VA Housing: Guaranteed Loans, Direct Loans, and Specially Adapted Housing Grants [May 26, 2017] [open pdf - 972KB]
"The Department of Veterans Affairs (VA) has assisted veterans with homeownership since 1944, when Congress enacted the loan guaranty program to help veterans returning from World War II purchase homes. The loan guaranty program assists veterans by insuring mortgages made by private lenders, and is available for the purchase or construction of homes as well as to refinance existing loans. The loan guaranty has expanded over the years so that it is available to (1) all veterans who fulfill specific duration of service requirements or who were released from active duty due to service-connected disabilities, (2) members of the reserves who completed at least six years of service, and (3) spouses of veterans who died in action, of service-connected disabilities, or who died while receiving (or were entitled to receive) benefits for certain service-connected disabilities [...] Under the loan guaranty, the VA agrees to reimburse lenders for a portion of losses if borrowers default. Unlike insurance provided through the Federal Housing Administration (FHA) insurance program, the VA does not insure 100% of the loan, and instead the percentage of the loan that is guaranteed is based on the principal balance of the loan […] This report discusses these three types of housing assistance--the loan guaranty program, direct loan programs, and Specially Adapted Housing program--their origins, how they operate, and how they are funded. The report also has a section that discusses the default and foreclosure of VA-guaranteed loans."
CRS Report for Congress, R42504
Federation of American Scientists: http://www.fas.org/sgp/crs/index.html