H.R. 9404: VA Home Loan Navigator Act

This bill would direct the Department of Veterans Affairs (VA) to create a new program to help veterans and other eligible borrowers better understand and use VA home loan benefits.

What the program would provide

The VA would offer free, voluntary support services to borrowers using VA-backed housing loans. These services could include:

• Explaining how VA home loan benefits work
• Helping with certificates of eligibility
• Advising on home loan origination, refinancing, and closing
• Explaining appraisal rules, property standards, and loan paperwork
• Helping borrowers deal with loan servicing problems
• Advising on ways to avoid foreclosure or reduce losses
• Helping coordinate between borrowers, mortgage servicers, and the VA
• Explaining costs, fees, and other financial obligations tied to homebuying, including broker commissions

How the VA could run it

The VA could provide these services directly or through outside organizations it approves. Those organizations would need to meet certain requirements, such as:

• Being approved by the Department of Housing and Urban Development as a housing counseling agency
• Being a nonprofit focused on veterans, service members, or military families
• Showing knowledge of VA home loan benefits and housing counseling
• Having the ability to serve people across multiple states or nationwide
• Being able to train, certify, and oversee individual counselors

The bill says the VA should give preference to organizations that already have experience helping military-connected communities with housing counseling and financial literacy.

Rules to keep the advice neutral

Any organization providing these services would have to act as an independent and neutral intermediary. It could not act on behalf of a mortgage lender, loan servicer, or real estate professional.

The bill also says these service providers must be financially and operationally separate from mortgage origination, servicing, and real estate brokerage activities. They cannot refer borrowers to affiliated companies in exchange for anything of value. If they do have related businesses, they would need firewalls or other protections approved by the VA.

Certification and oversight

The VA, working with HUD, would certify individual counselors who provide these services. The VA would set the rules for initial certification, continuing education, and recertification, which would have to happen at least every three years. The VA could also contract with nonprofits to help manage certification.

The VA would have authority to suspend or revoke an organization’s designation or a counselor’s certification, and it could refer fraud or abuse cases to the Attorney General.

Reports to Congress

The VA would have to report to Congress two years after the law takes effect, and then once a year for four more years. The reports would measure things like:

• Borrower satisfaction
• How often people use VA housing loan benefits
• Foreclosure prevention results
• Loss mitigation completion rates
• Whether borrowers re-default after receiving help
• Cost-effectiveness of the program

Relevant Companies

None found