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HR2723119th CongressWALLET

VA Home Loan GRACE Act of 2025

Sponsored By: Representative Kennedy, Timothy M. [D-NY-26]

Introduced

Summary

Rewrites how VA home loan guarantees are calculated and capped. This bill would replace the current entitlement framework with a tiered table that sets guaranty percentages and maximum entitlement by loan-size band and by whether a veteran is a covered veteran.

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  • Veterans and families: Would tie guaranty percent and maximum entitlement to four loan-size bands, using fixed caps like $36,000 or $22,500 or formulas tied to the Freddie Mac conforming loan limit.
  • Co-borrowing veterans: Would allow automatic guaranty when two or more veterans use entitlement on a single loan, capped at 25% of the conforming loan limit (or 25% of the loan if no covered veteran) or the sum of their entitlements. Loans to two married veteran spouses with no other obligors are excluded.
  • Enforcement and fees: Would create a civil penalty up to $23,607 for knowingly false entitlement certifications and would extend the loan-fee schedule date to April 7, 2031.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 1 benefits, 1 costs, 1 mixed.

New fines for false VA loan certifications

If passed, a veteran who knowingly and materially makes a false VA home loan certification could owe up to $23,607 per violation. The VA Secretary would set the amount and may add other remedies. This would start 180 days after enactment.

Changes to VA home loan guaranty

If enacted, VA would change how it guarantees VA home loans. A new table would set the guaranty percent and the maximum entitlement for each loan size. The guaranty would be the smaller of the table limit or the sum of each veteran’s entitlement. Rules would differ for covered vs. not‑covered veterans and for loans closed before or after April 7, 2031. Large loans over $144,000 could face extra caps on multi‑veteran loans, with an exception for two married veterans who are the only borrowers. Some entries use fixed amounts like $36,000 or a share of the Freddie Mac limit, reduced if entitlement was not restored. Changes would start 180 days after enactment.

VA loan fees delayed to 2031

If passed, VA would use April 7, 2031 instead of April 7, 2023 in its loan‑fee table. This would delay the next fee schedule change. Borrowers using VA loans could keep current fee levels longer. The change would start 180 days after enactment.

Sponsors & CoSponsors

Sponsor

Kennedy, Timothy M. [D-NY-26]

NY • D

Cosponsors

  • Rep. Brownley, Julia [D-CA-26]

    CA • D

    Sponsored 4/8/2025

Roll Call Votes

No roll call votes available for this bill.

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