For the past five years, the VA Home Loan program has knowingly withheld $150 million in refunds for certain disabled Veterans.
A special investigation by my friends at Kare 11 exposed an internal report leaked by whistleblowers at St. Paul Regional Office. That report shows VA conducted its own audit five years ago concluding the agency was wrongfully withholding $150 million from certain Veterans.
The crux of the problem lies with the VA funding fee charged to borrowers, usually a few thousand dollars per loan. Sometimes the loan is waived based on a Veteran’s disability rating. Here, Veterans whose disability claim is pending when the loan fee is billed should receive a refund if the date of entitlement is before the loan’s closing date.
However, VA has known that since at least 2014, the agency failed to make required changes.
Here is how the VA report starts out:
The St. Paul Regional Loan Center has discovered that in the last 8 years, Veterans have been paying funding fee charges when they were exempt from the Funding Fee. This report details the circumstances surrounding what caused this to happen, suggests options to ensure this does not happen in the future. As this is going to be a large undertaking we have also provided several options to return the money to affected Veterans.
The fees associated with these loans is well over $1 billion annually.
VA Home Loan Fix
The report concludes with a solution:
We estimate that Funding Fee refunds initiated by lenders currently take approximately 20 minutes to process. Extrapolating that number over the 47,588 anticipated refunds gives us an estimated 951, 160 minutes, or nearly 16,000 hours to complete. This would be approximately 8 full time employees (FTE) for 1 year. We believe that timeframe could be cut in half if a dedicated staff is utilized and they are allowed to apply all refunds to loans that are current.
So, to recap, VA has known about the problem since 2014. Almost six years have passed since the issue was brought to the attention of senior leadership. Yet, nothing.
Just prior to publication, Kare 11 received word from VA that the agency intends to act on the report. I can assure you any failure of the agency to address this VA Home Loan scandal coming into the election will not look good for the Trump Administration.
VA To Fix Funding VA Issue
VA’s Curt Cashour issued a press release with the following excerpt:
“A major issue under review is how VA credits borrowers who, after loan closing, were awarded disability compensation with retroactive effective dates. The department is working to determine how far VA can go to provide relief, given the current restrictions of applicable laws.
“VA’s ongoing quality review looked at millions of loans dating back to 1998 originations. Since the initiative is ongoing, VA has not totaled how many borrowers might be helped by the new efforts.”
Who was responsible for initially sitting on the report without taking action?
Kare 11 points the finger at Mike Frueh, then Director of the VA Home Loan program. What happened to Frueh since 2014?
He was promoted to VBA Chief of Staff.
Here is a simple strategy to analyze your VA Voc Rehab denial despite the confusing Appeals Modernization buffet of appeals options including Higher Level Review.
Many Veterans are confused about their VA Voc Rehab denial and the next steps in analyzing your options after Appeals Modernization (February 19, 2019) – – almost as if the Veteran is walking on a ledge blindfolded.
The confusion is well earned. God knows the number of legal analysts VA hired to help create a more convoluted system than what it previously did.
Options for Veterans to appeal a denial were just increased from two to six, and with that change came an infinite number of options Veterans must consider. Luckily, despite the additional options and new decision matrix that resulted, any Voc Rehab denial usually has the starting point for any Veteran seeking to appeal.
This article provides a simple strategy for Veterans to follow when considering their options after being denied Voc Rehab benefits.
How do I know?
I have spent the past decade helping Veterans understand their Voc Rehab benefits, and five of those were as an attorney. Appellate laws may change a lot (and they have!!), but the strategy to unwind a scheming agency employee remains the same.
Look at what the counselor says. Compare it to what the counselor was supposed to say. You will usually locate the error straight away.
What I am about to say does not reflect all program employees. Many of them really care about Veterans. However, there are also many employees, including fellow Veterans, who are not following Voc Rehab’s mandate:
The purposes of this program are to provide to eligible Veterans with compensable service-connected disabilities all services and assistance necessary to enable them to achieve maximum independence in daily living and, to the maximum extent feasible, to become employable and to obtain and maintain suitable employment. 38 CFR § 21.1.
Over the past five years, many Voc Rehab Counselors have grown more conservative, sometimes even afraid, when making decisions about benefits. That fear has resulted in counselors banding together at some offices making decisions that contradict regulatory mandates.
What could it mean to enable a Veteran to achieve maximum independence in daily living AND to become employable and to obtain and maintain suitable employment TO THE MAXIMUM EXTENT FEASIBLE?
Does that mean VA counselors should never approve graduate school for any Veteran? Does that mean no Veteran should be approved for self-employment benefits? Does that mean no Veterans get more than 48 months of training?
The answer should be “No” to all of those questions, but some offices allow their counselors to issue blanket denials for certain request types without regard to a particular Veteran’s fact set.
Why is this allowed?
VA Voc Rehab Denial And Herd Mentality
Voc Rehab is a program rife with the herd mentality.
The herd mentality basically means everyone in the same organization things and says the same or similar thing, largely based on emotion rather than using logic and reason. Making it worse, some counselors believe Voc Rehab should never approve graduate-level training to include medical doctorates or related professional training.
In 2010, I wrote an article for Military.com called The Lies They Tell that I later renamed The Biggest Lies Voc Rehab Tells Veterans. There, I called out the top four lies some Voc Rehab Counselors tell Veterans, over and over. I say “some” because many counselors are great and do good work.
Those good counselors have yet to make a dent in the bad counselors or the culture that created them.
Almost a decade later, not only are those same lies being repeated, but the number of liars has seemingly increased. The only basis I can find for the consistent lies is herd mentality where the common culture supports violating the dreams of Veterans with unsupported denials.
Fortunately for you, I have catalogued the more consistent lies. And, since consistent lies are somewhat predictable, they lend themselves to the development of a strategy.
This strategy is useful for Veterans adversely affected by a denial that falls into this camp of lies or misrepresentations.
Due to fear of being undone or making errors that contradict the herd mentality, counselors err on the side of caution, at least to them, by drafting vague denial letters.
Before Appeals Modernization, many denial letters failed to mention regulations or statutes that supposedly supported the denial.
After Appeals Modernization, the denial letters are chock-full of references to statutes and regulations without actually citing them, and without a clear explanation as to why the facts presented do not form a basis for approval.
The problem with Voc Rehab’s new approach is that it fails to provide Veterans with adequate notice of the evidence evaluated or the real reason why the particular evidence does not support the request for benefits.
