H.R. 6047, Sharri Briley and Eric Edmundson Veterans Benefits Expansion Act of 2026

Bill Summary

H.R. 6047 would increase benefits paid by the Department of Veterans Affairs (VA) by providing a cost-of-living adjustment (COLA) for dependency and indemnity compensation (DIC) and by creating a new monthly benefit for certain disabled veterans. The bill also would increase the rate for fees that VA charges borrowers for home loan guarantees and expand eligibility for such guarantees to certain members of the military reserves. Finally, the bill would extend a temporary limitation on certain pension payments through September 30, 2036.

Estimated Federal Cost

The estimated budgetary effects of H.R. 6047 are shown in Table 1. The costs of the legislation fall within budget functions 370 (commerce and housing credit), 550 (health), and 700 (veterans benefits and services).

Basis of Estimate

For this estimate, CBO assumes that the legislation will be enacted in fiscal year 2026 andthat outlayswill follow historical spending patterns for the affected programs.

Direct Spending

Enacting the changes to disability benefits, loan guarantees, and pensions would reduce net direct spending by $42 million over the 2026-2036 period, CBO estimates (see Table 2).

Dependency and Indemnity Compensation. H.R. 6047 would provide two COLAs to dependency and indemnity compensation, a benefit paid to certain surviving dependents of veterans who die from service-connected disabilities or who die after being rated totally disabled by VA for at least 10 years prior to death. The first increase would be 1 percentage point more than the COLA that Social Security recipients will receive in December 2026. The second increase would be 0.5 percentage points more than the adjustment that will occur in December 2027. Section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985 requires that CBO’s baseline projections incorporate the assumption that Social Security COLAs will be provided to DIC beneficiaries; thus, this estimate accounts for the differences between the increases specified in the bill and the Social Security COLAs projected in CBO’s February 2026 baseline. The adjustments would increase the average monthly DIC payment for nearly 600,000 recipients by about $23 in calendar year 2027 and by about $34 in calendar year 2028; by 2036, the average monthly payment for nearly 800,000 recipients would be about $42 greater. In total, CBO estimates that enacting the provision would increase outlays for DIC by $3 billion over the 2026‑2036 period.

Additional Disability Compensation. H.R. 6047 would create a new monthly benefit for disabled veterans who receive a monthly aid and attendance allowance from VA. That allowance is paid to disabled veterans who meet additional criteria, such as requiring assistance to perform daily activities. CBO estimates that about 8,000 veterans currently receive aid and attendance allowances and that, by 2036, that number will increase to about 10,000. The new benefit would be $833 per month, and payments would begin in December 2026; after future COLAs, CBO estimates that the benefit amount would increase to $1,026 per month in 2036. In total, CBO estimates that enacting the provision would increase outlays for disability compensation by $1 billion over the 2026-2036 period.

Home Loan Fees. H.R. 6047 would make two changes to the fees that VA charges borrowers for its loan guarantees.

First, the bill would extend, for almost 28 months, the current rates for loan guarantees. VA provides loan guarantees to lenders that allow eligible borrowers to obtain better loan terms—such as lower interest rates or smaller down payments—to purchase, construct, improve, or refinance a home. VA typically pays lenders up to 25 percent of the outstanding mortgage balance if a borrower’s home is foreclosed upon. Those payments, net of fees paid by borrowers and recoveries by lenders, constitute the subsidy cost for the loan guarantees.^[1]

CBO’s baseline projects that, on average, VA will annually guarantee around 600,000 loans of roughly $490,000 each at a subsidy rate of 0.93 percent and that those loan guarantees will cost $27.5 billion over the 2026-2036 period. Under current law, the rates for most of the fees that borrowers currently pay average about 2.3 percent of their loan amount; for loans guaranteed after June 9, 2034, those rates will drop to about 1.2 percent of the loan amount. H.R. 6047 would extend the higher rates through September 30, 2036, which would reduce the subsidy cost of loans guaranteed during that period.

Second, the bill would increase the fees that VA charges borrowers for certain refinancing loans and people who take over—that is, assume—existing VA-guaranteed loans from a seller. Under current law, the rate is 0.5 percent of the amount loaned or assumed. The bill would increase those rates to 1.4 percent for refinancing loans and 1.0 percent for loan assumptions. Those rate increases would decrease the subsidy cost of the loans, which would reduce direct spending.

Using its forecast of loan volume based on data provided by VA, CBO estimates that extending and increasing the fee rates as specified in the bill would decrease net direct spending by $4 billion over the 2026‑2036 period.

Home Loans for Reserve Duty. H.R. 6047 would count specified reserve-component duty as active duty when calculating eligibility for home loans guaranteed by VA. That duty would include basic or initial training and other types of training, such as the two weeks of annual training and monthly weekend drills that are required for nearly all members of the military’s reserve component (which consists of the federal reserves and the National Guard). Currently, reservists must serve at least six years in the Selected Reserve or 90 days on active or full-time National Guard duty to be eligible for the loan-guarantee benefit. Counting the time spent on training duties toward the active-duty requirement, as specified in H.R. 6047, would increase the number of people who would obtain a VA-guaranteed home loan.

The bill also would grant eligibility for VA loan guarantees to reservists after 14 days of active-duty service. Under current law, reservists must serve 90 days on active duty to be eligible for VA loan guarantees. Reservists who become eligible because of that change would be charged an additional 1 percent fee for a loan guarantee; however, because the bill would count reserve training duty as active duty, CBO expects that most reservists would meet the current 90‑day criteria during their first year of service and thus avoid paying that additional fee.

