Did you hear about H.R. 8647 - VA Home Loan Program Reform Act?

The Hidden Dangers of H.R. 8647: How the VA Home Loan Program Reform Act Could Hurt Veteran Families

For generations, the VA home loan program has been a lifeline for veteran families, providing them with the opportunity to achieve homeownership with benefits like no down payment and competitive interest rates. However, recent legislative efforts—specifically, H.R. 8647, the VA Home Loan Program Reform Act—propose changes that could have unintended consequences, making it even harder for struggling veteran families to keep their homes. While this bill is marketed as a foreclosure prevention measure, the reality is that it could create additional financial burdens and roadblocks for veterans already facing hardship.

The Pitfalls of H.R. 8647

At first glance, H.R. 8647 seems like a step in the right direction. It gives the Department of Veterans Affairs (VA) more authority to prevent foreclosures, including the ability to buy out part of a veteran’s mortgage if they are in default. However, the bill includes problematic provisions that could ultimately place veterans at greater financial risk.

1. Increased Debt Burdens

One of the bill’s most concerning aspects is the introduction of a Partial Claim Program, which allows the VA to cover a portion of a veteran’s delinquent mortgage, securing that amount as a second loan against the home. This means that instead of relieving financial pressure, veterans could be saddled with two separate debts—one from their original mortgage and another from the VA. This added burden could make it harder for veterans to recover financially in the long run.

2. Strict and Limited Assistance

While partial claims are intended to help, they are capped at 20% of the original loan amount. For many veteran families facing foreclosure, this may not be enough to cover their delinquency, meaning they could still lose their home despite receiving assistance. Additionally, there is concern over the strict repayment terms, which could be difficult for struggling families to manage, potentially putting them right back in financial distress.

3. Implementation Delays and Confusion

Unlike other government-backed mortgage programs, the VA does not currently have a well-established infrastructure for managing partial claims. The bill does not outline a clear process for how these claims will be handled, meaning veterans in crisis may experience long delays before receiving aid. In a situation where every day matters, this delay could result in unnecessary foreclosures.

4. A Chilling Effect on VA Loans

By adding new loss mitigation requirements, H.R. 8647 may also discourage lenders from offering VA loans in the first place. If banks and mortgage servicers view the new procedures as too burdensome, they could tighten lending requirements, making it harder for veterans to qualify for VA loans in the future.

This would be a devastating blow to a program designed to help those who have served our country secure stable housing.

H.R. 8647, the VA Home Loan Program Reform Act, was introduced in the House on June 5, 2024, by Representative Derrick Van Orden [R-WI-3]. The bill has three cosponsors, all from the Republican Party:

Rep. Mark Alford [R-MO-4] – Original cosponsor, joined on June 5, 2024.
Rep. Mike Bost [R-IL-12] – Joined on June 11, 2024.
Rep. Juan Ciscomani [R-AZ-6] – Joined on June 13, 2024.

Why KOVH is More Important Than Ever

The potential consequences of H.R. 8647 underscore why organizations like Keep Our Vets Housed (KOVH) are so critical. Veteran families facing foreclosure need real solutions—not just another layer of debt and bureaucracy.

KOVH is dedicated to raising awareness and providing direct support to veteran families struggling with foreclosure. Unlike government programs that can be slow to act, KOVH works to offer immediate relief through initiatives like the ‘We’ve Got Your Backs’ care package project, which provides crucial assistance to those at risk of losing their homes. Additionally, KOVH advocates for policy changes that truly protect veterans, rather than leaving them vulnerable to financial pitfalls hidden in legislation like H.R. 8647.

The Bottom Line

H.R. 8647 may have been created with good intentions, but its real-world impact could be devastating for veteran families. Instead of offering genuine relief, it risks burying veterans in additional debt, delaying critical assistance, and making homeownership more difficult in the future.

As this bill moves through the legislative process, we must push for better solutions that prioritize long-term stability for veteran families. KOVH will continue to fight for policies that truly protect our nation’s heroes, ensuring that those who have sacrificed for our country are not left to battle foreclosure alone.

Now more than ever, veterans need a voice—and that voice is all of us.

Join KOVH in the fight to keep our vets housed.