22Apr
Common Defense opposes efforts to make home buying harder for Veterans
Washington, DC – At a time when veterans and military families are struggling with rising housing costs, House Veterans’ Affairs Chairman Mike Bost [IL-12] is pushing a proposal that would significantly raise fees on VA home loans, increasing costs for veterans by thousands of dollars and pushing fees to the highest levels in the program’s history. Common Defense urges Republicans and Democrats alike to reject any proposal from leadership that raises costs on veterans seeking stable housing and calls on lawmakers to protect, rather than erode, the VA Home Loan program.
“This proposal asks the very veterans who are struggling most with housing affordability to shoulder the cost of Congress’s decisions,” said Jose Vasquez, Executive Director of Common Defense. “At a time when veterans are being priced out of homeownership, House Republicans are making the VA Home Loan benefit more expensive, more risky, and less accessible. Veterans earned this benefit through service; they should not be used as a piggy bank to balance congressional ledgers, especially when the true cost is fewer veterans becoming homeowners and more families pushed toward housing insecurity.”
The plan would raise VA loan fees from 2.15% to 2.45% for first-time users, from 3.3% to 4.3% for repeat users, and triple refinance fees from 0.5% to 1.5%. The impact could be especially severe for younger veterans and first-time homebuyers, who already face higher interest rates and record-high home prices. Refinancing would become significantly more expensive, delaying break-even points by years and increasing foreclosure risk. These increases would last ten years, far longer than the last time Congress raised VA home loan fees.
Meaning, for a typical $400,000 home, that translates to:
- About $1,000 more for a first-time VA borrower.
- About $4,000 more for a repeat user.
Because many VA loans require no down payment, these fees are added directly to the loan balance. That leaves veterans underwater on their mortgage the moment they close, owing more than their home is worth and paying interest on the added fees for years.
In 2019, lawmakers temporarily increased fees for just two years to help fund benefits for Blue Water Navy veterans. That increase was modest, limited in duration, and did not raise refinancing fees. By contrast, the current proposal more than doubles some fee increases, triples refinancing costs, and locks them in for a decade.
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Common Defense Civic Engagement is the nation’s largest grassroots organization of veterans and military families. Founded in 2016, we organize to defend the Constitution, oppose Forever Wars, and fight for a democracy where liberty and justice truly exist for all.