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Veterans Struggle to Close on Adjustable-Rate VA Home Loans

MortgageNew federal regulations have stalled veterans from closing on adjustable-rate VA home loans until April, causing them to lose out on the lowest rates.

Salt Lake City – Feb. 11, 2015 – New mortgage regulations from the Consumer Financial Protection Bureau (CFPB) recently went into effect, and implementation has been a difficult, tedious task. It has created problems for some veterans looking to purchase or refinance homes over the next few weeks. Fortunately, Flagship Financial Group, LLC recently announced it is able to continue underwriting adjustable-rate VA home loans, and will continue to do so without problems while these regulations are being rolled out.

As of Jan. 10, the CFPB’s new regulations dictate that VA mortgage lenders must notify homeowners with adjustable-rate mortgages (ARMs) of any rate changes 45 days in advance. Previously, lenders only had to notify borrowers 30 days in advance.

Ginnie Mae, the Government Sponsored Enterprise (GSE) responsible for purchasing VA home loans, recently notified mortgage lenders that it would not purchase mortgage loans under the 45-day rule until it has purchased up the remaining 30-day loans on the market. The agency will begin to purchase new loans on April 1.

Since Ginnie Mae has put a hold on new ARM purchases, many mortgage lenders do not have the capital to close on ARM loans until April 1.

“Overall, these new regulations are great for veterans. It will give them more advance notice of rate changes so they can adjust their family budgets accordingly,” said Will Farrar, CEO of Flagship Financial Group. “Unfortunately, implementation has been a little rough. It’s a burden on lenders and consumers alike. The last thing a lender wants to do is disappoint a customer because they’re unable to close on a loan. The consequences are serious. It could mean someone is stuck paying a higher rate or loses out on purchasing a new home.”

This has presented a unique opportunity for Flagship Financial Group. The VA home loan lender has secured enough capital to continue underwriting loans for its customers during Ginnie Mae’s purchase freeze, and can help veterans close on ARMs in as little as two weeks.

“If your lender isn’t able to close on your loan until April 1, I encourage you to give us a call. We have enough money to continue underwriting adjustable-rate VA home loans,” Farrar said.

There are many benefits to going with an adjustable-rate VA home loan. They are a hybrid of conventional ARMs and traditional VA home loans. Which means that not only do VA hybrid ARMs give veterans the best available rate, but after three to five years (depending on the terms of the loan), the rate adjustment is capped at one percent per year. Conventional ARM loans do not have this cap.

“Veterans shouldn’t have to wait to close on VA ARMs. They’ve earned these benefits. They shouldn’t have to sacrifice them because a few regulations weren’t implemented as smoothly as they could have,” said Farrar. “We’re here to help. We just want to make sure veterans are getting the best rates available.”

For more information on Flagship Financial Group or VA home loans options, visit


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