VA Loan Reader Questions: Maximum VA Loan Maturity Dates
A reader asks, “I know VA loans can finance up to 30 years. Is there any way to raise the length of the lending time to 32 years?”
The VA Lender’s Handbook, Chapter Three, has the rules which govern the area of VA loan maturity dates. According to the Department of Veterans Affairs, the maximum length of time a loan can be issued for is 30 years and 32 days.
The short answer to this reader’s question is no.
The VA Lender’s Handbook goes further, stating, “In addition, every loan must be repayable within the estimated economic life of the property securing the loan.” That means that the home should, under the rules, still be salable when the final payment is due–the borrower is not theoretically stuck with a property that has no value, hence the phrase “remaining economic life”.
How does the VA measure the length of the loan? “The period for repayment of a loan is measured from the date of the note or other evidence of indebtedness.”
There are even provisions in the VA rulebook for loans that are issued with final payment dates that exceed the “30 years and 32 days” rule. “VA regulations provide that any amounts, which fall due beyond the maximum maturity automatically, fall due on the maximum maturity date. Thus, if a lender inadvertently makes a loan that exceeds the maximum maturity, it may still be subject to guaranty.”
“However, the regulations also limit the amount that can be collected as a final installment, such as, they prohibit excessive ballooning. The holder of a loan that violates this provision may desire to correct the situation through means which are legally proper in the jurisdiction.”
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