Press Releases

WASHINGTON, D.C. – Congressman Abraham Hamadeh (AZ-08) is urging Secretary of Veterans Affairs Doug Collins to implement common best practices in the VA Home Loan program and eliminate outdated policies that do not align with current housing market realities.

In a letter to Secretary Collins, Congressman Hamadeh reiterated his belief that the Trump administration has made significant progress in refocusing the Department of Veterans Affairs (VA) on its core mission: taking care of veterans by cutting the benefits claims backlog, expanding access to care, and eliminating waste across the Department. That is why Congressman Hamadeh is confident that his common-sense suggestions for increasing homeownership for young veterans will be seriously considered.

Congressman Hamadeh’s suggestions, as outlined in his letter, include:

Origination Fee Compliance and Fee Stacking

VA regulations cap lender origination and administrative fees at 1 percent of the loan amount. That 1 percent is intended to be all-inclusive, covering the lender’s labor and overhead. Yet veterans are reporting that lenders are charging the full 1 percent origination fee and then piling on additional itemized charges for processing, underwriting, and other services. This is a cash grab, and it needs to stop.

Underwriting Modernization

VA still relies on manual underwriting for home loans. FHA has moved to semi-automated systems that can approve a loan in 2 to 7 business days, compared to approximately 10 for VA. The Mortgage Bankers Association testified that automated underwriting would speed the loan process, particularly for straightforward applications, and would reduce the stigma that VA loans take longer to close.

Seller Concessions Cap

VA currently caps seller concessions at 4 percent of the reasonable value of the home. FHA and USDA both allow 6 percent. In a competitive housing market like the Phoenix metropolitan area, that 2 percent differential can determine whether a veteran’s offer is accepted or passed over.

Appraiser Certification Requirements and Shortage

The VA has identified 436 counties across 31 states that do not have enough certified appraisers to meet current demand. A significant driver of this shortage is the VA’s experience requirement. FHA and USDA loans require only 12 to 18 months. VA requires 3 to 5 years of experience for appraiser certification, forcing veterans into longer wait times and substantially higher fees.

"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. 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."