How The Denial Letter Should Look
Despite the vagueness, one thing is clear. Decision letters must still follow the regulatory requirements in 38 CFR § 21.420. This regulation explains what the counselor is required to put into all adverse decision letters.
A Simple Strategy
Veterans now have an infinite number of factors to consider when selecting which of the six options they appeal – – and I use the term appeal loosely now that VA relabeled its appeal process with numerous “review” options.
My step one below is the simple strategy. From there, the appeals process gets much more complicated.
Step One: Analyze The Voc Rehab Denial
Each notification should include the following list of information. The new 38 CFR § 21.420 indicates what VA “should include” rather than must, which in itself is quite curious since the lack of the following information would deprive someone of adequate notice.
Anyway, the decision letter should include the following:
(1) Identification of the issues adjudicated.
(2) A summary of the evidence considered by the Secretary.
(3) A summary of the applicable laws and regulations relevant to the decision.
(4) Identification of findings favorable to the Veteran.
(5) In the case of a denial of a claim, identification of elements not satisfied leading to the denial.
(6) An explanation of how to obtain or access evidence used in making the decision.
(7) A summary of the applicable review options available for the Veteran to seek further review of the decision.
Most decision letters are templative meaning the majority of the letter is prewritten by Regional Office leadership. It will not apply directly to the Veteran without substantive edits.
Here, VA will likely screw up its requirements under 2-5. Voc Rehab Counselors frequently fails to identify favorable findings and evidence the Veteran may present.
Odds are most Veterans will be able to identify an error.
And that is the simple strategy. Review the Voc Rehab denial letter. Compare it against the facts and evidence you know was presented to the counselor.
Frequently, Veterans will find the error within the plain language of the denial letter. Easy peazy.
That is where the simple strategy ends.
Pick The Review Or Appeal Type
Veterans have a choice between multiple types of reviews that used to simply be called the appellate process. Apparently, VA thought the term “modernization” means “complicated.”
You can choose between a Higher Level Review, Supplemental Claim, or a formal Appeal. If you pick the Appeal, you will have the choice between a hearing, providing new evidence without a hearing, or simply having a Veterans Law Judge decide the issue without additional evidence. Be sure to pick the right form… Lol.
Okay, at this point you may be saying, “Krause lied — this new appeals process sounds too complicated for a simple strategy.”
Fair enough. I will cut to the chase, but the selection process to challenge a denial complicated, so I can only give you insight into what could work based on the type of error.
If the error in question is an interpretive error regarding the law as it relates to the facts, I suggest considering a Higher Level Review (HLR). For the HLR, request a formal hearing on the record – – this is like the old DRO process – – and ask that the sister station review.
This will ensure a fresh look at the facts and argument that avoids the possible herd mentality that impacted your denial.
Basic Factual Error
If the error is a basic error of the evidence you presented, you should consider an HLR, too. This type of review will ensure that the error gets a senior look. You should request the hearing option and be ready to present the evidence, again.
If the Voc Rehab denial is maintained, then you could consider presenting additional evidence to supplement your claim in the Supplemental Claim process.
What I do not like about the Supplemental Claim option is that it allows the original counselor to make a decision on your claim. Unfortunately, if you were impacted by the herd mentality the first time, the counselor will likely double down.
If you are running into the herd, then your next best option could be to present new evidence and argument to the Board.
Now, the time for a Board hearing is still taking a while. So, the quicker option is the present new evidence and argument to the Board in writing. This should result in a speedy decision.
The unfortunate fallout of the new process is that Veterans lose their right to the agency’s duty to assist once the agency makes the first denial unless the denial was predicated on a failure to assist or some related error.
The trade-off is the quicker, but more confusing, adjudication process that can seemingly go on forever so long as you keep coming up with new evidence. Once you select one of the review options, you cannot change mid-stream but instead must wait until a new decision is rendered.
To provide feedback on the benefit of the old system… Back in the day when we used to walk to school uphill both ways, a Veteran could submit new evidence whenever it was developed.
In the new system, the Higher Level Review and one of the Board appeals lanes do not allow for new evidence. However, I am not clear how that works when you ask for a formal hearing as part of the Higher Level Review process.
The HLR is basically the program’s old Administrative Review with some new restrictions.
The new system is much more complicated than the old system. And, I can tell you the new system was not created for the purpose of making the appeal easy for Veterans, because it does the exact opposite.
This article gives you some ideas to consider when making decisions about your appeal.
The denial of home loans by the U.S. Department of Veterans Affairs (VA) to military Veterans because of work in the state-legal marijuana industry is prompting congressional action.
On Thursday, the House Appropriations Committee included language in a report attached to a 2020 VA funding bill demanding clarification on the issue:
“Home Loan Income Verification.—The Committee is aware of the Department’s denial of home loan guarantees to Veterans solely on the basis of the Veteran’s documented income being derived from state-legalized cannabis activities. The Committee is concerned that the Department has never publicly stated its position on this matter, hindering Veterans’ ability to fully understand and consider how employment decisions could affect future eligibility for earned benefits. The Committee therefore directs VA to publicly clarify its position on this matter no later than 180 days after the enactment of this Act.”
Separately, Reps. Katherine Clark (D-MA) and Julia Brownley (D-CA), the chair of the House Veterans’ Affairs Subcommittee on Health, are also currently circulating a congressional sign-on letter to VA about the issue.
“Recently, a Veteran reported that his VA home loan guarantee application was denied based on his employment in a state-legal cannabis industry. The VA’s response indicated that the Department considered the Veteran’s source of income not to be ‘stable and reliable’ enough for the purpose of mortgage applications,” the lawmakers wrote in a cover message seeking signatures from other members of Congress for the VA letter.
“Because the VA believes that this income can be forfeited or seized under federal law, they won’t deem it suitable for a VA loan,” Clark and Brownley told their colleagues in the note, which was obtained by Marijuana Moment. “The VA also explained that if VA employees were to accept this income for the purpose of a loan application, they could technically be prosecuted by DOJ for money laundering.”
The draft letter to VA Secretary Robert Wilkie, like the appropriations bill report language, presses VA to clarify its position on the issue.
“A vast majority of U.S. states have now legalized medicinal and/or recreational cannabis in some form, giving rise to a state-legal industry that generates up to $11 billion per year in sales, creates over $1 billion in state-collected excise tax revenues, and supports the livelihood of over 211,000 Americans,” the letter to the secretary says. “A substantial number of Veterans earn their livelihoods in this industry, and in coming years, that number is likely to further rise.”
