By Ethan Faverino |
Congressman Abraham Hamadeh (R-AZ-08) announced his letter to Secretary of Veterans Affairs Doug Collins to adopt common-sense reforms to the VA Home Loan Guarantee Program.
The goal is to eliminate outdated bureaucratic hurdles, reduce unnecessary costs, and better align the program with today’s competitive housing market so more young veterans can achieve the American Dream of homeownership.
In a formal letter to Secretary Collins, Congressman Hamadeh highlighted the Trump administration’s strong progress in refocusing the Department of Veterans Affairs on its core mission: delivering timely benefits, expanding access to quality care, slashing the claims backlog, and eliminating waste. Building on that momentum, Hamadeh expressed confidence that practical improvements to the home loan program will receive serious consideration.
“As my fellow veteran and Committee member, Congressman Van Orden said in our hearing on the subject, we must find ways to eliminate the unnecessary administrative costs of the VA Home Loan program and better align it with other Federal housing programs,” said Congressman Hamadeh. “My family is in real estate. I am very familiar with housing, and I know the unintended consequences of bureaucratic policies that have little to no protective value and ignore the realities of the marketplace.”
Congressman Hamadeh’s recommendations focus on four key areas where the VA Home Loan program lags behind other federal housing programs, such as FHA and USDA loans:
Ending Origination Fee Stacking: VA rules cap lender origination and administrative fees at 1% of the loan amount, intended to cover all lender labor and overhead. However, veterans report lenders charging the full 1% while adding separate itemized fees for processing, underwriting, and other services. This practice amounts to an unfair cash grab that increases costs for veterans and should be strictly enforced.
Modernizing Underwriting Process: The VA continues to rely heavily on manual underwriting, resulting in average closing times of about 10 business days. In contrast, the FHA has implemented semi-automated systems that can approve straightforward loans in as little as 2 to 7 days. The Mortgage Bankers Association has testified that automated underwriting would accelerate the process and help reduce the perception that VA loans are slower and more cumbersome.
Raising the Seller Concessions Cap: The VA currently limits seller concessions to 4% of the home’s reasonable value. Both FHA and USDA programs allow up to 6%. In competitive markets, this 2-percentage point difference can mean the difference between a veteran’s offer being accepted or denied.
Addressing Appraiser Shortages Through Reasonable Certification Requirements: The VA has identified 436 counties in 31 states facing appraiser shortages that delay loans and drive up costs. A major contributor is the VA’s stringent experience requirement of 3 to 5 years for certification, compared to just 12 to 18 months for FHA and USDA programs. Aligning standards would increase the pool of qualified appraisers, shortening waiting times and lowering fees.
These targeted reforms would remove barriers without compromising program integrity, helping young veterans secure homes more efficiently and affordably. By modernizing the program, VA can better fulfill its promise to those men and women who have sacrificed for our country.
