H.R. 2723 — VA Home Loan GRACE Act of 2025

This section revises the Department of Veterans Affairs (VA) home loan guaranty program's maximum guaranty amounts and entitlement table (38 U.S.C. 3703(a)(1)) to distinguish between covered veterans (i.e., as defined elsewhere in the bill) and other veterans, with covered veteran entitlements generally set at 50% of the Freddie Mac conforming loan limit (reduced by any unreinstated amount) for loans closed before April 7, 2031 and 25% thereafter (from prior fixed amounts such as $36,000), as follows: (1) for loans of $45,000 or less, a 50% maximum guaranty; (2) for loans over $45,000 but not more than $56,250, a $22,500 maximum guaranty; (3) for other loans over $56,250 (except as below), the lesser of $36,000 or 40% of the loan amount as maximum guaranty; and (4) for loans over $144,000 for specified purposes (e.g., purchase, construction, refinance under 38 U.S.C. 3710(a)(1)-(3),(5),(6),(8)), a 25% maximum guaranty. The section further modifies rules for joint veteran loans to cap the guaranty at the lesser of the applicable maximum or the sum of each veteran's entitlement (with an exception capping certain large joint loans involving covered veterans at 25% of the loan or Freddie Mac limit); adds a civil penalty of up to $23,607 for knowing material false certifications related to loan eligibility (38 U.S.C. 3704(c)); and extends applicability of the loan fee table through April 7, 2031 (from April 7, 2023) (38 U.S.C. 3729(b)(2)). The changes take effect 180 days after enactment. (Thus, the revisions expand guaranty coverage for covered veterans on larger loans while preserving fixed entitlements for non-covered veterans and limiting joint loan risks.)