Homes for Heroes Act
The Homes for Heroes Act would expand VA home loan benefits and adjust refinancing costs for veterans. First, it increases the maximum VA loan guaranty entitlement for certain veterans from 25% to 37.5% of the Freddie Mac conforming loan limit. In practical terms, this broadens the portion of a loan that the VA can guarantee, potentially allowing veterans to borrow larger amounts or qualify for higher-cost homes in areas where housing prices are rising. The change uses the Freddie Mac conforming loan limit as the baseline, which varies by location. Second, the bill revises the fee schedule for Interest Rate Reduction Refinancing Loans (IRRRLs) guaranteed or insured by the VA. It replaces the existing IRRRL fee with a new multi-period schedule specifying different funding fees depending on when the loan closes (ranging from 0.25% to 0.75% of the loan amount across several time windows from 2025 through 2035). This alters the upfront cost of refinancing a VA loan for borrowers using IRRRLs.
Key Points
- 1Increases the maximum VA loan guaranty entitlement from 25% to 37.5% of the Freddie Mac conforming loan limit.
- 2Applies to the entitlement defined in 38 U.S.C. 3703(a)(1)(C)(ii), expanding the loan amount that can be guaranteed under the VA Home Loan program for certain veterans.
- 3Replaces the current IRRRL funding/loan fee row with a new schedule that sets specific fees for loans closed in different periods (2025-2025, 2025-2027, 2027-2031, 2031-2035, and after 2035).
- 4IRRRL fees under the new schedule range from 0.25% to 0.75% of the loan amount, with the exact percentage depending on the closing window.
- 5Title of the bill: “Homes for Heroes Act.”