“The VA must acknowledge this reality and ensure Veterans who work in this sector are able to clearly understand and can equitably access the benefits they’ve earned.”
“The ambiguity under which the cannabis industry operates is unique, and we fully understand the VA’s resulting aversion to legal and financial risk,” the draft letter to Wilkie states. “Denying Veterans the benefits they’ve earned, however, is contrary to the intent Congress separately demonstrated in its creation of VA benefit programs.”
While VA has provided guidance on certain related matters such as a clarification that Veterans will not lose their VA benefits just for using cannabis and specifying that the department’s physicians can discuss marijuana usage with patients but not issue formal recommendation for medical cannabis, the department hasn’t put anything in writing concerning housing loan qualifications for Veterans who work in the marijuana market, at least not publicly.
“Yet, the VA has not issued any policies or guidance on this topic, leaving Veterans with no way to clearly and readily understand whether their choice of legal employment in this industry could result in the denial of benefits they’ve earned,” the letter says.
“We ask that you reply in the next 30 days detailing the Department’s position on loan guarantees, and that to the extent practicable, you also include information about whether a Veteran’s eligibility for any other specific VA benefit is jeopardized solely on the basis of their employment in a legal cannabis industry in a given state. We also request that your reply include an assurance that you will begin the process of issuing guidance to publicly clarify the VA’s position on this matter.”
Separately, the House Appropriations Committee report attached to the VA funding bill also includes a section demanding VA explain its efforts to conduct research on marijuana’s therapeutic benefits for Veterans:
“Cannabis Research.—The Committee recognizes that continued focus on the discovery of treatment alternatives for Veterans diagnosed with various conditions, such as chronic pain and PTSD, is essential to reducing the number of Veteran suicides. For this reason, the Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019 (P.L. 115– 244) urged VA to utilize funds to prioritize investments in research on the efficacy and safety of cannabis usage among the Veteran population for medicinal purposes and submit a report to the Committee no later than 180 days after enactment of that Act. The report has yet to be submitted to the Committee, therefore the Committee directs VA to provide a status update of this outstanding report no later than 15 days after the report is filed.”
Similar language was included in a report from the same committee last year, but VA apparently has not complied with the prior request to issue a report to Congress on the matter.
Veterans and cannabis issues have been front and center in the 116th Congress, with three pieces of related legislation having been discussed at a House Veterans subcommittee hearing in April. Two of those bills were set to get a full committee vote on Wednesday, but they were pulled from the agenda after the chairman decided to instead hold a yet-to-be-scheduled hearing focused specifically on the marijuana proposals.
From 2010 through 2016, the Veterans Benefits Administration spent $65 billion on educational benefits for 1.6 million Veterans, spouses and children, mostly for Veterans’ tuition, fees, and housing. In 2016, VBA spent an average of $17,400 per beneficiary.
Beginning August 1, 2009, the Post-9/11 GI Bill extended educational benefits to service members who were on active duty in the military on or after September 11, 2001. This GI Bill (officially the Post- 9/11 Veterans Educational Assistance Act of 2008), the latest version of a law that helps Veterans pay for higher education, provides more extensive benefits than have ever been offered to current and former service members, enabling them to transfer its benefits to certain family members and to enroll in a wide array of educational and training programs. In March 2019, the Department of Veterans Affairs (VA) reported that in 2018 it spent about $10.7 billion on 700,000 beneficiaries of the Post-9/11 GI Bill.
At the request of the House Budget Committee, the Congressional Budget Office analyzed data from VA to understand the law’s cost, the types of educational programs beneficiaries enrolled in, and the institutions they attended. CBO also reviewed research related to some of the law’s stated purposes, such as motivating people to join or stay in the military and using the educational benefits as part of readjusting to civilian life. This analysis primarily describes spending in 2016, with some information from 2017 and some historical data from 2009 onward.
What Benefits Does the Post-9/11 GI Bill Offer?
The Post-9/11 GI Bill is more generous than earlier GI bills. Beneficiaries are eligible for 36 months of postsecondary education, including full tuition and fees at public colleges and universities (or up to $23,672 for the 2018–2019 academic year toward tuition and fees at private schools), as well as a housing allowance, books and supplies, and other related expenses. After 2009, the Congress further expanded the law, among other things allowing benefits to be used for nondegree and apprenticeship programs. The amount of benefits people receive depends on the length of their qualifying active-duty service (partial benefits are available with a minimum of 90 days’ service), enrollment status (full time or part time), and the type of school or program they enroll in.
The Post-9/11 GI Bill differs from its predecessors in several important ways: There is no specific dollar limit on tuition and fees for programs at public institutions; benefits may be transferred to spouses or children once members have served between 6 and 16 years in the military; and students generally may use the benefit at any point in time.
How Much Is Spent on the Law’s Benefits?
The Veterans Benefits Administration (VBA) spent $65 billion (in 2018 dollars) on about 1.6 million beneficiaries in the seven years from the law’s inception through 2016, CBO estimates.
In 2016 (the most recent year for which beneficiary data were available), most spending on the Post-9/11 GI Bill (82 percent) was for Veterans, and the remainder was for spouses and children (see figure below). Total annual benefits were, on average $17,400 per person. (Active-duty personnel, who are about 10 percent of Post-9/11 GI Bill recipients annually, were excluded from the analysis of beneficiaries.) Tuition, fees, and housing accounted for 95 percent of total spending in that year.
The housing allowance, the most expensive of the law’s benefits, is set at the amount of the Department of Defense’s monthly basic housing allowance. It accounted for about half of the spending for Veterans, about 45 percent of the spending for children, and 30 percent of the spending for spouses, who often received housing through the service member. Most beneficiaries (90 percent) attended programs more than half time, which qualified them for part or all of the housing benefit.
Spending was less per capita for students who enrolled in programs that were primarily online than it was for beneficiaries who attended brick-and-mortar schools, CBO estimates. That is because tuition and fees for online programs tend to be lower compared with other programs and because the housing allowance for students in online programs is set at half of the monthly basic housing allowance.
What Types of Schools Do Beneficiaries Attend?
