House bill would raise VA mortgage fees to fund veterans' benefits

"Under the proposal, DIC payments to surviving family members would rise by a total of 5% over the next five years. SMC benefits would increase by $10,000 annually for the most severely disabled veterans who require regular in-home care under the supervision of a medical professional. To offset the cost, an amendment in the nature of a substitute would increase VA mortgage guaranty fees for a 10-year period."

"According to the Community Home Lenders of America (CHLA), the guaranty fee for first-time VA borrowers would rise 30 basis points to 2.45%, while the fee for subsequent-use VA loans would jump 100 basis points to 4.3%. In a period of significant homeownership affordability challenges, particularly for veterans, CHLA cannot support mortgage fee hikes not based on actuarial considerations, the CHLA wrote Monday in a letter addressed to Bost and ranking member Mark Takano of the House Committee on Veterans' Affairs."

"The CHLA said that current VA guaranty fees already exceed the level needed to keep the program financially sound, effectively forcing active-duty service members and veterans to pay twice for a benefit they have earned. The group also warned that lawmakers could go beyond reinstating prior fees. We are concerned that this Committee might in fact not only renew the fees, but go a step further and add fees above the former BWN (Blue Water Navy) fees, the CHLA wrote."

Under the proposal, DIC payments to surviving family members would rise by 5% over five years. SMC benefits would increase by $10,000 annually for severely disabled veterans requiring regular in-home medical care. To offset costs, the proposal would raise VA mortgage guaranty fees for a 10-year period, with first-time borrowers' fees rising 30 basis points to 2.45% and subsequent-use fees rising 100 basis points to 4.3%. The Community Home Lenders of America opposes the fee increases, calling them unrelated to actuarial needs and a double charge on service members and veterans. Supporters estimate benefits for more than 500,000 military families and assistance to over 7,000 severely disabled veterans.

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