Interim Guidance for the Blue Water Navy Act of 2019
The following is excerpted from a notification from the Ohio Mortgage Bankers Association.
VA Releases Circular 26-19-23 on August 12, 2019
Circular 26-19-23, interim guidance for the Blue Water Navy Vietnam Veterans Act of 2019. Some key provisions of the Act, effective with loans closed on or after (and not before) January 1, 2020, are:
Veterans with loans amounts over $144,000, with full entitlement, will not need a down payment regarldess of purchase price;
The guarantee for loans at $144,000 and less will not change;
For Veterans who have previously used entitlement that has not been restored, the maximum amount of guaranty is the lesser of 25 percent of the loan amount OR the maximum amount of guaranty entitlement available. The maximum amount of guaranty entitlement is 25 percent of the Freddie Mac Conforming Loan Limit, reduced by the amount of entitlement previously used (not restored). In other words, the loan amount without a down payment could be 4 times the remaining entitlement. 25% down payment would be required over and above that loan amount.
Funding Fees will be as follows for all veterans, regardless of whether Regular Military, Reservist, or National Guard:
| Type of Loan | Downpayment | Percentage for First Time Use | Percentage for First Time Use |
| Purchase and Construction Loans | None 5% but less than 10% 10% or more |
2.30% 1.65% 1.40% |
3.60% 1.65% 1.40% |
| Cash-out Refinance Loans | n/a | 2.30% | 3.60% |
| IRRRLS | n/a | 0.50% | 0.50% |
| Loan Assumptions | n/a | 0.50% | 0.50% |
Purple Heart recipients will be exempt from paying the Funding Fee.
