Proposed changes to VA loan programs: what veterans need to know

Written by Samantha SheltonNMLS 1647301Updated November 2026

A major change to the VA home loan program is no longer a proposal. Public Law 119-31, the VA Home Loan Program Reform Act, was signed July 30, 2025, added a new section 3737 to title 38 of the U.S. Code, and created a Partial Claim Program capped at 25% of a loan’s unpaid principal balance, which VA began accepting submissions for on June 15, 2026.

That sentence beats any roundup of “coming changes,” because most of what gets written about VA loan reform describes documents that bind no one. An introduced bill is not a law, a proposed rule is not a rule, and a circular announcing a temporary variance is not a codified regulation.

Learn which instrument controls a VA loan rule, what the reform act actually enacted, and which widely repeated “VA rules” are lender overlays or proposals that never took effect. Our industry updates and rules hub tracks the same distinction across agencies.

Key takeaways:

• The partial claim is law, not a proposal: Public Law 119-31 added 38 U.S.C. § 3737 on July 30, 2025, capping a VA partial claim at 25% of unpaid principal balance, and VA opened submissions on June 15, 2026.
• The funding fee has not moved since April 7, 2023: It runs 2.15% on a first-use zero-down purchase and 3.3% on subsequent use under 38 U.S.C. § 3729(b)(2), which already schedules those percentages to fall to 1.4% and 1.25% for loans closed on or after June 9, 2034.
• Two proposed VA rules died without ever taking effect: VA withdrew its 2022 loss-mitigation and servicer tier-ranking advance notices on January 21 and January 20, 2026, which is why a proposal should never change what you plan around.
• A House-passed bill would change the fee table, but it is not law: H.R. 6047 passed the House on May 21, 2026 and would raise the IRRRL and assumption funding fees and push the scheduled step-down to 2036. It still needs the Senate and a signature.

How does VA actually change a VA loan rule?

Through four instruments in a strict hierarchy, and only the first two bind a lender on their own.¹ Knowing which one a claimed change came from tells you whether it binds you.

• A public law: Congress amends chapter 37 of title 38, U.S. Code. The strongest instrument, and the only one that can create a program outright, as Public Law 119-31 did when it added § 3737.
• A regulation in 38 CFR part 36: Published in the Federal Register, usually after a comment period. Cash-out terms, the escape clause and the fees a veteran may pay live here, and nothing is a regulation until a final rule says so.
• A circular, numbered 26-YY-N: the instrument VA can issue without rulemaking, used for variances and procedures. Each carries a life span on VA’s index, either “valid until rescinded” or a date. Circular 26-25-10, issued December 1, 2025, rescinds January 1, 2027.
• A handbook: VA Pamphlet 26-7 governs originators; the M26-4 Servicer Handbook governs servicers. Both are amended by numbered Change transmittals, so a chapter can sit unchanged for years while circulars pile up.

An advance notice of proposed rulemaking is not on that list: it only asks whether VA should regulate.

What the VA Home Loan Program Reform Act actually did

Four things, and only one is a program veterans use directly. The act ran five sections and took effect on signature.

• Created the Partial Claim Program, 38 U.S.C. § 3737: VA may buy part of the debt on a guaranteed loan for a primary residence in default or at imminent risk of default, taking a subordinate lien behind the first mortgage. The cap is 25% of unpaid principal balance, or 30% for a borrower who missed a payment between March 1, 2020 and May 1, 2025. One claim per loan, with a major-disaster exception, and the money goes first to arrearages.
• Required a mandatory loss-mitigation sequence, 38 U.S.C. § 3732(d): VA must prescribe the order in which a loan holder offers options, and may not purchase an entire loan until the veteran completes that sequence.
• Raised homelessness program funding, 38 U.S.C. § 2016: $344,000,000 for each of fiscal years 2025 and 2026, then $257,700,000 per year through fiscal year 2030.
• Ordered a report on agent representation, not a rule: Section 4 gave VA 90 days to send Congress a strategy so veterans are not disadvantaged when securing a real estate agent, and said it “may include” amendments to 38 CFR 36.4313. A “may include” is not a change.

