VA Home Loan Affordability Act

Key Points

• The bill caps closing costs for veterans using VA home loans at 1.5% of the loan amount and limits seller fees to 6% of the outstanding loan balance, reducing the upfront financial burden on veteran homebuyers.
• Veterans refinancing their homes could skip the appraisal step entirely. The bill gives the VA Secretary authority to waive the appraisal requirement, saving veterans time and money when refinancing.
• The bill makes it easier for veterans to buy condos by removing the requirement that condo developments be individually approved by the VA Secretary, opening up more housing options.
• Appraiser qualifications are loosened from requiring a specific number of years of experience to simply needing a state-issued license or certificate, which could speed up the appraisal process by expanding the pool of eligible appraisers.
• The bill removes the requirement for third-party verification of lender fees paid by veteran borrowers, cutting red tape in the loan process. It also lowers the minimum interest rate reduction needed for adjustable rate mortgage refinancing from 200 basis points to 75 basis points.
• The VA must review and update its property suitability standards within 90 days and submit an IT modernization plan for its home loan program within 180 days of enactment.