Veterans struggling with their conventional home loans can now refinance their mortgage for up to 100 percent of the property’s value using a VA loan.

Part of a new federal regulation, the change gives veterans greater incentive to apply for a VA refinance. Before, eligible veterans could only refinance up to 90 percent of their home’s value.

The VA guarantees more than 18 million home loans worth more than $900 billion. Veterans don’t need a VA loan to utilize the administration’s refinance program.

“These changes will allow VA to assist a substantial number of veterans with subprime mortgages refinance into a safer, more affordable, VA guaranteed loan,” former Secretary of Veterans Affairs Dr. James B. Peake said when the regulation passed in 2008. “Veterans in financial distress due to high rate subprime mortgages are potentially the greatest beneficiaries.”

The valuation increase was included in the Veterans’ Benefits Improvement Act of 2008, which President Bush signed into law in October.

Beyond that, VA refinance loans can now extend to $729,750 depending on geographic location. That far outpaces the previous maximum loan amount of $144,000. The new regulation also extended the VA’s ability to guaranty adjustable rate mortgages and hybrid adjustable rate mortgages through September 2012. Another benefit of VA loans, the administration curbs interest rates on ARM and hybrid ARM loans.

The Veterans Administration guarantees loans but does not issue them. That guarantee typically means eligible borrowers obtain favorable loan terms.

VA loans come with a host of benefits, from no down payment or monthly private mortgage insurance to caps on interest rates for active-duty members. Veterans with poor or no credit can qualify for a VA loan.

Any military member who has served 181 days on active duty during peace time or 90 days during war time may be eligible, along with those who have served at least six years in the Reserves or National Guard. Spouses of service members killed in the line of duty may also be eligible.