Unless Congress moves quickly, limits for Department of Veterans Affairs home loans in America’s high-cost counties will soon be reduced.

The American Legion is calling upon congressional representatives to make good on their commitment to ensure veterans and servicemembers have access to sustainable and affordable housing. If Congress doesn’t act before Dec. 31, limits for the VA Home Loan Guaranty program in high-cost counties will drop.

“We worked long and hard, then saw a wave of support just before Veterans Day to pass a jobs bill for veterans and other related initiatives,” American Legion National Commander Fang A. Wong said. “It’s a genuine disappointment to see that momentum fail, now that Veterans Day has passed.”

VA loan limits for high-cost counties were raised in the wake of the financial crisis but are scheduled to roll back on Dec. 31, from $729,750 to $625,000 per applicant. A lower cap in high-cost markets means some military families will face untenable down payments that put home ownership beyond their reach.

“Veterans returning from America’s longest war should have full access to the safest loan guarantee program in our nation,” Wong said. “These limits help level the playing field for military families who are stationed in costlier parts of the country, or who simply want to put down roots in communities they’ve come to call home.”

Twice this fall, Congress included proposals to extend limits for VA loans –“ only to pull them from consideration later. The most recent occasion was in the VOW to Hire America’s Heroes Act, signed into law last week by President Obama.

“The VA home loan program helps fund the law just signed by the president,” American Legion Legislative Division Director Tim Tetz said. “If we drop the loan limits, that may mean fewer veterans will apply for these loans, and thereby put programs to hire more veterans in jeopardy.”

Tetz said that recently passed legislation to extend Federal Housing Authority (FHA) loan limits would do little to help most military borrowers in high-cost counties, where the minimum FHA down payment on a $650,000 home would be nearly $23,000. “The average VA borrower has less than $7,000 in assets, and 90 percent get their VA loans without any kind of down payment,” he said.

American Legion Economic Division Director Joe Sharpe said thousands of veterans and active-duty servicemembers live in VA’s 140 high-cost counties, spread across 19 states and the District of Columbia. “We shouldn’t be forcing these individuals, who are middle-class Americans living in high-cost districts, to either make higher down payments or else use the FHA program,” he said.

A tight credit climate has made the VA Home Loan Guaranty program even more important. VA loan volume has soared 135 percent since 2007. At the same time, these flexible, no-down-payment loans continue to exhibit the lowest rate of foreclosure of any major loan product on the market.

“We urge Congress to keep its bargain with our nation’s veterans and extend these loan limits without delay,” Wong said. “We’ve asked so much of our veterans, especially the most recent generation. To reduce these limits is tantamount to a slap in the face for their sacrifices.”