House Republicans have retreated from a plan to increase fees on VA loans, but veterans seeking to refinance their mortgages will still face significantly higher costs. The revised proposal, a response to widespread opposition from veterans groups, demonstrates the political sensitivity surrounding benefits for those who served, even as lawmakers seek to fund expanded programs for disabled veterans and surviving families.
The initial proposal, detailed in legislation known as H.R. 6047 – the Sharri Briley and Eric Edmundson Veterans Benefits Expansion Act of 2025 – aimed to raise fees across the board on VA-backed home loans. However, facing a backlash, Republicans have now opted to maintain current fees for home purchase loans. The shift, reported by The New York Times and HousingWire, focuses the fee increases on VA Interest Rate Reduction Refinance Loans (IRRRLs) and VA loan assumptions.
The most substantial change involves the refinancing fee, which is now slated to increase approximately threefold, jumping from 0.5% to 1.4%. This increase is intended to help offset the costs of expanding benefits for severely disabled veterans and the families of those killed in action. While the intent is to bolster support for the most vulnerable veterans, critics argue that it unfairly burdens those seeking to improve their financial situations through refinancing.
“This makes owning a home more difficult for many veterans,” remarked Edgar Edmundson, whose son suffered catastrophic injuries during his service. He emphasized the emotional toll of financial barriers on families, stating, “The struggle isn’t just financial—it’s about living with dignity.” This sentiment underscores the core argument of veterans’ organizations, which contend that funding new benefits should not come at the expense of fellow service members.
The IRRRL, often referred to as a VA streamline refinance, allows veterans to lower their interest rates on existing VA loans without requiring an appraisal or credit check. Lawmakers defending the increased fee argue that the IRRRL is an optional program, and veterans who wish to take advantage of lower rates can absorb the additional cost. However, this justification fails to address the financial strain placed on veterans who may be struggling with affordability and rely on refinancing as a crucial tool for managing their housing expenses.
The original plan to raise fees on home purchase loans drew immediate criticism, particularly given the already challenging housing market. Elevated home prices across the country have made homeownership increasingly difficult, and adding additional costs to VA loans would have further exacerbated the problem. The revised proposal avoids this outcome, but the significant increase in refinancing fees remains a point of contention.
The debate over VA loan fees highlights a broader challenge in balancing the needs of different segments of the veteran population. Lawmakers are under pressure to expand benefits for those with service-connected disabilities, but finding sustainable funding sources without imposing costs on other veterans is proving difficult. The current approach, relying on increased fees for refinancing and loan assumptions, represents a compromise, but one that is unlikely to satisfy all stakeholders.
Details regarding the final refinancing fee are still being finalized, according to Kathleen McCarthy, a spokeswoman for the House Committee on Veterans’ Affairs. The amendment outlining the changes will be publicly available on the committee repository. The legislation is subject to House PAYGO rules, which require offsets to balance the cost of new spending.
The Sharri Briley and Eric Edmundson Veterans Benefits Expansion Act of 2025, initially introduced in November by Representative Tom Barrett (R-Mich.) and co-sponsored by House Veterans’ Affairs Committee Chairman Mike Bost (R-Ill.), aims to expand dependency and indemnity compensation for surviving family members and boost special monthly compensation for catastrophically disabled veterans. The initial funding mechanism, raising VA home purchase loan fees, proved politically untenable, leading to the current revised proposal.
While the scaling back of the proposed increase in purchase loan fees represents a victory for veterans’ groups, the higher fees on refinances will undoubtedly impact many service members and their families. The situation underscores the ongoing need for a comprehensive and sustainable funding strategy for veterans’ benefits that does not rely on offsetting costs by increasing financial burdens on those who have already served.
