Proposed Bill Could Mean Higher VA Loan Fees
The Blue Water Navy Vietnam Veterans Act of 2018 recently moved to the Senate after getting approved with a vote of 382-0 in the House of Representatives. The bill would extend medical benefits to over 90,000 Navy veterans who served off of the coast of Vietnam during the Vietnam War. The veterans believe they were exposed to Agent Orange, a dangerous chemical weapon that has led to birth defects, learning disabilities, and ongoing health issues for those who were exposed. To pay for the funding, which is estimated to cost $3.4 billion over the course of five years, the Veterans Administration would increase fees associated with the VA home loan program.
VA loans are one of the most affordable home financing options available for eligible veterans, active-duty military, and surviving spouses. VA loans are available with 100% financing and many have the option to finance closing costs through the mortgage. Since 1944, the VA loan has made homeownership possible for our nation’s military members.
Opponents of the Blue Water Navy Vietnam Veterans Act of 2018 recognize the important of healthcare and medical benefits but insist these costs be funded another way. Many veterans and active-duty military depend on the low-cost VA loan because they lack the robust credit profile most consumers have due to spending their early adult life in the service.
In response the the bill, the National Association of Realtors (NAR) wrote, “as a benefit, NAR believes that VA loan guarantee fees should be based on the risk of the loan made, and not the costs of other VA programs or benefits.”
The Mortgage Bankers Association (MBA) also addressed the bill in its statement, “we firmly believe that mortgage borrowing costs should not be increased to pay for non-housing-related expenditures. The loan fees charged to veterans should reflect the credit risk associated with the VA guaranty, and any fee increases that are unrelated to this risk unnecessarily raise the cost of mortgage credit for veterans.”
The VA loan benefit never expires, and qualifying veterans and active-duty military can use the loan more than once, as long as they pay off an existing loan. If you’d like to find out if you qualify for a VA loan, consult a mortgage lender.
Sources: MarketWatch, VA.gov