Episode summary
Congress wants to hike VA loan fees
HousingWire Daily
· · 23 min · Hosts: Sarah Wheeler · Guests: Gay Veale
Summary
Gay Veale said Congress is advancing HR 9237 and S4744, a large veterans bill that includes good benefits for disabled veterans and surviving spouses but would pay for part of it by raising certain VA loan fees. The most controversial change would lift the VA funding fee on VA IRRRL streamline refinances from 0.5% to 1.42% for borrowers who are not exempt, while the fee on VA assumptions would rise from 0.5% to 1%. Veale argued that this effectively asks one group of veterans to fund benefits for another.
She said the proposal would hit active-duty service members hardest because many do not yet qualify for the funding-fee exemption and are also more likely to move every few years. On average, she expects about an $8,000 lifetime impact on a loan, with a longer recoupment period that could make refinances less attractive or even leave some borrowers underwater. Her view is that the change would discourage veterans from taking advantage of lower rates when they move frequently.
Veale also described a broader industry pushback effort led by the Broker Action Coalition and veteran groups. She said more than 800 letters have already gone to lawmakers, but more outreach is needed before votes in the House and Senate. She also argued that housing professionals are uniquely positioned to explain the real-world effects of VA fee changes to congressional staffers who may not understand loan mechanics.
Key takeaways
- Gay Veale said HR 9237 and S4744 would nearly triple the VA IRRRL funding fee for non-exempt borrowers, from 0.5% to 1.42%.
- Veale said the proposal is especially hard on active-duty service members because they are less likely to be exempt and move more often.
- She estimated the fee change could add about $8,000 over the life of a loan on average.
- Veale said the recoupment period on a refinance could stretch from about 1.5 years to 5 years, making the transaction harder to justify.
- The Broker Action Coalition has already sent more than 800 letters, but Veale said more pressure is needed before Congress votes.
Notable quotes
“what the bill would do is increase the VA funding fee on a VA Earl or interest rate reduction refinance loan”
“from half a percent to 1.42% so nearly tripling the bill”
“we're just pitting veterans against veterans is like you know, you said it in the beginning”
“It will have about an $8,000 impact over the life of a loan”
“the recoupment goes from about 1 and 1/2 years to 5 years on a refinance”
How the episode opens
Welcome everyone. My guest today is Gay Veale, chief experience officer at Vetted VA and a veteran herself, to talk about a VA loan fee hike that's being proposed in Congress right now
And what it would mean for veterans and lenders. Before we dive in, here's the recap of the top five trending stories on housingwire.com. First is why Fed president Beth Ann wants more rate hikes, followed by GSEs release historical FICO 10 T data and expand Vantage Score 4.0 files.
We also have a home building story, why Carlisle Companies is targeting Owens Corning for an M&A combo. And a contributor article on the road to housing acts biggest breakthrough isn't the investor band, it's supply. Finally, we have mortgage rates drop, but is it the start of a trend?
Always a lot of news, but I want to get to today's important topic. Gay, welcome to the podcast.
Thank you so much for having me. I'm so incredibly honored to have the opportunity to talk to you about this really important topic.
It is a really important topic and it's one that I felt like um, you know, maybe our industry wasn't paying so much attention to. There's so much going on right now. Um, but I know that people in our community really care about veterans and and these programs.
So, um, let's talk about what what we want to talk about is the VA loan fee hike proposal, right? We've got some things going through Congress and I think that it's important to think that like maybe you can walk us through first what they're trying to do and then we can talk about why maybe um, you know, the industry might think that maybe that's not the best thing to do.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- va loan fee hikes
- veterans
- lender impact
- fico 10t
- mortgage rate trend
Companies and tickers mentioned
- CSL
- OC
- FICO
- Vetted VA
- Carlisle Companies
- Owens Corning
- Fair Isaac Corporation (FICO)
Watch the episode
Watch “Congress wants to hike VA loan fees” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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