Updated Excel Workbook for OHCS Federal VA Combo Loans Reflects VA Change that Eliminates VA Loan Limits.

Earlier this year I did a workbook HERE which illustrated the benefits of combining a no or low down payment federal VA guaranteed loan with the OHCS single family bond program.  

I also noted that veterans:

1. Do NOT need to be first time home buyers to use the OHCS bond program (so long as they have not used an OHCS or similar bond program in the past) 
2. With a 10% or higher VA disability rating do NOT pay a one time VA funding fee.
3. All VA home buyers have NO ongoing monthly mortgage insurance premium.
4. With VA loans also undergo a residual income test, which I have incorporated into the workbook.

Legislation has now changed the VA loan guarantee program, effective Jan 1, 2020 through Dec 31, 2021. Those changes

1. Eliminated the difference in funding fees between regular military veterans and Guard and Reserve veterans.
2. Slightly increased the VA funding fee for Regular Military and reduces VA funding fee for the Guard and Reserves.
3. Exempted current military members with a purple heart from paying the VA funding fee. 
4. Eliminated the VA loan limit (it had previously been set at the conforming limit).  Note that OHCS continues to have their own purchase price AND income limits and that has NOT changed with this update (but these limits could change mid 2020 once IRS completes their annual publication ). 

To incorporate these changes I created a new Excel workbook, embedded below and HERE, V2 CY 2020.  

This version includes a worksheet for first time use of a VA loan guarantee, a second worksheet showing affordability at different income levels, a third worksheet showing the former and future funding fees through 2021, and a fourth worksheet with links to related data sources. 

The first worksheet is password protected to avoid inadvertent data entries. The default entry is for a $400,000 purchase price home in Portland metro for a 3 person household; it would require an income of $80,793, below the current Portland metro HUD median family income of $87,900. (See below; after 5 years projected home equity increase with conservative appreciation would be $61,008).

1 Year and 5 Year Equity Increase Projections at Bottom of First Worksheet
At the bottom of the first worksheet I have added an estimate of home equity increase with and without a modest 1% annual home price appreciation; this does NOT include any value added from state OR federal mortgage interest or property tax deductions.

For a $400,000 priced home, total loan principal reduction at end of year 5 is $40,604 and price appreciation is $20,404, so combined loan principal reduction and price appreciation would total $61,008.


Originally created and posted on the Oregon Housing Blog.