Months after Congress passed a bill temporarily raising the fees that veterans pay for home loans, lawmakers are quietly seeking to tap the same pot of money again, a move that's pitting veterans’ groups against one another.
The House voice-voted a bill, H.R. 3504 (116), this summer that would hike veterans’ mortgage fees by more than half a billion dollars over the next 10 years — with $86 million of that going toward helping offset the U.S. deficit. The money is mostly to be used for the benefit of disabled vets by expanding both housing grants for them and a scholarship program for the children of military members killed in the line of duty.
So the legislation is putting veterans' advocates in a tough spot: Everyone supports the underlying programs for disabled vets, but while some groups are willing to eat the higher fees to get the legislation passed, others are drawing a line.
“Taking from those veterans [buying a home] in order to redistribute their money to another veterans cause is just robbing Peter to pay Paul,” said Lindsay Rodman, an executive vice president of Iraq and Afghanistan Veterans of America.
“The way that they’re paying for it is essentially a cop-out of government responsibility to pay for the wounds of war,” Rodman said.
The fee hikes were supposed to be temporary under a separate law enacted this summer. The Blue Water Navy Vietnam Veterans Act, H.R. 299 (116), raised home loan fees to offset the cost of additional disability benefits for Vietnam vets exposed to Agent Orange.
The Department of Veterans Affairs charges a fee to guarantee home loans for veterans and military personnel. The Blue Water Navy Act temporarily raised that fee for first-time homebuyers from 2.15 percent of the loan amount to 2.3 percent and the fee for repeat users of the VA program from 3.3 percent to 3.6 percent. Disabled vets are exempt from the payment.
The American Legion ultimately supported that bill, despite qualms over the funding mechanism, according to Louis Celli, the organization’s executive director of government and veterans affairs.
“While we found it repugnant, we swallowed it for the greater good,” Celli said. “We won’t support any more assaults or attacks on VA home loan funding fees.”
Less than a month after President Donald Trump signed the Blue Water Navy Act, though, the House approved the new bill extending the temporary fee hikes, which were supposed to expire in January 2022, to Sept. 30, 2027.
The Senate Veterans' Affairs Committee is still looking into the legislation, according to a committee spokesperson, and hasn’t scheduled a hearing on the bill yet.
Critics fear the home loan fees are becoming the lawmakers’ latest piggy bank for veteran-related issues.
“The real fear I have is no one can tell me where this ends,” said the Community Mortgage Lenders of America’s Rob Zimmer, a lobbyist for the mortgage lender Veterans United.
Congress, Zimmer added, is “on the way to making this the most expensive housing program even though it has the lowest default rates.”
Under the higher fee schedule, a first-time homebuyer would pay a $5,750 fee for a $250,000 mortgage. Repeat users of the program — including active-duty personnel who moved to a new post — would pay a $9,000 fee for the same mortgage.
The Mortgage Bankers Association and the National Association of Realtors also oppose the fee hikes.
Proponents of the bill blame congressional budgeting rules for the fee adjustment and say the increase is small when considered over the course of a 30-year mortgage.
“I would love a world where I didn’t have to find pay-fors,” said Derek Fronabarger, legislative director of the Wounded Warrior Project, which helped craft the bill.
“At the same time, we’re not talking about taking money and just increasing benefits so we can go spend it on a PlayStation,” he said. “If you ask most veterans walking down the street, 'Are you willing to give up half a cup of coffee a month so that someone can build a wheelchair ramp in their home?' I think they'd say yes.”
The Veterans of Foreign Wars also supports the bill. Patrick Murray, deputy director of the VFW’s national legislative service, called the fee increases “a necessary evil.”
“They were changed recently, but that doesn’t mean they’re changed all the time -- it’s just something that happened within the past year,” Murray said.
One thing everyone agrees on is that veterans shouldn’t be paying for deficit reduction. Supporters of the legislation are pushing for the Senate to reduce the fee extension to better match it with the spending in the bill.
But some veterans' advocates say the argument about offsets is missing the point: Disabled vets already earned their benefits through their service.
“Veterans should not be responsible for coming out of pocket to pay for other veterans benefits,” Celli said.
Lawmakers’ “pushback is, ‘Well, help us find some money,” he added. “That’s not our job! It’s Congress’ job to find the money.”