Veterans and spouses who used the law’s benefits chose different types of education than their children did. Veterans and spouses were less likely than their children to enroll in public institutions; they were more likely to pursue postsecondary programs at junior colleges, private nonprofit and for-profit institutions, and graduate schools. By contrast, most children, like many college-age students nationwide, attended undergraduate programs at public universities and colleges.
Veterans and spouses enrolled in online programs at about the same rate as all students nationwide (13 percent of Veterans and 17 percent of spouses in 2016, compared with about 13 percent of all students). Children of Veterans enrolled in such programs at much lower rates (about 2 percent). Overall, 8 percent (about $900 million) of total spending on the Post-9/11 GI Bill in 2016 was for beneficiaries in online programs.
The majority of beneficiaries in 2017 (the most recent year for which data on payments to institutions were available) attended public institutions; VBA paid those schools less per capita than it paid private nonprofit and for-profit institutions.
Since the law’s inception, 8 of the 10 institutions that received the largest amounts of tuition and fees have been private for-profit institutions. For-profit firms accounted for a very large share of the online programs used by beneficiaries.
Does the Law Meet Its Objectives?
The degree to which the Post-9/11 GI Bill achieves the purposes set out in the bill is difficult to measure. Because VBA collects little data on the number of beneficiaries who complete programs and no information on employment outcomes, the effectiveness of the benefits in helping service members readjust to civilian life is unclear. (Lawmakers enacted legislation in 2016 and 2017 to require VBA to provide more data on outcomes, but as of April 2019 VBA had not delivered its report.)
Recent research indicates that the newest GI Bill is comparable to prior Veterans’ education benefits in that it makes retaining service members more difficult because in order to use the educational benefits themselves, service members usually must separate from the military. The option to transfer benefits to dependents, which was designed to encourage longer service, appears to have had little impact. Furthermore, because beneficiaries have broad latitude in choosing a program, VBA has limited ability to ensure that beneficiaries enroll at institutions whose graduates have strong employment prospects and relatively high earnings. About one-third of Veterans using Post-9/11 GI Bill benefits in 2016 attended for-profit programs, and most research indicates that graduates of such institutions have worse labor market outcomes than similar students in public institutions.
More than 21 million Veterans and Servicemembers live in the U.S. today, but only about 6 percent of them bought a home using a VA home loan in the past five years. That percentage could be much higher.
Eligible Veterans often bypass the program as a viable option for a number of reasons.
First, they may not know all the advantages. Second, they may think getting a VA loan is an arduous process to be avoided. Last, some lenders don’t take the time to teach Veterans about the program, or don’t know much about it themselves. The VA home loan is a program non-military home buyers wish they had access to.
My advice: take a few minutes to learn these 10 facts about the program, and you’ll all but forget about any other home buying or refinance option.
1. No down payment, no mortgage insurance
These are perhaps the biggest advantages to a VA loan. You don’t need a down payment. None whatsoever. Most mortgage programs, such as FHA and conventional loans, require at least 3.5 percent to five percent down.That’s up to $12,500 on a $250,000 home purchase.
With a VA loan, you can buy immediately, rather than years of saving for a down payment. With a VA loan, you also avoid steep mortgage insurance fees. At 5 percent down, private mortgage insurance (PMI) costs $150 per month on a $250,000 home, according to PMI provider MGIC.
With a VA loan, this buyer could afford a home worth $30,000 more with the same monthly payment, simply be eliminating PMI. Using a VA loan saves you money upfront, and tremendously increases your buying power.
2. Use your benefit again and again
Your VA home loan benefit is not one-and-done. You can use it as many times as you want. Here’s how.
Assume you purchased a home with a VA loan. But now, you’ve outgrown the home and need something bigger. When you sell the home and pay off the VA loan completely, you can re-use your benefit to buy another home. Your entitlement is restored in full.
But that’s not the only way to re-use your benefit.
Eligible Veterans and Servicepersons can receive a one-time restoration when they pay off the VA loan, but keep the home. This scenario comes into play if you purchased the home long ago, and have paid off the loan. It also applies if you have refinanced the VA mortgage with a non-VA loan.
In these cases, you can keep the home, and enjoy the benefits of VA home buying one more time.
3. Your benefit never expires
Once you have earned eligibility for the VA home loan, it never goes away. Those who served 20, 30, even 50 years ago often wonder whether they can still buy a home today if they never used their benefit. If eligibility can be established, the answer is yes.
Eligibility is based on the length of time served, and the period in which you served. For instance, a U.S. Army Veteran with at least 90 days in service during the Vietnam era is likely eligible.
To check eligibility, first obtain your DD Form 214. With that document, a VA-approved lender can request your VA Certificate of Eligibility for you, or you can request it directly from VA’s eBenefits website. You may be eligible to buy a home using a VA home loan, even if you served long ago.
4. Surviving spouses may be eligible
More than 3,000 surviving spouses purchased a home with their fallen partner’s VA benefit in 2015. Un-remarried husbands and wives of Servicepersons who were killed in action can buy a home with zero downpayment and no mortgage insurance. Plus, the VA funding fee is waived.
There’s no way to repay the spouse of a fallen hero, but this benefit surely helps them move forward after tragedy.
5. VA Loan Rates Are Lower
According to loan software company Ellie Mae, VA loan rates are typically about 0.25% lower than those of conventional loans. The VA backs the mortgages, making them a lower risk for lenders. Those savings are passed on to Veterans.
Additionally, VA loans come with some of the lowest foreclosure rates of any loan type, further reducing risk for lenders. No surprise here, but Veterans and Servicepersons take homeownership seriously. These factors add up to lower rates and affordable payments for those who choose a VA loan.
6. VA loans are available from local lenders
The VA home loan is unlike most other VA benefits. This benefit is available from private companies, not the government itself. The Department of Veterans Affairs does not take applications, approve the loans, or issue funds. Private banks, credit unions, and mortgage companies do that.
The VA provides insurance to lenders. It’s officially called the VA guaranty. The VA assures the lender that it will be repaid if the Veteran can no longer make payments. In turn, lenders issue loans at superior terms. In short, a VA loan gives you the best of both worlds. You enjoy your benefit, but have the convenience and speed of working with your chosen lender.
7. Buy, refinance or tap into home equity
The VA home loan benefit is not just for buying homes. Sure, it provides unmatched home buying advantages, but you can also use it to refinance your existing mortgage, whether it’s a VA loan or not.
