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    New Mortgage Disclosures Could Help Veterans Compare FHA and VA Loans

    Updated: July 15 2026 • 6 min read
    Written by Bennett Leckrone
    Bennett Leckrone

    Written by
    Bennett Leckrone
    Writer / Reviewer / Expert

    Bennett Leckrone is the editorial manager and an analyst for Lower. He specializes in making complicated mortgage topics accessible for consumers. That includes both in-depth product guides and analysis on what economic moves mean for homebuyers and refinancers. He is also a licensed loan officer in Ohio, NMLS ID 2782574. He was previously a business reporter with a focus on higher education and fintech at BestColleges. In that role, he reported on the development of fintech and AI curriculum, as well as the rapidly changing nature of finance education. He also wrote guides to help business students navigate AI and online education. He also reported on state politics at Maryland Matters, with a focus on how policy affected people and businesses. He holds a bachelor of science in journalism degree from Ohio University.
    Reviewed by Neel Patel
    Neel Patel

    Reviewed by
    Neel Patel
    Reviewer

    Neel Patel is a mortgage industry professional with more than a decade of hands-on experience across loan origination, customer experience, sales operations, and strategy. He has worked at every stage of the mortgage lifecycle, from advising individual borrowers to leading teams of loan officers. As an expert reviewer, Neel evaluates mortgage and personal finance content for accuracy, clarity, and real-world applicability. He specializes in ensuring information reflects how lending actually works in practice so consumers can make confident, informed decisions.
    Our Editorial Standards

    Key Takeaways

    • The 21st Century ROAD to Housing Act requires a standardized military service question and VA eligibility notice on the Uniform Residential Loan Application.
    • The law also expands the FHA Informed Consumer Choice Disclosure so its cost comparison includes VA financing based on prevailing interest rates.
    • The new question and disclosure will not establish VA eligibility or prove that a VA loan is the less expensive option. Veterans will still need to compare actual loan terms and document their eligibility.
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    The 21st Century ROAD to Housing Act became law on July 11, 2026. Two of its provisions are intended to help lenders identify potential VA borrowers earlier and give some veterans considering FHA financing more information about VA loan costs.

    The changes could be useful for eligible borrowers who begin the mortgage process without realizing that their military service may qualify them for a VA-backed loan. However, the law does not change VA eligibility standards, guarantee approval or establish that VA financing will cost less than FHA financing.

    Implementation will take time. The Federal Housing Finance Agency has six months from enactment to carry out the mortgage application changes. The law does not give HUD a separate deadline for updating the FHA comparison disclosure.

    ROAD Act VA Loan Disclosure Basics

    Provision Required Change Implementation Borrower Impact
    Military service question Add a standardized question with “Yes,” “No” and “Prefer Not to Answer” options above the signature line of the Uniform Residential Loan Application. FHFA must issue a rule within six months of enactment. Potential VA eligibility may be identified earlier in the application process.
    VA eligibility notice Place a notice below the military service question stating that a borrower who answers yes may qualify for a VA home loan and should consult the lender about eligibility. FHFA must require Fannie Mae and Freddie Mac to add the notice within six months of enactment. The notice directs borrowers to consider VA financing without representing that they qualify.
    FHA and VA cost comparison Expand the FHA Informed Consumer Choice Disclosure so the comparison includes VA financing using prevailing interest rates. HUD will need to incorporate the statutory change into its disclosure requirements or model documents. The law does not specify a separate deadline. Some veterans considering FHA financing may receive a clearer comparison with VA loan costs.

    A Standardized Military Service Question and VA Notice Will Appear on the Application

    The Uniform Residential Loan Application, commonly called the URLA, is the standardized application maintained by Fannie Mae and Freddie Mac. Lenders use it to collect information about a borrower’s income, assets, debts, employment, property and proposed loan.

    The current URLA already includes a section about military service. The ROAD Act goes further by directing FHFA to require a standardized question with three response options: “Yes,” “No” and “Prefer Not to Answer.” The question must appear above the borrower’s signature line.

    The form must also state that a borrower who answers yes may qualify for a VA home loan and should consult the lender about eligibility. FHFA must carry out these changes within six months of the law’s enactment.

    The question is intended to prompt a review of VA eligibility before the borrower reaches closing. It does not establish eligibility by itself. A borrower generally needs a valid Certificate of Eligibility based on qualifying service or status and must also meet the lender’s credit, income and occupancy requirements.

    The law also requires the Government Accountability Office to study whether lenders using the URLA have added the required VA notice. That report is due within 18 months of enactment.

    FHA Disclosures Will Include VA Comparison Information

    HUD currently requires an Informed Consumer Choice Disclosure when a prospective FHA borrower may also qualify for a similar conventional mortgage offered by the lender. The model notice compares representative costs such as the loan amount, down payment, interest rate, principal-and-interest payment and mortgage insurance.

    The ROAD Act changes the underlying law so this comparison also accounts for a VA-backed loan using prevailing interest rates. It also states that the lender is not required to determine whether the prospective borrower qualifies for the VA loan shown in the notice.

    The enacted text adds VA financing to the cost comparison. It does not prescribe a complete FHA-versus-VA program guide. HUD will determine how the revised disclosure is formatted and which existing comparison fields need to change.

    A useful comparison should allow borrowers to evaluate the down payment, financed upfront charges, monthly mortgage insurance, VA funding fee, loan amount and monthly payment. Borrowers may still need separate explanations of VA entitlement, funding-fee exemptions, appraisal requirements and co-borrower rules because those issues are not fully captured by a payment comparison.

