December 18, 1998
Several years of retooling are paying off for the longest-operating veterans home loan program in the nation.
Leading the restructuring and re-engineering to meet new conditions and different needs in the Golden State's volatile real estate market, Veterans Affairs Secretary Lee Bennett announced that the California Veterans Board has approved lower interest rates for the Cal-Vet Home Loan Program.
Bennett anticipates new Cal-Vet loans for veterans who are first time home buyers, or who otherwise qualify for revenue bond financing, will be at an interest rate of 5.95 percent effective Jan. 1, 1999.
"Veterans using general obligation bond financing should also see lower rates for a new Cal-Vet loan," commented Bennett who said "they should be charged an interest rate of 6.65 percent, also effective Jan. 1, 1999."
Prior to implementation by the California Department of Veterans Affairs, both interest rate changes must first be approved by the Veterans Finance Committee of 1943, scheduled to vote on the Proposal December 16.
The committee members are the governor, secretary of veterans affairs, finance director, state treasurer and the controller.
"I am pleased that the board approved a 5.95 percent interest rate for veterans who are first time home buyers or who otherwise use revenue bond funding. I trust the Veterans Finance Committee will do the same," Bennett said.
"I am also delighted that the board approved a 6.65 percent rate for veterans obtaining subsequent loans, or who are not qualified to use revenue bonds because their income exceeds the maximum allowed for revenue bonds for a Cal-Vet loan."
Customarily, borrowers receive an interest rate that stems from the underlying bond borrowing and operating cost.
"Existing loan holders now paying a 6.95 percent interest rate will remain at that rate until other actions are completed," said Bennett.
"The department remains committed to making good on further reducing the loan rate for those veterans currently in the program who are now paying an interest rate of 6.95 percent.
"However, we cannot do this until we refinance a portion of the underlying debt for current contract holders at an overall interest rate less than the bonds currently require."