Homeowners with a VA loan can use the Interest Rate Reduction Refinancing Loan, or IRRRL, to easily drop their rate and payment without an appraisal, or even paystubs, W2s or bank statements. The VA streamline refinance, as it is commonly known, gives VA loan holders a faster, cheaper way to access lower refinance rates when rates fall.
Even homeowners without a VA loan can use a VA refinance. The VA cash-out loan is available to eligible Veterans who don’t have a VA loan currently. As its name suggests, a VA cash-out refinance can be used to turn your home’s equity into cash. You simply take out a bigger loan than what you currently owe. The difference is issued to you at closing.
The VA cash-out loan amount can be up to 100 percent of your home’s value in many cases. Use the proceeds for any purpose – home improvements, college tuition, or even a new car.Many homeowners today are dropping their rate and taking cash out simultaneously, accomplishing two goals at once.
But you don’t have to take out cash to use this VA loan option. You can also use it to pay off a non-VA loan. Eligible homeowners who pay mortgage insurance or are dealing with other undesirable loan characteristics should look into refinancing with a VA loan. It can eliminate PMI, get you into a stable fixed-rate loan, pay off a second mortgage, or simply reduce your rate to make homeownership more affordable.
8. Lenient guidelines for lower credit scores, bankruptcy, foreclosure
Unlike many loan programs, a lower credit score, bankruptcy or foreclosure does not disqualify you from a VA home loan.
Shop around at various lenders, because each will have its own stance on past credit issues. However, VA guidelines do not state a minimum credit score to qualify. This gives lenders leniency to approve loans with lower scores. In addition, VA considers your credit re-established when you have established two years of clean credit following a foreclosure or bankruptcy.
Many homeowners across the U.S., military and civilian, experience bankruptcies and foreclosures due to a loss of income, medical emergency or unforeseen event. Fortunately, these financial setbacks don’t permanently bar VA-eligible home buyers from ever owning again.
The exception, though, is a foreclosure involving a VA home loan. In this case, you may need to pay back the amount owed on the foreclosed VA loan to regain eligibility. But for most home buyers with past credit issues, a VA home loan could be their ticket to homeownership.
9. Funding fee waivers
VA typically charges a funding fee to defray the cost of the program and make home buying sustainable for future Veterans. The fee is between 0.50 percent and 3.3 percent of the loan amount, depending on service history and the loan type.
However, not everyone pays the VA funding fee. Disabled Veterans who are receiving compensation for a service-connected disability are exempt. Likewise, Veterans who are eligible for disability compensation, but are receiving retirement or active duty pay instead, are also exempt from the fee.
10. Buy a condo with a VA loan
You can buy many types of properties with a VA loan, including a single-family (free-standing) home, a home of up to four units, and even manufactured homes. But condominiums are commonly overlooked by VA home buyers.
Condominiums are ideal starter homes. Their price point is often lower than that of single-family homes. And, condos are often the only affordable option in many cities.
The VA maintains a list of approved condominium communities. Veterans can search by city, state, or even condominium name on VA’s condo search tool. It’s not a short list. For example, there are more than 2,400 approved condo communities in Washington State, about 1,000 in Texas, and a staggering 9,000 in California.
As a Veteran or Servicemember, consider the array of home types when shopping for a home.
11. There are more than 10 reasons to use a VA home loan
The preceding 10 facts are just a few, and there are actually many more reasons to use your VA loan benefit. You’ve certainly earned it.
The freedom afforded to this country by members of all branches of the military, past and present, is not easily repaid. But consider this program a small “thank you” for your service and dedication.
How to help your VA claim while waiting on the VA
Currently, the VA has a national backlog of about 3 years for appeals. That means that from the time a Veteran files an appeal to when the VA makes a decision on that appeal the Veteran will have waited for at least 2.5 to 3 years. Many Veterans find the long appeals process discouraging, but there is so much that a Veteran can do to support their claim(s) while waiting on the VA to get to their appeal.
The number one most advantageous thing that a Veteran can do to support their VA claim for disability benefits is to have continuous medical treatment. Many of our Veterans tell us that there is no point in going to see their doctor because they can’t do anything to help their disability. Even if that is true, your doctor will create a medical record related to that appointment; each appointment creates a bread crumb trail of medical records for the VA to follow. The more medical records to support your VA claim the better! The VA will not take your word that you are disabled, and they are not mind-readers; they need proof that your disabilities have continuously affected you. Whether or not your doctor actually does anything to help your disabilities, having a record of your visit establishes: that you are actively seeking treatment, the severity of your disability over time, and it could surprise you and lead to some relief from your disabilities!
Creating a paper trail
In addition to having continuous medical treatment…Veterans, please do not minimize your symptoms! If your doctor or therapist asks you how you’re doing, don’t say “fine” unless you’re actually fine because the doctor will put that you are fine in your medical records. Instead, tell them “I’ve been feeling really down lately,” or “the pain from my back has been really bad lately, and has been making it hard to sleep.” Doctors are there to help you, and if you speak honestly with them, the VA will see how severe your disabilities are in your medical records. Again, your doctors and the VA cannot read your mind. So, the more open and honest you are about your disabilities, the better you support your VA claim for disability benefits.
Another thing Veterans can do to help support their VA claim is to keep a log of how your disabilities are affecting you. Again, the VA needs documentation to prove the severity of your disabilities. If you have residuals from bladder cancer, keep a log of how frequently you urinate throughout the day and night. If you have migraine headaches, write down when you get a migraine, what your symptoms are, and how long the migraine lasts. If you have a mental health disorder, write down your symptoms and how they affect your daily life. If you find yourself having to leave work early due to your disabilities, keep track of when you had to leave early and what triggered your need to leave. It can be really difficult to establish exactly how severe your disabilities are, so providing the VA with a log of how your disabilities effect you could make a difference in rating.
Can I speed up my VA claim?
Lastly, many of our Veterans ask about expediting their VA claim with the VA. We know that many, many Veterans are not in a good place financially. However, the VA is extremely strict with what cases they will expedite. The only time that the VA will expedite a claim is if the Veteran is homeless, is facing foreclosure (documentation is needed to prove this), the Veteran has been diagnosed with a terminal illness, or the Veteran is 75 years or older. If you do not fit into one of those categories, then your case will not be expedited. However, if you follow the above suggestions to help support your claim, then you increase your likelihood of a grant when the VA finally does get to your appeal.