Using data from VA on the veteran population and loan guarantees and from the Department of Defense on military separations, CBO estimates that about 1,600 reservists would obtain VA-guaranteed home loans each year at an average amount of $475,000. Of those borrowers, 300 would obtain a VA-guaranteed loan because of the bill, and 1,300 would have otherwise obtained a loan guaranteed or securitized by other federal programs under current law. Those changes in loan activity would reduce direct spending by $63 million over the 2026- 2036 period. Those changes also would affect spending for programs managed by the Department of Housing and Urban Development; the budgetary effects of those programs are discussed under “Spending Subject to Appropriation.”

VA Home Loans. CBO estimates that the home loans guaranteed by VA under the bill would have an average subsidy rate of -0.6 percent and that those loans would decrease direct spending by $48 million over the 2026-2036 period.

Government-Sponsored Enterprises (GSEs). Fannie Mae and Freddie Mac are GSEs whose operations CBO treats as part of the federal budget in its baseline projections.[2] CBO estimates the cost of the GSEs’ guarantees of mortgage-backed securities on a fair‑value basis, rather than on a cash basis or using the process specified in the Federal Credit Reform Act of 1990. The fair value of a loan guarantee is the market price that a private-sector financial institution would charge to assume the guarantee.

On a fair-value basis, CBO estimates that the guarantees issued by the GSEs under current law have an average subsidy rate of 0.56 percent over the 2026-2036 period. CBO estimates that the increase in VA-guaranteed loans made under the bill would reduce the number of loans backed by the GSEs annually by about 500 and decrease annual volume by $250 million, and thus would reduce direct spending by $15 million over the 2026-2036 period.

Pensions and Medicaid. Under current law, VA reduces pension payments to veterans and survivors who reside in Medicaid nursing homes to $90 per month. That required reduction expires January 31, 2033. H.R. 6047 would extend that reduction for 44 months, through September 30, 2036. CBO estimates that extending that requirement would reduce VA benefits by $2 million per month. As a result of that reduction in beneficiaries’ income, Medicaid would pay more of the cost of their care, increasing spending for that program by $1 million per month. Thus, enacting the provision would reduce net direct spending by $44 million over the 2026-2036 period.

Spending Subject to Appropriation

Costs for federal loan guarantees issued by the Federal Housing Administration (FHA) and securities guaranteed by Ginnie Mae, both managed by the Department of Housing and Urban Development, are recorded in the budget as discretionary spending. Because of the increase in VA loan guarantees discussed under “Home Loans for Reserve Duty,” CBO expects changes in the number of guarantees made by FHA and Ginnie Mae and estimates that implementing H.R. 6047 would, on net, increase spending subject to appropriation by $65 million over the 2026-2036 period, assuming appropriation actions consistent with that estimate (see Table 1).

Federal Housing Administration. In CBO’s estimation, the present value of federal receipts from FHA’s housing loan guarantee program exceeds the present value of payments made by the federal government to mortgage lenders; thus, those loans have a negative subsidy rate. That negative subsidy is classified in the budget as offsetting collections that reduce spending subject to appropriation. CBO estimates that the increase in VA-guaranteed loans under H.R. 6047 would, on average, reduce the number of loans that FHA guarantees annually by about 800 and decrease annual volume by $375 million over the 2026-2036 period. The loss of the negative subsidy from those loans would increase spending subject to appropriation for FHA by $75 million over the 2026-2036 period.

Ginnie Mae. Ginnie Mae is a federal government corporation that guarantees securities backed mostly by single-family mortgages originated through FHA, the Rural Housing Service, and VA. As the number of VA loans increases under the bill, by an average of 800 loans annually, Ginnie Mae’s volume also increases. In CBO’s estimation, Ginnie Mae’s mortgage-backed securities have a negative subsidy rate. As with FHA, that negative subsidy is classified in the budget as offsetting collections that reduce spending subject to appropriation. CBO estimates that the increase in VA-guaranteed loans would increase the volume of mortgage-backed securities guaranteed by Ginnie Mae by $400 million annually over the 2026-2036 period. On that basis, CBO estimates that implementing the bill would decrease spending subject to appropriation for Ginnie Mae by $10 million over that same period.

Uncertainty

CBO’s estimate for H.R. 6047 is subject to uncertainty. In particular, the changes in the number of home loans for reservists that would be guaranteed by FHA, Ginnie Mae, the GSEs, and VA could be higher or lower than we project. To the extent that those changes differ from CBO’s estimates, subsidy costs could be higher or lower than those estimated.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in Table 3.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 6047 would increase net direct spending by more than $2.5 billion in each of the four consecutive 10-year periods beginning in 2037.

CBO estimates that enacting H.R. 6047 would increase on‑budget deficits by more than $5 billion in each of the four consecutive 10-year periods beginning in 2037.

Mandates

The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

Estimate Prepared By

Federal Costs: 
Julia Aman (for the Department of Housing and Urban Development) 
Paul B.A. Holland (for the Department of Veterans Affairs’ home loans)
Zunara Naeem (for government-sponsored enterprises) 
David Rafferty (for disability compensation) 
Logan Smith (for disability compensation)

Mandates: Brandon Lever

Estimate Reviewed By

Justin Humphrey
Chief, Finance, Housing, and Education Cost Estimates Unit

David Newman
Chief, Defense, International Affairs, and Veterans’ Affairs Cost Estimates Unit

Kathleen FitzGerald
Chief, Public and Private Mandates Unit

Christina Hawley Anthony
Deputy Director of Budget Analysis

Estimate Approved By