The Veterans Administration cut mortgage rates.

The VA said it is lowering its key mortgage rate to a maximum of 8.5%, the lowest level in nine years. Starting today, officials of the federal agency said, the rate will drop from the present 9% on guaranteed fixed-rate mortgages, and other rates will also fall by half a point. Those on graduated-payment mortgages will drop to 8.75%, and the home improvement loan rate will fall to 10%. The rate for manufactured-home loans will dip to 11%, and for manufactured units on a lot to 10.5%.