Note the sunset: § 3737(j) bars a partial claim more than five years after enactment, or July 30, 2030. Reauthorization takes another act of Congress, and we’ll cover it in mortgage news if it happens, not before.

How does the VA partial claim program work now that it’s live?

It runs through your servicer, not through you, and it started taking submissions June 15, 2026. VA published the final policy as Chapter 22 of the M26-4 Servicer Handbook on June 1, 2026 and gave servicers 180 days to implement, so a servicer you call today may still be building the process. VA’s homeowner page, updated September 23, 2026, says servicers have until November 28, 2026 to add partial claims to their systems, that a borrower must first complete a 3-month trial payment plan, and that the partial claim is repaid when the loan is paid off or the home is sold. VA also requires the partial claim and the loss-mitigation waterfall to be implemented together. Circular 26-25-9 (September 26, 2025) covers collection on the subordinate loan; Circular 26-26-2 (August 11, 2026) covers discharging a property from a partial claim interest.

VA’s foreclosure-prevention tools show the difference between an enacted program and a proposed one.

FHA has run a partial claim for years, which is why the two get compared. VA’s is newer and narrower: one claim per loan, a hard cap, and a five-year authorization rather than a permanent one.² For the FHA side, see Federal Housing Administration updates.

How does VA’s partial claim compare with FHA’s?

Both put a lien behind the first mortgage, but the details differ. HUD’s FHA loss mitigation page describes FHA’s partial claim as placing past-due amounts in “an interest free subordinate lien,” repaid when the last mortgage payment is made, the property is sold, the mortgage is assumed, the title is transferred or certain refinances close, whichever comes first. HUD also limits a borrower to one permanent home retention option within any 24-month period, unless a Presidentially Declared Major Disaster applies.

VA’s version carries its own default terms in statute. Under 38 U.S.C. § 3737(e), a borrower who defaults on a VA partial claim is liable to VA for its loss, VA may charge administrative costs, fees and interest “as appropriate,” and VA will not restore the veteran’s housing loan entitlement until that loss is repaid in full.

VA’s June 15, 2026 launch announcement, republished by the Air Force benefits site, says the servicer pays the overdue amount after a three-month trial payment plan and VA then pays the servicer that same amount, and that “Servicers must repay VA when the loan is paid in full, refinanced, or the property is sold,” naming refinancing alongside payoff and sale.

The payment plumbing is still being built. VA Circular 26-26-5, dated October 27, 2026 and listed on VA’s circulars index as valid until rescinded, is titled “Remittance of VA Partial Claim Payments Via Fedwire.” For scale, the American Legion reported on June 24, 2026 that VA worked with servicers to help 173,000 veterans in fiscal 2025 through its home retention options, a figure that covers every option, not the partial claim alone.

Related guides: mortgage forbearance, refinancing after a loan modification and the foreclosure process.

What did not change: the numbers that actually run your VA loan

The funding fee, at the same percentages since April 7, 2023. These are not figures VA can adjust; they sit in a table written into 38 U.S.C. § 3729(b)(2), so only Congress can move them.

The exemption is worth the most money, and it is statutory. Under 38 U.S.C. § 3729(c), no fee is collected from a veteran receiving compensation for a service-connected disability, a veteran who would be entitled but for retirement or active service pay, a surviving spouse of a veteran who died from a service-connected disability, or an active-duty member showing a Purple Heart on or before closing. VA lists the current funding fee percentages and who is exempt on its funding fee and closing costs page.

Hypothetical example, not an offer: on a $300,000 zero-down purchase in Waterford, first use at 2.15% is $6,450 if financed into the loan. Second use at 3.3% is $9,900, and under VA’s table 5% down on a subsequent-use file drops the fee to 1.5%, or $4,275.³ Our VA loan tips guide walks the same math, and VA loan benefits for veterans covers what the fee buys.

