The VA May Owe Disabled Veterans Millions In Home Loan Fee Refunds
Over 50,000 veterans with disabilities could be owed up to $190 million in refunds from the Department of Veterans Affairs, an investigation has found. The refunds are for VA home loan fees that veterans no longer owe or were wrongly charged for.

According to an investigation by the VA inspector general, senior leaders at the VA knew that veterans weren’t being refunded their fees. However, leaders did nothing to ensure that veterans were paid their dues.

What are VA home loan fees and how are refunds due?

Veterans pay home loan fees when they buy a house with the help of the VA Home Loan Guaranty Program. But when a veteran is disabled and uses the Home Loan Guaranty Program, they’re meant to be exempt from these fees.

VA home loan fees can total up to 3.3% of a house’s total value. This is a significant amount of money.

According to the 2017 Home Buyer and Seller Generational Trends Report, which was conducted by the National Association of Realtors, up to 13% of all home buyers said that saving for just a down payment is one of the most difficult steps in the home buying process. The average downpayment on a house is 7%.

The VA is meant to issue refunds when disabled veterans are improperly charged or when the VA has later determined they were disabled. However, the VA didn’t refund thousands of cases dating more than 10 years. The department claims they didn’t issue refunds because the veterans didn’t ask for them.

“It is the review team’s opinion that requiring a veteran to submit a claim for a refund improperly places the burden and responsibility solely upon the veteran,” said investigators.

VA expected to see an internal quality improvement

At the time when the inspector general was preparing a release of the investigation results, the VA issued a press release announcing that they would notify veterans when they are exempt from fees when they buy homes under the program whether they are currently or later determined to be disabled.

Investigators from the inspector general’s office said that VA loan managers knew about the outstanding debts to veterans since 2014. However, the managers said they had been focused on other priorities. These priorities included processing high volumes of applications for home loans.

Investigators called the report on the investigation troubling. “Through an internal quality improvement effort, VA has put a plan in place to better inform veterans through key communications when the law allows VA to waive the fee for a veteran,” said Robert Wilkie, the VA secretary.

Veterans who believe they are owed a home loan refund ought to consult the VA website for more information about VA home loan funding fees. The inspector general estimated that, of the wrongly charged fees, disabled veterans accounted for $286 million.