Veteran Administration Loans and Co-operatives

Veteran Administration Cooperative Loans

From what we've been told:

While the law did change to allow the Veterans Administration to ensure cooperative loans, the Government National Mortgage Association (Ginnie Mae) will not issue pass through certificates for cooperative loans even if insured by the Veterans Administration. Therefore, the lender is unable to resell the loan in the secondary market and must service the loan for the life of the loan.

Given the tightening of the credit markets, lenders are avoiding loans that are not salable.

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