How has the VA funding fee changed since 2020?

It was higher before April 7, 2023. Public Law 116-23, the Blue Water Navy Vietnam Veterans Act of 2019, approved June 25, 2019, replaced the fee table in its section 6(b). For loans closed on or after January 1, 2020 and before January 1, 2022, it set these fees:

Source: Public Law 116-23, section 6(b), approved June 25, 2019, govinfo.gov.

Against the chart on VA’s funding fee page, updated October 5, 2026, a first-use zero-down loan now costs 0.15 percentage point less (2.15% against 2.30%) and a subsequent zero-down loan 0.30 point less (3.3% against 3.60%). Section 6(c) of the same 2019 act is where the Purple Heart waiver came from: it added the exemption for an active-duty member who shows, on or before closing, evidence of having been awarded the Purple Heart.

The VA funding fee calculator runs the current table, exemption question included.

Entitlement, occupancy and the escape clause are still where they were

None of these moved in 2025 or 2026, and three of them predate most of the people writing about them.

• The guaranty is 25%, with no VA loan limit on full entitlement: VA guarantees 25% of a loan above $144,000 under 38 U.S.C. § 3703(a)(1)(A)(i)(IV). The Blue Water Navy Vietnam Veterans Act of 2019, Public Law 116-23, struck the maximum guaranty amount for full-entitlement borrowers effective January 1, 2020.
• Partial entitlement still runs off the conforming loan limit: Where used entitlement has not been restored, § 3703(a)(1)(C)(ii) caps entitlement at 25% of the Freddie Mac conforming loan limit, less what is committed. That limit is $832,750 for one unit in 2026, announced by Circular 26-25-10.
• Occupancy is a certification, not a preference: 38 U.S.C. § 3704(c) requires the veteran to certify intent to occupy at application and again at closing, the standard being actual residence or moving in “within a reasonable time.” No statutory day count exists, which is why lender move-in benchmarks vary.
• The escape clause has been the same since 1969: 38 CFR 36.4303(k) bars a guaranty on a contract dated on or after June 4, 1969 that prices above VA’s established reasonable value, unless the contract lets the buyer walk without forfeiting earnest money.

Minimum property requirements and the Notice of Value work the same way, and the reform act did not touch them. See how to qualify for a VA loan and our loan types and programs guide.

How is remaining entitlement figured when a VA loan is still open?

VA’s entitlement and limits page, last updated August 12, 2025, works it from the Entitlement Charged column on your Certificate of Eligibility in three steps: multiply the county’s one-unit limit by 0.25, subtract the entitlement already charged, then multiply what remains by 4. VA calls that last figure the maximum most lenders would be willing to lend without a down payment, and says a lender may require a down payment when remaining entitlement is not enough for a 25% guaranty.

Hypothetical example, not an offer, for a veteran with $50,000 of entitlement still charged to an open VA loan, buying in a county at the 2026 baseline one-unit limit of $832,750 announced by the FHFA on November 25, 2025:

Source: method from VA, “VA home loan entitlement and limits” (updated August 12, 2025); one-unit limit from FHFA, “FHFA Announces Conforming Loan Limit Values for 2026” (November 25, 2025).

It is a question Samantha hears from veterans who already have a VA loan: “They’ll basically say, ‘I already used my VA loan, so I don’t think I can do that again.’ And I don’t want to guess at that. I don’t want the veteran guessing either.” (Samantha Shelton, round 3 interview answers.) The loan limits lookup shows the one-unit limit for any county in the states Align serves.

What’s scheduled, what’s pending, what’s temporary, and what was never a VA rule

Five different kinds of “change” get flattened into one word. Separating them is most of the skill.

