The U.S. House of Representatives passed legislation that will improve access to VA home loans.
The move was praised by the Mortgage Bankers Association (MBA) as an "important first step" to modernizing the VA appraisals process.
U.S. Rep. Mike Bost of Illinois and U.S. Sen. Dan Sullivan introduced the bill to streamline the home buying process for veterans and their families.
“VA home loans have given millions of veterans and their families the opportunity to purchase a home,” said Bost. “Yet, on average, veterans wait longer and pay more during the closing process due to VA’s out-of-date appraisal requirements. That’s why I am introducing the Improving Access to the VA Home Loan Act of 2022 today. This bill will make sure that veterans are not unfairly disadvantaged during the home buying process and allow for a modern, digital appraisal process, which will get them into their new home faster.”
In today’s hot market, veterans struggle to gain access to the fastest and best appraisal resources to get them into their new home as quickly as possible. The appraisal modernization legislation will let veterans use the same modern purchasers tools that non-veteran buyers already use.
Last March, the FHFA allowed hybrid appraisal — which gained popularity during the pandemic — to become a permanent fixture. Fannie Mae and Freddie Mac also accept appraisals conducted remotely. Remote or “desktop” appraisals use public record listings for comps and tax appraisals for purchase loans.
“MBA is grateful to the House for passing with bipartisan support this commonsense bill to make VA home loan financing more accessible and affordable to our nation’s servicemembers, veterans, and their families by accelerating the updating of the Department of Veterans Affairs’ (VA) rules and program guidelines that govern home appraisals,” Bob Broeksmit, CMB, President and CEO of MBA said.
“The bill will encourage important reforms to the agency’s requirements regarding when an appraisal is necessary, how appraisals are conducted, and who is eligible to conduct an appraisal. This legislation is an important first step towards broad modernization of VA appraisal processes and could make veterans’ home purchase offers more viable in today’s competitive housing market."
The bill is now headed to the U.S. Senate.
“MBA now urges the Senate to pass a companion measure, S. 4208, introduced by Sen. Dan Sullivan, as swiftly as possible to ensure active and retired service members throughout the country have access to more affordable, sustainable homeownership opportunities.”
MBA Vice Chair and CEO of Amerifirst Home Mortgage, Mark A. Jones, testified before the House VA Subcommittee on Economic Opportunity in May 2022 and commended Bost for introducing the bill to Congress.
However, Jones expressed concern about the future increase in VA mortgages financing fees.
“The MBA urges Congress to ensure that these funding rates are set at a level commensurate with the risks associated with VA-guaranteed housing loans, and to monitor and analyze past funding fee increases, rather than demanding further increases,” Jones said.
Jones added that past increases in funding fees may have led to a “mismatch of funding fees with the actual risk profile of veteran borrowers.”