Out-of-state tuition rates? For qualifying Vets, there’s no such thing at this school — regardless of whether they have GI Bill benefits.
The University of Mississippi, known better to college sports fans as Ole Miss, encourages Veterans to attend with its Military Non-Resident Tuition Scholarship, which pays for the extra tuition that out-of-state students automatically incur.
This scholarship is also available to the spouses and children of Veterans if they meet certain requirements.
“It’s a big decision-maker for families when they’re deciding whether to go to Ole Miss or another school because a lot of schools don’t do this stuff,” said Andrew Newby, Ole Miss’ assistant director of Veteran and military services at its Center for Student Success & First-Year Experience.
Federal law requires public universities nationwide, Ole Miss included, to waive out-of-state tuition for qualifying GI Bill users and only charge them the in-state rate, which the Post-9/11 GI Bill fully covers. But this only applies under certain circumstances — Vets must be within three years of separation and meet other requirements. And when your GI Bill benefits are done, so is that out-of-state tuition waiver.
But at the University of Mississippi, once Veterans exhaust their Post-9/11 GI Bill benefits, they gain access to the non-resident scholarship to pay for the remainder of their out-of-state tuition costs. This covers the entire time they’re enrolled in any Ole Miss academic program. That can range from the start of their undergraduate careers to graduate degrees and even law school.
Veterans who begin their time at Ole Miss without education benefits are also immediately allowed to use the non-resident scholarship.
And you don’t even have to apply for it. Once Ole Miss receives a Veteran’s DD-214 form proving he or she has separated from the military, the school assesses the Veteran’s out-of-state status and applies the non-resident scholarship accordingly.
“The reason that it’s a big deal is that once you’ve exhausted your benefits and still find yourself in school, we’re going to cover your out-of-state costs anyway,” Newby said. “If you want an education from Ole Miss and you want an SEC college experience, we’re going to take care of you for as long as you’re in school.”
Spouses and children can also use this scholarship if their Veteran family member has shared or transferred at least one day of specified types of VA benefits with them. These dependents get their own non-resident scholarships and can use them at the same time as their parent or siblings.
Newby said there are about 1,000 students at Ole Miss using some form of Veterans’ benefits. He estimated that about 40 percent of those students came to Ole Miss from a different state and use the non-resident scholarship.
One such student is Winston Taylor, a 24-year-old junior from Prattville, Ala. The former Army cannon crewmember said the non-resident scholarship played a huge role in his decision to attend Ole Miss instead of the University of Alabama in his home state.
“When I found that out, it was great news,” he said. “That’s a huge financial difference.”
Taylor is currently thinking about going to law school. He called his time at Ole Miss a “great college experience” and said that the fact the non-resident scholarship is available to him as long as he continues school there is making it more likely he will stick around if he decides to pursue a law degree.
Navy Veteran Lauren Graham, 27, is currently an Ole Miss junior. She is originally from Fischer, Texas, but the non-resident scholarship sold her on being a Rebel.
“It allowed me to be able to actually go here,” she said.
Graham is the vice president of Ole Miss’ Student Veterans Association. She also used to work in the school’s Veteran and Military Services office and saw firsthand the elation Veterans feel when they realize that they no longer need to worry about paying that extra out-of-state tuition.
“When they find out they get it, you can see they’re so relieved and excited, because it takes this incredible burden off them,” she said.
Newby advised Veterans seeking a higher education to not just look at universities or other kinds of schools in their home state, which would be “doing yourself a disservice by limiting your options," he said.
He believes that Ole Miss’ non-resident scholarship unlocks a world of academic possibilities for Veterans.
“Southern hospitality is a real thing, and we have that at the University of Mississippi,” he said.
Maybe they had a terrible experience at the VA a long time ago.
Or possibly their service in the military — and the stress of combat — left them distrustful of the government and content to get by on their own health insurance. Maybe they just wanted to be left alone.
For Fairview resident Stephen Henderson, it was a little bit of "all of the above." A Marine Corps combat Veteran of the Vietnam War, Henderson, 69, did not use the local Charles George VA Medical Center and its many benefits for decades.
Henderson served in Vietnam from 1969-70, at one point badly wrenching his knee during a firefight. When he got home, he was told to go the VA in Asheville.
"I had some injuries and some health issues, and the military felt it should be looked into by the VA," Henderson said. "To me, though, it was in total disarray, and the treatment was subpar."
Henderson was sent to a VA in Winston-Salem, where he was not impressed with the facility or the care. So he stayed away.
Reaching out to the disaffected
It was an all-too-common story in those days, one that led a generation of Veterans to just skip the VA. But care and services have improved drastically over the years.
An upcoming "town hall" gathering for Veterans aims to help more aging Veterans take advantage of programs and benefits that are too often left untapped. Slated for April 27, the event is tilted "Aging Veteran: What Do You Need To Know Planning For The Future." Topics will include health care and the aging, survivors benefits programs, burials at state and national cemeteries, and a presentation on "Wills in North Carolina and what happens if you do not have one."
Buncombe County resident Allan Perkal, an Air Force medic in Vietnam and a retired VA counselor, will moderate the town hall. He knows Henderson and is glad to see his fellow Veteran finally engaged in the system.
Vietnam Veterans, Perkal said, are the lowest percentage cohort in terms of Veterans applying for disability.
"A high percentage of Veterans never seek any treatment or put in for any service-connected disability, and they're walking around with serious problems," Perkal said. "He's an example of one of us who served in Vietnam and went on with his life, and the VA wasn't really a part of his life. He kind of put that on a shelf, but later in life, things began to change and improve, and he began to embrace the system that had alienated us."
Perkal is also chair of the Buncombe County Veterans Council and on the board of directors of the Vietnam Veterans of America, North Carolina State Council. Those organizations are teaming up with the Charles George VA Medical Center for the event, which will take place at Asheville-Buncombe Technical Community College.
It is free and open to all Veterans — not just Vietnam era Vets — as well as family members, caregivers and others who work with aging Veterans. The information is just as vital for caregivers and loved ones, as some of them can also be entitled to some benefits after a Veteran dies, or find help is available in caring for an ailing Veteran.
A 'complete turnaround'
A self-described "workaholic" who spent a career in plant management, sales and then as a manager in the city of Asheville's sanitation department, Henderson always had good health insurance. So he felt no need for VA health care.
"Then about nine years ago, I was with some friends and they encouraged me to go, and I went back to the VA," Henderson said. "It was a complete turnaround at the VA. I was treated with ultimate respect."
