REFUSE - CONFUSE - DELAY -DENY - Veteran against veteran: A new battle on Capitol Hill pits Agent Orange funding against low-cost mortgages

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A new battle on Capitol Hill is pitting Vietnam veterans against more recent service members.

The Senate is currently considering the Blue Water Navy Vietnam Veterans Act of 2018, a bill that would extend benefits to 90,000 vets who served in the Navy off the coast of Vietnam and say they were exposed to Agent Orange. The House of Representatives in June approved the bill 382-0.

But one of the ways it would pay for the bill, which the Veterans Administration estimates will cost $3.4 billion over the next five years, is by increasing fees on home loans guaranteed by the Veterans Administration – a benefit far more likely to be accessed by younger vets.

The home loan program is a point of pride among the VA. It is available to anyone who has served, and offers generous terms including no down payment requirements, and the ability to fold closing costs into the overall loan amount.

Veterans often don’t have much of a credit profile, since many spend their entire early adult life in service. Yet delinquency rates for the VA loans are much lower than any other category of mortgage. That’s not just because vets are more disciplined, but because VA underwriting considers how much money homeowners will have after paying the mortgage and other expenses, a more holistic approach than many other lenders take.

The VA declined to comment for this story, as did other housing market participants, even as they privately expressed dismay over the inter-generational feud and Congress’ inability to take care of American service members. At least one senator, North Carolina Republican Thom Tillis, in a Wednesday hearing also said he was uncomfortable with that idea.

But as the National Association of Realtors said in a letter to two senators, “as a benefit, NAR believes that VA loan guarantee fees should be based on the risk of the loan made, and not the costs of other VA programs or benefits.”