VA to Repay $100 Million in Home Loan Fees Erroneously Charged to Veterans

In the wake of a scathing, bipartisan letter from lawmakers, the Department of Veterans Affairs says it will refund $100 million in fees erroneously charged to thousands of exempted veterans who participated in the VA Home Loan Program.

In June, the department’s Office of Inspector General reported that $286.4 million in home loan fees had been wrongly charged to about 72,900 veterans who are entitled to VA disability compensation and therefore exempt from paying the fees.

The report also found that despite knowing of the erroneous charges, the VA had not given refunds to about 53,200 exempt veterans who were collectively owed $189 million. 

Last month, freshmen Representatives Mike Levin, D-Calif., chair of the House Veterans’ Affairs Subcommittee on Economic Opportunity, and Chris Pappas, D-N.H., chair of the Subcommittee on Oversight and Investigations, wrote a letter to VA Secretary Robert Wilkie requesting information on the status of the payments.

The letter, sent on June 24, noted that “the amounts owed by VA averaged $4,483, with some veterans owed as much as $19,470.”

“I am encouraged to see that the VA has begun to repay millions of dollars in home loan fees that were erroneously charged to veterans,” Levin said earlier this week. “However, it is clear that the total owed by the VA is far greater than the $189 million identified to date. 

“I called on the VA to repay every last dime to veterans who were charged a fee they didn’t owe. They committed to me that all veterans will be paid back by the end of September, and I intend to make sure they follow through,” he said.

In a statement released last month, Levin said, “It is totally unacceptable that tens of thousands of our nation’s heroes were charged enormous sums of money that they didn’t owe because of negligence at the VA. The men and women who have served our country deserve better, and the VA must correct this situation immediately.”

“It is extremely alarming that the VA did not have adequate safeguards in place to ensure our veterans receive their earned benefits, leading to more than $280 million in improper payments,” Pappas said at the time. “We look forward to hearing from the VA on how they plan to remedy this immediately so veterans do not continue to face undue financial burdens.”

In the Senate, both Senators Jon Tester, D-Mont., and John Boozman, R-Ark.., have introduced legislation to ensure the repayment of the loan fees. However, the VA has moved to resolve this issue before the legislation is passed.

“Ensuring our veterans are not unfairly burdened while accessing home loans isn’t a partisan issue, so when VA doesn’t hold up its end of the deal, we need to do something about it,” said Tester, the ranking Democrat on the Senate Veterans Affairs Committee.

“Veterans rely on the VA to properly administer benefits they earned in service to our country,” Boozman said. “The department’s failure to uphold this responsibility has unduly burdened disabled veterans.”