House Bill Seeks Higher Va Loan Fees To Fund Veterans’ Benefits

Mortgage trade groups are closely monitoring a bill in the U.S. House of Representatives that would raise fees on Department of Veterans Affairs (VA) mortgages to help fund other veterans’ benefits.

The Sharri Briley and Eric Edmundson Veterans Benefits Expansion Act of 2025 (H.R. 6047) — introduced in November by Rep. Tom Barrett (R-Mich.) and House Veterans Affairs Committee Chairman Mike Bost (R-Ill.) — would increase benefits under two programs: Dependency and Indemnity Compensation (DIC) and Special Monthly Compensation (SMC).

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. “Such action would make some active-duty and veterans’ mortgages the single-most expensive federal government homeownership in the land.”

Higher VA mortgage fees that temporarily funded non-housing benefits were previously enacted in 2019 and expired in 2023. At the time, estimates showed borrowers paying a $5,750 fee on a $250,000 loan, with repeat users paying roughly $9,000 for the same mortgage.

Supporters of the current bill estimate the measure would increase benefits for more than 500,000 military families and provide financial assistance to more than 7,000 severely disabled veterans.

A markup of the bill, initially expected Wednesday, was postponed due to scheduling conflicts.