House lawmakers passed a plan to create a new Veterans Affairs Department branch to focus on economic opportunity, and they’ll fund it by raising refinancing rates on VA-backed loans.
The bill, which is under Senate consideration, would create a fourth VA under secretary and staff up a branch dedicated to transition assistance, employment, education benefits and other non-health-related VA benefits. To pay for the extra staff, it would raise the funding fee on the VA’s Interest Rate Reduction Refinance Loans. That fee sits at half a percent, but the bill would up it to 0.75 percent for loans closed Jan. 1, 2019, through March 1, 2025.
The fee would revert to 0.50 percent after that date. Get the current funding fees for all VA loans, as well as a breakdown of which veterans are exempt from fees, here.
This funding tactic isn’t new: For instance, the Senate is expected to consider legislation that would expand benefits for “blue water" Vietnam veterans — tens of thousands of service members exposed to toxic chemicals while serving on ships who have been denied recompense for decades.
Put down those 'Refinance Now!' mailers and find out whether you're eligible.
To afford those benefits, the bill calls for a restructuring of VA loan funding fees that would raise some rates and would make more veterans, including those with disability ratings below 100 percent, pay a funding fee to use the loan guaranty program.
Learn more about the VA loan program at our VA Loan Center.