mortgage given to each veteran, qualified veterans are expected to be able to borrow up to four times the new guaranty amount without ever even forking over a down payment.

According to the new legislation the new VA loan guarantee amount will be updated each year to allow for adjustments.

The updates to the VA mortgage program are sure to help out many of the thousands of soldiers that are fighting in Iraq right now, many of whom would otherwise be unable to afford homeownership.

President George W. Bush is expected to sign the bill that will officially pass this legislation in the near future.

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