The health care providers also pointed out some issues Henderson had that were service-related, meaning the treatment was covered. That included a heart condition related to Agent Orange exposure, PTSD and his knee condition, which ultimately will require a knee replacement.
He's gotten counseling for the post-traumatic stress disorder, which includes participation in a VA writing program, as well as treatment for the heart problem and high blood pressure.
"I stayed away from the VA for several years, but at this stage of my life, I think I need to know all I can, and so do potentially my caregivers and my (girlfriend)," Henderson said. "I think this forum should give a lot of information I don’t have and most Veterans do not have."
Henderson and Jenny Kline have been together nine years and have four children between them, so he knows more than just one person is affected by his health.
WNC's Veteran population is older
Armenthis Lester, spokeswoman for the Charles George VA, said the most common programs Veterans are not taking advantage of are health care, telemedicine and mental health. Charles George, in East Asheville, also operates three community-based outpatient clinics, in Franklin, Hickory and Rutherford County.
In all, Charles George serves 47,190 Veterans in 23 Western North Carolina counties, but overall some 96,000 Veterans live in WNC. Not all Veterans are eligible for VA health care, as there are enrollment requirements related to length of service, service connected conditions and income.
"There are some Veterans who are not eligible for VA health care because they make too much money," Lester said. "However, we feel there are Veterans who are eligible for VA service, but are not taking advantage of them."
Dr. Molly McGaughey, chief of geriatrics and extended care at Charles George, said 59% of Veterans using the facility in 2018 were 65 or older.
"In 2013 it was 50%," McGaughey said. "So we've had a 9% growth in just the geriatric Veterans population."
Since last October, Charles George has established four new programs in geriatrics to address that growth, which officials expect to continue with the aging of the Baby Boom generation, those born between 1946-64. The new programs include a geriatric primary care clinic and a palliative care program.
When the Vietnam Veterans Association and Buncombe County Veterans Council approached the VA about the town hall, the medical center jumped at the chance to participate.
"We're happy to be able to bring this information to people, because these are such essential services and they can make a huge difference about how somebody feels at the end stages of their life," McGaughey said.
She'll speak on "Healthcare and the Aging" at the town hall, mentioning a program called "Choosing Home" that can include home hospice care and nursing help that benefits Veterans and their caregivers. She'll also talk about the VA's respite program, which allows caregivers time away from their loved one who is ailing, a crucial service in preventing burnout, McGaughey said.
A changed culture
As far as why Veterans might not seek out service, Lester said the reasons run the gamut. But she also acknowledged that Vietnam Veterans in particular may have bad feelings about the VA and government in general.
"Some older Veterans — Vietnam Veterans — were so badly mistreated when they returned from Vietnam, that they have no desire to partner with any government agency," Lester said.
She also acknowledged, "Some Veterans have been turned off by news coverage of VA nationally and have lost trust."
Lester stressed that the local VA has scored extremely high in recent national rankings among VA's, including number two in quality and number one in customer service in the nation, and as the best place to work. Partly as a result, the the local VA draws Veterans from Tennessee, Georgia and other parts of North Carolina because of its reputation.
"There’s a culture gap that we're trying to bridge that the VA has changed," McGaughey said. "We want them to know the VA is here to help them and to be a partner in their care."
Lester said Veterans "give various reasons why they do not seek out services," including:
- Some Veterans feel that because they did not serve during a war or were never injured, they do not deserve services.
- Some Veterans are unaware of their eligibility.
Getting good mental and physical health care can add years to a Veteran's life, and improve the quality of life.
"I do not have any VA-specific data, but many other studies have demonstrated a positive correlation between longevity and well-being in those who have access to health care generally," Lester said.
Often, older Veterans find themselves isolated and without a good social network to rely on, Perkal said. While the town hall is open to all Veterans, the mountains have more Vietnam Veterans than other cohorts, in part because of the large number of personnel who served during the Vietnam era —about nine million personnel served during the war years, with about 3 million of those serving in country.
At its core, the town hall is about connecting with other Veterans, Perkal said, bringing back some of that in-service camaraderie. Other town halls have addressed Agent Orange exposure and PTSD, and this is another chance to get the word out about benefits.
"We’re trying to reach those folks about what's available and trying to connect with folks," Perkal said. "We want to get the community to come out, to rekindle that sense of brotherhood and sisterhood that exists among Veterans that used to exists and can exist again."
A 'final gift'
McGaughey knows the topics of aging and end of life decisions can be tough ones for Veterans. Or for anyone, for that matter.
"Our culture does not like talking about death and dying," McGaughey said. "I think it takes tremendous strength and courage to have those conversations ahead of time."
One topic she'll address is "the final gift" — providing your family specific details about your end of life care, advanced directives and burial so they're not adrift under stressful circumstances.
"Often we see this in hospice or in the ICU, where family members want to do everything possible (to keep a loved one alive), because they didn’t know what their father wanted," McGaughey said. "Many times, they're feeling guilty about not knowing. That’s why it’s a tremendous gift — the final gift — to say to your loved ones, 'This is what I want.’"
For his part, Henderson cannot recommend the local VA enough. When nightmares returned because of his PTSD, he was able to get treatment. A recent cataract surgery was 100% covered, and even included implants so he can read without glasses.
"I think the men and women that utilize it have considerable trust now," Henderson said. "But there are still so many people who do not utilize the VA because of the way they were treated in the early 70s, and they don’t realize how good it is now."
Forum for Aging Veterans
What: A free town hall gathering, "Aging Veteran: What Do You Need To Know Planning For The Future."
Organizers: Vietnam Veterans of America North Carolina State Council, Buncombe County Veterans Council, and Charles George VAMC
Where: A-B Tech Community College, Asheville Campus, Ferguson Auditorium, 19 Tech Drive (off Victoria Road) Asheville, NC.
When: 8:30 a.m.-1 p.m. April 27. Registration is at 8:30 a.m.
Who it's for: Veterans, family members, caregivers, and others who work with aging Veterans.
Goal: To educate the aging Veteran and their family members to what they need to know planning for the future. Making sure the Veteran gets the healthcare they need as they age, and become knowledgeable regarding what benefits their survivors are eligible for.