• Already scheduled in law: The funding fee table brackets today’s percentages as applying to loans closed before June 9, 2034. On or after that date the statute sets 1.4% first use and 1.25% subsequent use at zero down, 0.75% at 5% down and 0.5% at 10% down. The 0.5% IRRRL fee carries no such bracket.
• Passed the House, not law: H.R. 6047, the Sharri Briley and Eric Edmundson Veterans Benefits Expansion Act of 2026, passed the House on May 21, 2026 and went to the Senate Committee on Veterans’ Affairs on June 2, 2026. As passed by the House, it would push the scheduled funding fee step-down from June 9, 2034 to September 30, 2036, raise the IRRRL funding fee from 0.5% to 1.42% of the loan and the assumption fee from 0.5% to 1%, and open VA home loan eligibility to certain National Guard and Reserve members with at least 14 days of qualifying active duty, with 1 percentage point added to their funding fee. It had not become law as of October 2026: VA’s funding fee chart, updated October 5, 2026, still shows 0.5% for both. Until the Senate passes it and the President signs it, nothing in it applies.
• A temporary variance, not a codified rule: Veterans have been able to pay buyer-broker compensation since Circular 26-24-14, issued June 11, 2024 and amended by Change 1 on August 5, 2024. Read the title: “Temporary Local Variance for Certain Buyer-Broker Charges.” It rests on 38 CFR 36.4313(d)(1)(ix), which lets the Under Secretary for Benefits authorize extra items as local variances, and that regulation’s own schedule of permissible charges still does not list buyer-broker compensation. In effect, and revocable. As of October 2026, VA’s circular index still lists 26-24-14 as valid until rescinded, and VA had published no proposed rule on buyer-broker charges in the Federal Register.
• Proposed, then withdrawn: VA’s advance notice on expanding incentivized loss-mitigation options, at 87 FR 62752 on October 17, 2022, was withdrawn as of January 21, 2026. Its companion on servicer tier ranking, at 87 FR 23152 on April 19, 2022, was withdrawn as of January 20, 2026. Three years of “VA is considering” resolved to nothing.
• Never a VA rule at all: The 90% ceiling on a VA cash-out refinance. VA’s regulation at 38 CFR 36.4306(a)(1) caps the new loan at 100% of reasonable value. The 90% figure does appear there, at § 36.4306(a)(3)(i)(G), as one of eight alternative ways to satisfy the net tangible benefit test. Any 90% cap you are quoted is a lender overlay.⁴

Refinance guardrails are unchanged: fees recouped within 36 months, and no guaranty until the later of 210 days from the first payment and the sixth payment. See our IRRRL guide and benefits of refinancing a VA loan. No VA instrument sets your rate, as our mortgage rates guide explains, and genuinely new offerings get covered in new mortgage products once they launch.

What would it take for H.R. 6047 to become law?

A Senate vote and a signature, and its House path was close. According to the House Rules Committee’s record for H.R. 6047, the committee reported the rule (H. Res. 1300) by a 7-3 vote on May 19, 2026, rejected 3-7 two amendments that would have struck or replaced sections 3 and 4, the sections that raise veterans’ home loan refinancing fees, and treated as adopted a manager’s amendment that changed one refinancing fee from 1.4% to 1.42%. The House agreed to the rule 208-207 on May 20, 2026.

The administration’s position is on paper. The Statement of Administration Policy dated May 21, 2026 says the administration supports the intent of H.R. 6047, recommends Congress reconsider Section 3 because its offset does not fully cover the spending increases, and is concerned about “higher home loan funding fees to finance the new benefit.” It also says that if the bill were presented to the President with amendments, his advisors would recommend signing it. The statement lists the sponsor as Rep. Barrett, a Michigan Republican.

The remaining steps are the ordinary ones. As USA.gov’s guide to how laws are made describes, a bill that passes one chamber goes to the other for committee work and a vote, and the president can then sign it into law or veto it. The House’s legislative process page adds that the President has 10 days to sign or veto the enrolled bill. Our mortgage regulation updates and impact of new mortgage regulations guides track other agencies the same way.

