This restriction has to do with the way the ODVA’s loan program is funded, which is from the proceeds of Qualified
Veteran Mortgage Bonds, or QVMB. Because these funds are considered “tax
preferred” to investors, Congress passed legislation implemented by the IRS which has placed some limitations on their use. One
of the limitations under our tax laws is that proceeds from QVMB bond sales can
be used only for home loan acquisition — not for refinancing existing mortgage
loans.