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Action slows on vets’ benefits upgrades

The House Veterans’ Affairs Committee approved major improvements in veterans’ education and home loan programs Wednesday, but details in the bills could delay or even prevent the initiatives from becoming law.

The home loan bill, HR 4884, would increase the maximum loan available to veterans for new and refinanced homes to $729,750; allow refinancing even if the homeowner has no equity; and order a new streamlined process for buying condominiums with veterans’ home loans.

The bill is called the Helping Our Veterans to Keep Their Homes Act.

Rep. Bob Filner, D-Calif., the committee chairman and chief sponsor of the bill, said the update is a response to criticism that the VA loan program has become irrelevant because of the current $417,000 cap on new loans and the $147,000 limit on refinancing, and a requirement that homeowners have at least 10 percent equity in their home to qualify.

The problem with the bipartisan bill, which passed the committee by voice vote, is that it also eliminates loan origination fees for all loans except for those related to refinancing, which Filner said is necessary to make the VA home loan program competitive.

Fees now range from 1.4 percent to 3 percent for regular loans, depending on the amount of down payment, and are just 0.5 percent when refinancing an existing VA loan to reduce the interest rate. All those fees would be eliminated, leaving just a 1 percent fee for someone refinancing a non-VA loan with a new loan from the VA program.

Fees generate money intended to cover administrative costs of the loan program. Eliminating them would create a $1.4 billion to $1.8 billion hole in the VA budget that will prevent the bill from being taken up by the House unless lawmakers can find a way to make up the difference, said Rep. Steve Buyer, R-Ind., ranking Republican on the committee.

Buyer offered an amendment to keep the current fees, which he said would guarantee the House could take up the bill right away, but his effort was defeated on a voice vote.

Filner said he hoped to find a way to pass the bill without imposing fees for most home loan users.

Also approved by the veterans’ committee was a bipartisan GI Bill improvement package amended, at Buyer’s urging, to include provisions that would boost education benefits for National Guard and reserve members mobilized in support of contingency operations.

The bill, HR 5684, would raise active-duty GI Bill benefits to $1,450 a month, up from the current $1,101 payment; pay a $500 monthly stipend for living expenses; give people up to 15 years after leaving active duty to use their benefits, rather than the current 10; and allow up to $6,000 in GI Bill benefits to be used each year to repay student loans.

Buyer’s amendment would modify a current program for active-duty troops, making GI Bill benefits available top reservists based on cumulative rather than consecutive service, and make benefits more generous.

There was no controversy over the amendment, which was adopted by voice vote, but adding reserve benefits to the measure requires the bill to be referred to the House Armed Services Committee, which has jurisdiction over Guard and reserve education benefits.

The referral slows down, but does not necessarily halt, a vote by the full House on the bill, the Veterans Education Improvement Act, because passing GI Bill improvements has becoming a top priority for House and Senate leaders.