How to verify a claimed VA change in five minutes

1. Demand the instrument number. A public law, a Federal Register citation, a circular number, or a handbook chapter. “VA announced” is not a citation.
2. Check the verb. Introduced, proposed and requested comment mean nothing is in effect. Signed, published as a final rule and issued as a circular mean something is.
3. Read the dates, plural. Public Law 119-31 was signed July 30, 2025; the partial claim took no submissions until June 15, 2026.
4. Look for the sunset. Circulars carry a rescission line, and § 3737 carries a July 30, 2030 termination date.

Start at the VA’s home loan program requirements for eligibility and the Certificate of Eligibility, and use the CFPB’s home buying tools to compare what lenders quote you.

What Michigan veterans should know

One state provision stacks on top of the federal funding fee exemption, and it is worth more per year than the fee waiver is once.

• The disability rating can pay twice: The federal waiver under 38 U.S.C. § 3729(c) is worth $6,450 once on the $300,000 zero-down example above. Michigan separately exempts qualifying disabled veterans from property tax under MCL 211.7b, which recurs every year you own the home.
• You have to file for it: Claim it on Treasury Form 5107 (see the State of Michigan disabled veterans exemption page) with your local assessing officer after January 1 and before December 31 of the year claimed. For exemptions granted as to taxes levied on or after January 1, 2025, it continues without reapplication until rescinded or denied.⁵
• It lowers the payment, not just the tax bill: Escrow is built from the tax bill, so an approved exemption cuts the escrow portion of your payment at the next analysis. Two otherwise identical VA files in Oakland County can differ for this reason alone.

Which Michigan veterans qualify for the property tax exemption?

The Michigan test is narrower than holding any VA disability rating. Under MCL 211.7b(4)(a), a “disabled veteran” is a Michigan resident who meets one of three conditions:

• Permanent and total disability: determined by the U.S. Department of Veterans Affairs to be permanently and totally disabled as a result of military service, with veterans’ benefits paid at the 100% level (MCL 211.7b(4)(a)(i)).
• Specially adapted housing: a VA certificate showing the veteran is receiving or has received pecuniary assistance due to disability for specially adapted housing.
• Individual unemployability: rated by the VA as individually unemployable.

The Michigan Department of Treasury’s disabled veteran exemption page says the exemption also covers the unremarried surviving spouse of a qualifying disabled veteran, and it lists a State Tax Commission memo on Form 5107, “Updates and Proration Examples,” approved April 7, 2026, useful when a purchase closes partway through a tax year.

The exemption reaches your monthly payment through escrow, which our guide to mortgage escrow accounts explains. For a buyer who does not qualify, our guide to how property tax assessments work covers the assessor’s side of the bill.

FAQ: VA loan program changes

Here are answers to common questions about proposed and enacted changes to VA loan programs.

What changed with VA loans recently?

One thing, traceable to one instrument. Public Law 119-31, signed July 30, 2025, created the Partial Claim Program at 38 U.S.C. § 3737. VA published the policy as M26-4 Chapter 22 on June 1, 2026 and began accepting submissions June 15, 2026. Funding fees, entitlement, occupancy and the escape clause did not change. A House-passed bill, H.R. 6047, would change some funding fees, but as of October 2026 it is not law. See industry updates and rules.

What is the VA partial claim program?

A foreclosure-prevention tool in which VA buys part of your delinquent debt and takes a subordinate lien behind your first mortgage, moving missed payments off your delinquency instead of into a foreclosure. The cap is 25% of unpaid principal balance, or 30% if you missed a payment between March 1, 2020 and May 1, 2025. Your servicer initiates it. More in our VA loans hub.

What is the current VA funding fee?

2.15% of the loan on a first-use purchase with less than 5% down and 3.3% on subsequent use, unchanged since April 7, 2023. Five percent down drops it to 1.5% and 10% down to 1.25%; an IRRRL is 0.5%. Veterans receiving VA compensation for a service-connected disability and certain surviving spouses owe nothing. Our VA loan tips guide has the full table.

