The Refunding VA Housing Loan Fees for Veterans with Disability Claims: Explained

Overview: Refunding VA Housing Loan Fees for Veterans with Disability Claims

The Refunding VA Housing Loan Fees for Veterans with Disability Claims is a proposed change to the Department of Veterans Affairs home loan benefit. It refunds VA home loan funding fees for certain veterans who have a pending disability claim.

For home buyers using a VA loan, the funding fee is often one of the largest upfront costs. Refunding that fee puts money back in your pocket and lowers the cash you need to bring to closing or the amount you need to finance into the loan.

The bill was introduced on February 17, 2026, in the House of Representatives as H.R. 7598, and it was referred to the House Committee on Veterans' Affairs.

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What Is The Refunding VA Housing Loan Fees for Veterans with Disability Claims?

This bill refunds the VA home loan funding fee for certain veterans who close a VA-guaranteed housing loan while a disability claim is still pending.

How the VA funding fee works today

The VA funding fee is a one-time charge tied to many VA loans. It helps support the VA home loan program. You usually handle the funding fee in one of two ways:

• Pay it at closing as part of your cash to close
• Roll it into the mortgage balance, which raises the loan amount

Either way, the funding fee increases the total cost of buying or refinancing a home.

What the bill changes

When you qualify under this bill, you get the funding fee back. That refund directly reduces your total loan costs.

For example, when a buyer finances the funding fee into the mortgage, a refund lowers the amount that should have been financed. When a buyer pays the fee in cash at closing, a refund returns that cash after closing. The end result is the same: you keep more of your money for your down payment, reserves, moving costs, and home setup.

Who Benefits From The Refunding VA Housing Loan Fees for Veterans with Disability Claims?

The bill is built for a specific group of VA home buyers: veterans who are eligible for a VA-guaranteed housing loan and who have a disability claim pending at the time they get the loan.

1. You use a VA-guaranteed housing loan

The refund applies to housing loans guaranteed by the Secretary of Veterans Affairs under Title 38. In plain language, that means VA loans backed by the Department of Veterans Affairs.

2. You are a veteran with a pending disability claim

The benefit targets veterans who have an active disability claim that has not been decided yet when the VA loan closes. The bill treats that pending status as the trigger for the refund.

3. You paid a funding fee on the VA loan

The bill refunds “the amount of fees” for the VA-guaranteed housing loan. For most buyers, that fee is the VA funding fee charged at closing or financed into the loan.

This bill focuses on making the VA benefit feel fair and timely for veterans who are already in the disability-claims process when they buy a home.

How The Refunding VA Housing Loan Fees for Veterans with Disability Claims Works

The bill’s mechanics are straightforward: when an eligible veteran gets a VA-guaranteed housing loan and pays the VA funding fee while a disability claim is pending, the Department of Veterans Affairs refunds the fee amount.

1. The refund targets a real closing-cost line item

Closing costs include several separate charges: appraisal, title services, prepaid items like taxes and homeowners insurance, and loan-related fees. The VA funding fee stands out because it is often much larger than any single administrative fee.

By refunding the funding fee, the bill reduces a cost that is directly tied to using the VA loan benefit.

2. It improves affordability without changing your interest rate

A refund changes your upfront cost, not your rate. That matters because many home buyers feel the pressure of the cash due at closing even when the monthly payment works.

Here’s a simple way to picture it:

• Before the bill: funding fee increases your cash to close or your loan balance
• After the bill: you receive the fee back, lowering your total out-of-pocket cost for the transaction

3. Example: How A Funding Fee Refund Helps At Closing

Assume a veteran buys a home using a VA loan and pays a $6,000 funding fee.

In both situations, the bill puts $6,000 back with the buyer, which helps preserve savings for moving, furnishings, repairs, and future home expenses.

Who Sponsors The Refunding VA Housing Loan Fees for Veterans with Disability Claims?

H.R. 7598 is in the House Committee on Veterans' Affairs after being introduced on February 17, 2026. Sponsor and cosponsor information is tracked with the legislation as it moves through Congress.

For the latest legislative updates and cosponsors, see the Bill Tracker above.