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Military families with VA home loans offered help avoiding foreclosures

Military personnel and their families with VA home loans are not immune to the housing crisis, but efforts are underway to help them avoid foreclosure and stay in their homes.

The Department of Defense Homeowners Assistance Program was formed to help service men and women sell their homes if their home values ​​decline due to base closures or realignments. In 2009, it was expanded to assist military personnel and their families if DOD employees are killed or injured during deployment.

The program covers the difference between 95 percent of the home’s appraisal before a listing of the listing and the appraised value or sales price after the announcement. The government can also buy the property for 75 percent of the original price or cancel the mortgage. However, the program does not help service personnel if the value of their homes has fallen due to the housing bubble.

About 12,000 families asked for help through the program, according to a USA Today article. More than 20,000 veterans, active duty military personnel and reservists with VA home loans lost their homes through foreclosures last year, the most since 2003.

Citing figures from RealtyTrac, the newspaper said that foreclosure filings in zip codes near military bases were 32 percent between 2008 and 2010. Nationally, foreclosure filings increased 23 percent.

USA Cares, a nonprofit group, provides grants to financially distressed military men and women. “While the mortgage and real estate crisis has affected all Americans, military families with fewer options have been disproportionately affected,” the group states on its website.

VA home loans can provide significant benefits. Veterans, in addition to active duty personnel, reservists and members of the National Guard, can use government-backed mortgages to buy a home with no down payment. Mortgage loans with no down payment can be up to $ 417,000, up to $ 729,725 in high-cost areas.

Veterans can also use VA home loans to refinance their current mortgage at current mortgage rates, although mortgage amounts are limited to $ 144,000.

Borrowers pay a VA financing fee up front, but that fee can be included in the total mortgage amount or paid by the seller, and the borrower does not pay for private mortgage insurance. Home loans are made through government-approved lenders and are guaranteed by the government.

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