Is there a VA loan limit?

Not for a veteran with full entitlement. Public Law 116-23 removed the maximum guaranty amount effective January 1, 2020, so your lender’s approval is the ceiling. With a prior VA loan still in place, partial entitlement applies and is figured from 25% of the conforming loan limit, $832,750 for one unit in 2026. See buying a home with a VA loan.

Can I get a VA funding fee refund if my disability rating comes after closing?

Yes, if the timing lines up. VA’s funding fee page, updated October 5, 2026, says the effective date of your VA compensation must be retroactive to before the date of your loan closing. Separately, 38 U.S.C. § 3729(c)(2) treats a service member rated through a pre-discharge disability examination, or a pre-discharge review that produces a memorandum rating, as receiving compensation from the rating date, even before an award effective date is set.

Who do I call if my servicer won’t help with a VA partial claim?

VA’s own loan technicians. As the American Legion reported on June 24, 2026, VA tells veterans who have trouble reaching a resolution with their mortgage servicer to call 877-827-3702 and select option 6. VA’s foreclosure help page lists technician hours as Monday through Friday, 8:00 a.m. to 6:00 p.m. ET, with TTY at 711.

What options does VA offer besides a partial claim?

Several. VA’s homeowner page, updated September 23, 2026, lists special forbearance, a repayment plan, a VA traditional loan modification that adds missed payments and related legal costs to the balance, a 30-year modification and a 40-year modification. When keeping the home is not workable, it lists extra time to arrange a private sale, a short sale and a deed in lieu of foreclosure. Our guide to short sales and foreclosures compares the last two.

What closing costs can a veteran pay on a VA loan?

Only those VA’s regulation allows. 38 CFR 36.4313(d) lists items such as the VA appraisal, recording fees, a credit report, title work and flood zone determination, plus a lender flat charge of no more than 1 percent of the loan in place of other origination costs. VA’s State Fees and Charges Deviations List was updated by Circular 26-26-1 on February 17, 2026 and Circular 26-24-19, Change 1, on June 4, 2026 on VA’s circulars index. See closing costs.

Where can a Michigan veteran get help with VA benefits?

Start with the state agency. The Michigan Veterans Affairs Agency says to call 1-800-MICH-VET (1-800-642-4838) to connect with its Michigan Veteran Resource Service Center, and it points veterans to a Veteran Service Officer nearby through Michigan.gov/VSO. Questions about the mortgage itself, such as a partial claim, still go to your servicer or VA.

The bottom line on proposed changes to VA loan programs

The one big VA change of the last two years is enacted, dated and citable: Public Law 119-31, signed July 30, 2025, created the Partial Claim Program at 38 U.S.C. § 3737, capped at 25% of unpaid principal balance, live for submissions since June 15, 2026, and set to expire July 30, 2030. Most of what else veterans get told is “changing” is untouched since April 7, 2023, like the 2.15% and 3.3% funding fee, a revocable circular variance, a proposal VA withdrew in January 2026, a House-passed bill that is not law, or a lender overlay wearing a VA badge, like the 90% cash-out ceiling VA’s own regulation puts at 100%. Ask which instrument, and ask for the date.

If you’re ready to put your VA benefit to work under the rules that are actually in effect, talk to Align Lending. We’ll shop your scenario across our lender network and show you the funding fee, the entitlement math and the pricing side by side. Call 248-506-5727 or start online.

Footnotes:

1. Align Lending works with VA-approved lenders and is not endorsed or sponsored by the U.S. Department of Veterans Affairs or any government agency. Return to text.

2. Align Lending is not acting on behalf of or at the direction of FHA or HUD, and is not affiliated with or endorsed by HUD or the Federal Housing Administration. FHA and VA loss-mitigation programs are set by their respective agencies, are subject to change, and are administered by your servicer. Return to text.

