G.I. Home Interest Rates lowered The maximum interest rate on G.I. home loans was reduced from 9 to 8.75 percent effective January 5, according to Elmer J. Smith, Director of the VA Regional Office in Salt Lake City. An increased supply of mortgage money was attributed to this first reduction in G.I. loan interest rates since last March, Smith said. The decrease was agreed upon jointly with the Department of Housing and Urban Development. The Peak interest rate of 9.5 percent during the 31-year history of the VA Home Loan Guaranty Program was reached in August 1974. This is the 27th change in G.I. home loan interest rates since the program was begun in June 1944. For a veteran buying a home with a $30,000 G.I. loan, the quarter percent decrease in the VA interest rate could mean a savings of about $2,000 over the life of a 30-year loan, Smith noted. Veterans Administration guarantees loans private lenders make to eligible servicemen, veterans, and widows. This year the Veterans Administration expects to guarantee more than one-third of a million GI home loans valued in excess of 1) billion dollars.