H.R. 2283, Recognizing Community Organizations for Veteran Engagement and Recovery Act

Bill Summary

H.R. 2283 would require the Department of Veterans Affairs (VA) to establish a three-year pilot program to provide grants to eligible providers of outpatient mental health care that serve veterans. The bill also would extend certain VA housing loan fees through July 24, 2034.

Estimated Federal Cost

The estimated budgetary effects of H.R. 2283 are shown in Table 1. The costs of the legislation fall within budget function 700 (veterans benefits and services).

Basis of Estimate

For this estimate, CBO assumes that H.R. 2283 will be enacted in fiscal year 2026, that VA will begin awarding grants under the pilot program in 2027, and that outlays will follow historical spending patterns for affected programs.

Provisions That Affect Direct Spending and Spending Subject to Appropriation

H.R. 2283 would establish a three-year pilot program under which VA would provide grants to mental health care providers who serve veterans in outpatient settings. Grant recipients could use those funds to support outreach, care coordination, clinician training, program implementation and evaluation, and other related activities. The bill would authorize the appropriation of $20 million annually for fiscal years 2027 through 2029 to carry out the pilot program.

CBO expects that VA would spend the authorized amounts over the 2027-2029 period. Using historical spending patterns for similar VA grant programs, CBO estimates that implementing the pilot program would cost $60 million over the 2026-2036 period.

VA uses several appropriation accounts to pay for the costs of health care, disability claims processing, medical research, and information technology modernization. One of those accounts, the Toxic Exposures Fund (TEF), is a mandatory appropriation that can be used to pay for some of the costs of those activities if they support veterans who were exposed to toxic substances or environmental hazards.^[1] The other accounts are discretionary appropriations. H.R. 2283 would affect health care that benefits veterans with and without toxic exposures; therefore, enacting the bill would increase direct spending from the TEF as well as spending subject to appropriation. CBO allocates the estimated costs of legislation between the TEF and the discretionary appropriation accounts on the basis of the portion of all funding for those activities that are projected, in CBO’s baseline, to come from the TEF.

On that basis, CBO estimates that over the 2026-2036 period, implementing the pilot grant program under H.R. 2283 would increase direct spending by $21 million and spending subject to appropriation by $39 million.

Direct Spending

In total, CBO estimates that enacting H.R. 2283 would decrease net direct spending by $58 million over the 2026-2036 period (see Table 2).

The discussion under “Provisions That Affect Direct Spending and Spending Subject to Appropriation” describes the costs of implementing the pilot grant program for providers of outpatient mental health care. Those changes would increase direct spending by $21 million over the 2026-2036 period.

In addition, H.R. 2283 would reduce direct spending by $79 million by extending higher fees for VA home loan guarantees. The bill would extend—for about seven weeks—the higher fees that VA charges borrowers for its 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.^[2]

CBO 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 are projected to 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. The bill would extend the higher rates through July 24, 2034, which would reduce the subsidy cost of loans guaranteed during that period, thereby decreasing direct spending.

Using its forecast of loan volume based on data provided by VA, CBO estimates that extending the higher fee rates as specified in the bill would decrease net direct spending by $79 million over the 2026‑2036 period.

Spending Subject to Appropriation

In addition to authorizing appropriations for grants to outpatient mental health providers, the bill also would require VA to report to the Congress on the outcomes and effectiveness of the pilot program. On the basis of the costs of similar reporting requirements, CBO estimates that satisfying that requirement would cost less than $500,000 over the 2026-2036 period.

CBO estimates that, in total, implementing H.R. 2283 would increase spending subject to appropriation by $39 million over the 2026-2036 period.

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 direct spending outlays that are subject to those pay-as-you-go procedures are shown in Table 1.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 2283 would not increase net direct spending or on‑budget deficits in any 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:

Noah Callahan (for veterans’ health care)

Paul Holland (for veterans’ home loans)
Mandates: Brandon Lever

Estimate Reviewed By

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