3. Example figures in this article are hypothetical and for educational purposes only; they do not constitute an advertisement of credit terms or a rate quote under federal or state lending laws. Your funding fee, rate and terms depend on your application, your entitlement status and market conditions, and will be itemized on your Loan Estimate and Closing Disclosure. Return to text.

4. Loan-to-value ceilings on cash-out refinances, minimum credit scores, reserve requirements and rental-income documentation standards described as common in the market are set by lenders in Align’s network, not by VA, and vary by lender and by file. Return to text.

5. This is general information, not tax or legal advice. Property tax exemption eligibility, forms and deadlines are set by Michigan law, administered locally, and subject to change. Confirm your situation with your local assessor, the Michigan Department of Treasury, or a qualified tax professional. Return to text.

Figures checked against the sources below in October 2026; verify with the linked source before relying on them. Sources: Enactment July 30, 2025, passage by the House May 19, 2025 and the Senate July 15, 2025, creation of 38 U.S.C. § 3737, the 25% cap on unpaid principal balance, the 30% cap for payments missed between March 1, 2020 and May 1, 2025, one partial claim per loan with a major-disaster exception, the subordinate secured interest, application of proceeds first to arrearages including taxes, insurance and homeowners dues, the mandatory loss-mitigation sequence added at 38 U.S.C. § 3732(d), the bar on purchasing an entire loan before that sequence is complete, the Section 4 report on real estate agent representation and its reference to 38 CFR 36.4313, the homeless veterans authorizations of $344,000,000 for each of fiscal years 2025 and 2026 and $257,700,000 per year through fiscal year 2030 at 38 U.S.C. § 2016, and the five-year termination of partial claim authority at § 3737(j), Public Law 119-31, VA Home Loan Program Reform Act, H.R. 1815, 139 Stat. 475, July 30, 2025. Funding fee percentages for initial and subsequent loans at 0-down, 5-down and 10-down, the IRRRL fee of 0.5%, the loan assumption fee of 0.5%, the April 7, 2023 and June 9, 2034 date brackets, the definitions of 0-down, 5-down, 10-down, initial loan and subsequent loan, and the fee waiver for veterans receiving compensation, veterans who would be entitled but for retirement or active service pay, surviving spouses of veterans who died from a service-connected disability, Purple Heart recipients on active duty, and pre-discharge or memorandum ratings, 38 U.S.C. § 3729(b)(2) and (c), with the June 9, 2034 date set by Public Law 118-210 and announced in VA Circular 26-23-6, Change 2, January 21, 2025. Current funding fee chart effective April 7, 2023, VA funding fee and closing costs page, updated October 5, 2026. House passage of H.R. 6047 on May 21, 2026, and its amendments to the 38 U.S.C. § 3729(b)(2) loan fee table (June 9, 2034 replaced with September 30, 2036; IRRRL fee 0.50 to 1.42; loan assumption fee 0.50 to 1.0) and the Home Affordability for Guard and Reserve Act provisions, H.R. 6047 as engrossed in the House; referral to the Senate Committee on Veterans’ Affairs June 2, 2026, congress.gov. Guaranty of 25% on loans above $144,000, partial entitlement calculated as 25% of the Freddie Mac conforming loan limit less entitlement previously used and not restored, and the definitions of covered veteran and Freddie Mac conforming loan limit, 38 U.S.C. § 3703(a)(1)(A)(i)(IV) and (a)(1)(C). Removal of the maximum guaranty amount for full-entitlement borrowers, Blue Water Navy Vietnam Veterans Act of 2019, Public Law 116-23, § 6, effective January 1, 2020. Occupancy certification at application and at closing and the reasonable-time standard, 38 U.S.C. § 3704(c). Escape clause requirement for contracts dated on or after June 4, 1969 and the required contract language, 38 CFR 36.4303(k). Cash-out refinance cap of 100 percent of reasonable value, the net tangible benefit test and its eight alternatives including a new loan amount equal to or less than 90 percent of reasonable value, the 36-month