HONOLULU (HawaiiNewsNow) - Last year more than 5,000 families in Hawaii, veterans and active-duty military relied on loan guarantees from the VA for their homes.
"I served for eight years in the Army in aviation. I was a door gunner on Blackhawk helicopters," veteran Corey Cazares said.
He fought in Iraq and Afghanistan. He and his wife, Amanda, are expecting their first child so they want to sell their Mililani home and buy a bigger one.
"When you start a family you want something a little bit nicer," Amanda Cazares said.
But the couple and other military veterans will have a hard time since the VA slashed Honolulu's VA Loan Guaranty Limit. The guaranty protects lenders from loss if the borrower fails to pay. It was $750,000 for Honolulu. The VA cut it to $625,000. That's $60,000 lower than the median sales price for a single-family home.
"With a loan product that doesn't facilitate the average median home price, you're limiting veterans in being able to move into their own homes and further their families lives," Corey Cazares said.
"It doesn't seem right. There's something amiss," Amanda Cazares said.
The guaranty limit is a benefit earned by soldiers who serve and sacrifice. It also helps surviving spouses buy a home. The decrease has many veterans on the doorstep of despair.
"For veterans who are trying to purchase a home or doing their best to refinance a home this is very devastating news for them," state Office of Veteran Services director Ronald Han said.
Washington gave no reason for the severe cut to Honolulu's loan limit. Hawaii's congressional delegation wants Veterans Affairs secretary Eric Shinseki to recalculate and restore the higher guaranty.
"I don't know too many veterans running around with $116,000. That's what our down payment is going to be with the new VA loan," Corey Cazares said.
The cut is even more questionable since guaranty limits went up in other parts of the country where home prices are equal to Honolulu's.
Cazares is a realtor. He helps soldiers and veterans buy homes. Now he has to tell them home ownership may be out reach.