S. 1932: VA Loan Informed Disclosure Act of 2025

This bill, known as the VA Loan Informed Disclosure Act of 2025 (or VALID Act of 2025), aims to enhance transparency and information for prospective homebuyers, particularly those utilizing the Federal Housing Administration (FHA) and Veterans Affairs (VA) loan programs. Below are the key components of the bill:

Inclusion of VA Loan Information

The bill proposes amendments to the National Housing Act to require that the information provided to prospective FHA borrowers includes details about VA loans. Specifically, it will:

• Include a comparison of loan-to-value ratios between FHA loans and VA loans.
• Specify information regarding loans that are guaranteed or insured by the VA, especially in connection with prevailing interest rates.

This inclusion aims to inform potential borrowers about their options concerning VA loans alongside FHA loans.

Military Service Question on Loan Applications

The bill also mandates the inclusion of a military service question on the Uniform Residential Loan Application, which is the standardized form used in the mortgage process. Key points include:

• A requirement for the Federal Housing Finance Agency (FHFA) to ensure that this question is added to the application form.
• The military service question must be placed above the signature line on the application, ensuring it is clearly visible to potential borrowers.
• The FHFA is tasked with issuing rules necessary to implement this addition within six months of the bill's enactment.

Overall Purpose

The overarching goal of the VALID Act of 2025 is to enhance the informed choices available to potential homebuyers by ensuring they have comprehensive information about various loan options, including the benefits of VA loans. This could help improve decision-making among borrowers and promote access to housing for veterans and service members.

Implementation Timeline

Should the bill pass, it indicates that the changes will need to be implemented within specific timeframes, particularly allowing six months for the FHFA to adapt the loan application process and update relevant regulations.

Relevant Companies

• CFG (Citizens Financial Group) - As a major mortgage lender, it may need to adapt its application processes and marketing strategies to align with the new reporting requirements for VA loans.
• PNC (PNC Financial Services Group) - Could see implications in loan processing and customer outreach efforts related to FHA and VA loans under the updated disclosure requirements.
• WM (Wells Fargo) - Being a large provider of mortgage services, Wells Fargo may need to ensure compliance with the new application requirements and adjust its consumer education materials accordingly.