recoupment requirement, and the seasoning requirement of the later of 210 days from the first monthly payment and the date the sixth monthly payment is made, 38 CFR 36.4306(a) and (b). Schedule of permissible charges the veteran may pay, the 1 percent flat charge, and the local-variance authority of the Under Secretary for Benefits, 38 CFR 36.4313(d). Temporary local variance permitting Veteran-paid buyer-broker charges and VA’s statement that permanent policy would follow through notice-and-comment rulemaking, VA Circular 26-24-14, June 11, 2024, and Change 1, August 5, 2024. VASP implementation May 31, 2024, rescission of the VA Home Retention Waterfall and end of VASP submissions as of May 1, 2025, and continuation of active trial payment plans through August 31, 2025, VA Circular 26-25-2, April 23, 2025. Collection of outstanding partial claim subordinate loans, VA Circular 26-25-9, September 26, 2025. Non-judicial foreclosure to discharge a property from a VA partial claim interest, VA Circular 26-26-2, August 11, 2026. Announcement of the 2026 conforming loan limits to VA program participants and the January 1, 2027 rescission date, VA Circular 26-25-10, December 1, 2025. Servicer deadline of November 28, 2026 to add partial claims to their systems, the 3-month trial payment plan, and repayment when the loan is paid off or the home is sold, VA “Trouble making payments” page, updated September 23, 2026. Status of Circular 26-24-14 and Change 1 as valid until rescinded, VA Home Loans circulars index, checked October 2026. Publication of final partial claim policy on June 1, 2026, the 180-day servicer implementation window, VA readiness to accept partial claim submissions on June 15, 2026, and the requirement that the partial claim and loss-mitigation waterfall be implemented together, VA Servicer Handbook M26-4, Chapter 22, and VA Partial Claims Program and Loss Mitigation Waterfall FAQs for Servicers, benefits.va.gov. Statutory authority of Public Law 119-31 for expanded loss mitigation and partial claim activities, removal of VASP data elements due to program wind-down, and discontinuation of the COVID-19 Veterans Assistance Partial Claim Program and COVID-19 Refund Modification due to expiration of COVID-related authorities, VA Loan Electronic Reporting Interface (VALERI) information collection notice, Federal Register, April 27, 2026. Withdrawal of the advance notice of proposed rulemaking on incentivized loss-mitigation options published at 87 FR 62752 on October 17, 2022, effective January 21, 2026, and withdrawal of the advance notice on servicer tier ranking published at 87 FR 23152 on April 19, 2022, effective January 20, 2026, Department of Veterans Affairs, Federal Register. Structure of the VA Lenders Handbook, VA Pamphlet 26-7, and its numbered Change transmittals, and the M26-4 Servicer Handbook, VA Web Automated Reference Material System, benefits.va.gov. One-unit baseline conforming loan limit of $832,750 for 2026, Federal Housing Finance Agency, “FHFA Announces Conforming Loan Limit Values for 2026,” November 2025. Michigan disabled veterans property tax exemption, Form 5107 filing with the local assessing officer after January 1 and before December 31 of the year claimed, and continuation without reapplication for exemptions granted as to taxes levied on or after January 1, 2025, MCL 211.7b.

This article is for informational purposes only and is not intended to provide legal, financial, or tax advice. VA program rules, funding fee percentages, entitlement calculations, circular effective dates, lender overlays and state property tax provisions change; confirm your figures with VA, your Loan Estimate and Closing Disclosure, and a qualified professional. Pending legislation and proposed rules described here are identified as such and are not in effect unless this article says they are. Figures shown are illustrative, are not a rate quote or an offer of credit, and are subject to change. Align Lending is an independent Michigan mortgage broker, NMLS #2041154, and is not endorsed or sponsored by the U.S. Department of Veterans Affairs or any government agency.

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