The VA Home Loan Reform Act (H.R. 1815) is officially on its way to becoming law, following unanimous passage in both the House and Senate. For mortgage lenders, this legislation delivers long-sought clarity and alignment with other federal programs, while also removing barriers that previously limited veteran participation in the market.
The bill makes permanent the Department of Veterans Affairs’ temporary suspension of its ban on veterans compensating buyer agents — a restriction that often left VA buyers unable to compete in transactions involving buyer-paid commissions. Now, lenders and agents can work with VA buyers without the friction that policy created.
“The VA Home Loan Guaranty is a unique government program that allows veterans to purchase a home without a down payment,” said Shannon McGahn, NAR executive vice president and chief advocacy officer. “We are grateful to the House of Representatives and the Senate for passing this measure and providing veterans and active-duty service members the same advantages as other buyers in a competitive real estate market.”
The legislation also creates a VA Partial Claim program — a critical addition to the VA’s loss mitigation toolkit. Modeled after similar programs from FHA and USDA, the new option will help more than 20,000 seriously delinquent borrowers avoid foreclosure and stay in their homes. That added layer of protection gives lenders more flexibility and clear direction when working with distressed VA borrowers.
In a joint statement, Senate and House Veterans’ Affairs Committee leaders Jerry Moran (R-Kan.), Richard Blumenthal (D-Conn.), Mike Bost (R-Ill.), and Mark Takano (D-Calif.) said: “This bipartisan and bicameral legislation will assist veterans who are facing financial hardships and provide VA with a tool to better help veterans stay in their homes and avoid foreclosure…Today, we are empowering VA to establish a partial claim program as an option of last-resort, which will preserve veteran homeownership and save taxpayer dollars by avoiding preventable foreclosures.”
The bill also expands funding for transitional housing under the Grant and Per Diem program and supports implementation of homelessness provisions passed in prior legislation. For lenders serving VA borrowers, this legislation brings not only better alignment with federal servicing expectations, but also a clearer path forward in ensuring veteran clients don’t fall through the cracks.
