Deemed an effort to strengthen housing opportunities for veterans, a new bipartisan bill in Congress would ensure disabled veterans don’t have to pay certain home loan funding fees.
The U.S. Department of Veterans Affairs already offers waivers for veterans wth service-connected disabilities — but only to those who have already received a disability rating, assigned by the VA to determine eligibility for monthly disability compensation and other benefits.
That means, according to Rep. Mike Levin‘s office, veterans who are awaiting their disability rating or service members who are still in the transition process from active duty to civilian life are not eligible to have the home loan fees waived.
That creates a barrier to home ownership for many veterans, said Levin, a San Juan Capistrano Democrat who has authored the bill alongside Rep. James Moylan, a Republican who serves as the at-large representative for Guam.
Moylan said it’s a “gap in the system” that Congress should be able to fix.
Dubbed the VALOR Act, the bill would require the VA to reimburse a veteran or transitioning service member for the home loan funding fee so long as they submit a disability claim or a notice of intent to file, pay the home loan fee and then later receive a disability rating and compensation for that claim.
The bill classifies that paid fee as an “overpayment,” according to a news release from Levin’s office, meaning the VA would need to reimburse.
The bill “modernizes the VA home loan fee structure and would reimburse veterans and transitioning service members who pay fees and later receive a disability rating and compensation,” Levin said.
“By correcting this loophole, the bill helps ensure disabled veterans and service members leaving the military can begin their civilian lives on stronger financial footing and buy quality, affordable homes,” he added.
This is not the first time this bill has been introduced in Congress. There was a similar effort in 2023, but it died in committee, never making it to a full floor vote.
The latest iteration of the bill was recently introduced, and it’s been referred to the House Committee on Veterans’ Affairs. It is backed by the American Legion, the National Association of Realtors and Veterans of Foreign Wars, among other groups, according to Levin’s office.
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