Contact: Allan Perkal 808-383-7877
- Dr. Molly McGaughey, VA Charles George, Gerontologist,
- "Healthcare and the Aging"
- Walt Ward, Buncombe County Veterans Service Officer, "Survivors' Benefit Programs"
- JD Whisnant, Superintendent, Black Mountain Veterans State Cemetery, "Burial at State and National Cemeteries"
- Attorney/Pisgah Legal Services, "Wills in North Carolina and What Happens If You Do Not Have One"
- Moderator: Allan Perkal, Chair, Buncombe County Veterans Council; Board of Directors, Vietnam Veterans of America, North Carolina State Council
Effective immediately, the health care selection period for retirement -- one of eight lifetime events considered by Tricare to be significant enough to warrant reconsideration of a beneficiary's health plan -- is now 365 days rather than the 90-day window for any other qualifying circumstance.
The change does not impact currently enrolled retirees, active-duty families, Tricare for Life users or other categories of beneficiaries.
The change was made, Defense Health Agency spokesman Kevin Dwyer explained, to ensure that a service member's retirement status has been recorded in the Defense Enrollment Eligibility Reporting System before they select their health coverage.
"We extended it to 365 days to account for the gap in time it sometimes takes for the services to update sponsors' statuses in DEERS," Dwyer said in an email to Military.com on Monday.
As retirement approaches, retirees can't enroll in a new health program until their actual retirement date, when their active-duty Tricare Prime coverage expires. After retirement, they can choose to remain in Tricare Prime or Tricare Select. Retirees and family members on Tricare Prime pay enrollment fees; most using Tricare Select do not.
Coverage is backdated to the retirement date, according to Tricare. They pay back their enrollment fees to the date of retirement.
While the new retiree or family member is deciding which program to choose, they are eligible to be seen at a military treatment facility. This eligibility lasts the full 365 days. After that, they will not be able to enroll in Tricare until a life qualifying event or open season.
"The Defense Health Agency recognizes that it sometimes takes time for the services to update sponsors' statuses from active duty to retired in DEERS," Dwyer said.
In addition to retirement, changes in family makeup, such as divorce, retirement, death or childbirth; a move; loss of eligibility or change in eligibility status; or a Defense Department-directed change or change in overseas command sponsorship are considered qualifying life events, or QLE. Pregnancy is not considered a QLE.
Tricare beneficiaries who want to change health programs outside a QLE must wait until open enrollment season, which will be Nov. 11 to Dec. 9 this year.
The federal government spends billions of dollars on tuition benefits for men and women who serve in the U.S. military, but some colleges that rely on that money use very little of it to educate Veterans, according to a study released Thursday.
Using the latest data from the U.S. Education Department, advocacy group Veterans Education Success found seven of the 10 colleges receiving the most from GI Bill benefits spent less than one-third of tuition and fees on academic instruction in 2017.
Spending on instruction often correlates with the likelihood of students earning a degree and finding meaningful employment, according to the report. Research has shown that even students who enter school unprepared for the rigors of higher education have a better chance of graduating from institutions that allocate a hefty portion of tuition dollars to teaching.
From fiscal 2009 to 2017, the Department of Veterans Affairs committed nearly $35 billion in Post-9/11 GI Bill tuition payments to colleges and universities nationally.
Ten schools alone received a total of $5.4 billion in GI Bill payments, with the University of Phoenix and DeVry and Strayer universities receiving the most. The top three recipients spent just 11 percent to 15 percent of gross tuition revenue on educating students, the study found. None of the schools immediately responded to requests for comment.
The report does not explain where schools are spending tuition dollars that are not allocated for instruction. The Education Department tracks and reports college expenditures in several categories, including instruction, academic support and student services. While academic support could include items such as curriculum development, it can also include the cost of operating galleries on campus. That’s why the advocacy group zeroed in on the instruction category.
Although for-profit colleges dominated the ranks of schools spending the least on instruction, University of Maryland University College rounded out the list of institutions that earmarked less than 33 percent of tuition dollars for teaching.
The public college, which received more than $63 million in GI Bill funding in fiscal 2017, primarily serves students online. That lowers the cost of delivering instruction, which in turn would lower instructional spending. But the study argues that what U-Md. University College saves on instruction should be passed on to students through lower tuition.
U-Md. University College spokesman Robert Ludwig argues that the school offers the second lowest tuition and fees of any institution in the University System of Maryland, charging a little over $6,000 a year for in-state Veterans pursuing a bachelor’s degree. He notes the college partners with Veterans Affairs to split the difference between in-state and out-of-state tuition.
Of the top 10 recipients of GI Bill benefits, Pennsylvania State University spent the largest proportion of gross tuition revenue — more than 70 percent — on instructional expenses. Embry-Riddle Aeronautical University (41.4 percent) and for-profit ECPI University (38.3 percent) followed.
At the opposite end of the spectrum, Colorado Technical University allocated only 8.2 percent of its gross tuition revenue toward academic instruction in 2017. That same year, the for-profit school’s owner, Career Education Corp., dedicated more than 37 percent of revenue to recruiting and marketing, according to a securities filing.
“We believe few in Congress would be comfortable with colleges that are diverting 90 percent of GI Bill funds away from Veterans and toward TV ads and call centers that 48 states plus the District of Columbia deemed predatory and misleading,” said Carrie Wofford, president of Veterans Education Success.
Many of the same schools that derived the most in GI Bill benefits and spent the least on instruction graduated fewer than 30 percent of their students within eight years, including U-Md. University College, Strayer and DeVry. Conversely, the GI Bill recipients that allocated the most money toward teaching had the highest completion rates, according to the study.
Ludwig at U-Md. University College said the graduation rate is a bit misleading because the students the college serves often transfer in and out of the school, but Education Department data the report used does not include the completion rate for those type of students.
“For our students, their experience through higher education is not as linear as it is for transfers to traditional institutions,” Ludwig said. “Many of our students do not intend to get a degree from us. Rather, they may take a course or two while serving in the military; or get a requisite out of the way that is not available to them on their home campus.”
Veterans Education Success identified 378 colleges and universities that spend at least 50 percent of tuition dollars on instruction and graduate at least half of their students, earning them a spot on the advocacy group’s list of Best Bang for the GI Bill Buck. The group examined more than 4,600 schools.
According to the report, many colleges serving large numbers of Veterans actually spend more on education than they charge in tuition and deliver high graduation rates. Those schools include Lakeshore Technical College, SUNY Polytechnic Institute, Bismarck State College, Yale University and Stanford University.