By Derrick DePledge
The U.S. Department of Veterans Affairs has stepped into another controversy in Hawaii.
The VA's limit on home loan guarantees in Honolulu for 2014 is $625,500, down 17 percent from last year's limit of $750,000.
Hawaii has among the highest home prices in the nation, so the lower limit could price some active-duty servicemen and veterans out of the housing market. The median home price in Honolulu is $684,000.
The VA has previously been embroiled in a protracted dispute with the state over its handing of home loans on property with rainwater catchment systems.
Both U.S. Sen. Brian Schatz and U.S. Rep. Colleen Hanabusa -- rivals in the Democratic primary for the U.S. Senate -- have appealed to the VA over the lower loan guaranty limit.
From a Schatz request to the VA and the Federal Housing Administration:
O’ahu has some of the most expensive housing in the country. We need to do more to help our veterans afford to live here, not less. Any change in the VA’s calculations that makes it harder for veterans and their families to buy and own a home is unacceptable. This is an important program that helps veterans achieve the American dream after serving our country, and it needs to accurately reflect the cost of owning a home in Hawai'i so more families can afford to stay here.
From a Hanabusa letter to Eric Shinseki, the Kauai-born VA secretary:
This proposed reduction accounts for a 17% cut to the guaranty limit, and will substantially impact a county where housing prices rose nearly 7% over the past year. In addition, I question whether it is appropriate to set a limit in Honolulu that is the same as other areas in Hawaii, as Honolulu has been cited as having the second highest cost of living in the country, after New York City.
The announced 2014 VA Loan Guaranty limit in Honolulu will have an adverse effect on veterans trying to secure home ownership, a tenet of the American dream, resulting in higher financing rates and larger down payments. In light of that, I would like to ensure that the current guaranty limits reasonably advance the VA’s mission of helping Servicemembers, veterans, and their families buy, repair, retain or adapt homes for their personal occupancy.
We owe it to the men and women who served honorably in our military to provide excellent care and services. This is one of the most important missions of our nation. Therefore, I am requesting further review be conducted on the impacts of reducing the 2014 loan guaranty in Honolulu County.