    VA and FHA Loans Are Not Interchangeable

    VA and FHA loans are both government-backed mortgage options, but they have different eligibility rules, costs and program requirements.

    Comparison Point VA Loan FHA Loan
    Basic eligibility Limited to eligible veterans, service members and certain surviving spouses who can obtain a Certificate of Eligibility. Available to borrowers who meet FHA and lender requirements. Military service is not required.
    Down payment The VA generally does not require a down payment when the borrower has sufficient entitlement and the purchase price does not exceed the appraised value. A lender or transaction may still require one. The minimum down payment can be3.5% for a qualifying purchase loan.
    Upfront program charge Most borrowers pay a one-time VA funding fee. The amount depends on the loan type, down payment and whether the benefit has been used before. Some borrowers are exempt. Most FHA purchase loans include an upfront mortgage insurance premium, which is commonly financed into the loan amount.
    Ongoing mortgage insurance The VA does not require monthly mortgage insurance. FHA loans generally include an annual mortgage insurance premium paid in monthly installments. The payment period depends on the original loan-to-value ratio and loan term.
    Entitlement The Certificate of Eligibility shows the borrower’s available entitlement. Existing VA loans or unresolved entitlement can affect the structure of a new VA loan. FHA financing does not use VA entitlement.
    Property review A VA appraisal addresses value and VA minimum property requirements. An FHA appraisal addresses value and FHA property acceptability requirements.
    Interest rate and lender pricing Rates, discount points and lender credits vary by lender and borrower profile. Rates, discount points and lender credits vary by lender and borrower profile.

    A VA loan is not automatically less expensive. Total cost depends on whether the borrower is exempt from the VA funding fee, the down payment, credit profile, loan amount, mortgage insurance duration, interest rate, discount points, lender credits, seller concessions and lender pricing.

    For example, a funding-fee-exempt veteran may find that VA financing has a lower upfront and monthly cost than FHA financing. Another borrower may receive different interest rates or lender credits that narrow the difference. The comparison must use the borrower’s actual terms rather than general program features alone.

    Why a Veteran Might Still Consider FHA Financing

    VA Eligibility Has Not Been Confirmed

    Military service does not automatically establish VA loan eligibility. A borrower whose service history cannot be verified or who cannot obtain a Certificate of Eligibility may need to consider another loan type.

    Available Entitlement Changes the VA Loan Structure

    A borrower with an existing VA loan may have only partial entitlement available. A new VA loan may still be possible, but the available guaranty and required down payment can differ from a transaction using full entitlement.

    The Property or Transaction Fits FHA Requirements Differently

    VA and FHA programs have separate appraisal, property and transaction rules. The condition of the home, condominium status, occupancy plan or other transaction details may affect which program can be completed.

    The Co-Borrower Structure Is Different

    A standard VA loan involving a veteran and spouse is structured differently from a joint loan involving a veteran and a non-spouse who is not using VA entitlement. FHA financing may treat the proposed co-borrower arrangement differently, subject to FHA occupancy and underwriting rules.

    The Actual FHA Offer Has Different Pricing

    Loan type alone does not determine the interest rate or closing costs. A veteran may receive different rates, points or lender credits for FHA and VA financing. Those differences should be evaluated alongside mortgage insurance and the VA funding fee.

    How Veterans Can Compare FHA and VA Offers

    The clearest comparison uses Loan Estimates prepared for the same property, loan amount, down payment, rate-lock period and general pricing structure. The Loan Estimate provides standardized information that allows borrowers to compare offers.

    Loan Estimate Item What to Compare
    Interest rate Confirm whether the rate is locked and whether discount points or lender credits are included.
    Annual percentage rate Use the APR as one measure of interest and certain loan costs. Do not use it as the only comparison.
    Cash to close Compare the down payment, closing costs, credits, deposits and seller-paid amounts.
    Monthly principal and interest Compare the payment generated by the rate and financed loan amount.
    Mortgage insurance Identify the FHA monthly mortgage insurance amount and how long it is scheduled to remain.
    VA funding fee Confirm the fee rate, exemption status and whether the fee is paid at closing or financed.
    Total loan amount Check how financed upfront charges affect the starting balance.
    Five-year cost Page 3 shows the total paid over five years and the principal paid during that period. This can help compare loans when the borrower expects to sell or refinance before the full term ends.

    A fair comparison also uses the same assumptions. Comparing an FHA quote with points against a VA quote with lender credits can make the results misleading unless those pricing differences are identified.

    The Bottom Line

    The ROAD Act creates two opportunities to identify potential VA borrowers earlier. The mortgage application will include a standardized military service question and VA notice, while the FHA consumer disclosure will add VA financing to its cost comparison.

    These changes provide information rather than an eligibility decision or loan recommendation. A veteran may qualify for VA financing and still choose FHA financing based on entitlement, property details, borrower structure or actual lender pricing. The final decision should be based on verified eligibility and comparable Loan Estimates.

    Frequently Asked Questions

    Does Military Service Automatically Qualify Someone for a VA Loan?

    No. VA eligibility depends on service history, duty status or qualifying surviving-spouse status. A Certificate of Eligibility confirms that the borrower meets the service-related requirement. The borrower must also meet the lender’s credit, income and occupancy standards.

    Can a Veteran Choose an FHA Loan Instead?

    Yes. VA eligibility does not require a borrower to use a VA loan. A veteran who qualifies for FHA financing may choose it after comparing the loan terms, upfront costs, monthly payment and transaction requirements.

    What Is the VA Funding Fee?

    The VA funding fee is a one-time charge on many VA-backed and VA direct loans. The amount depends on the loan type, down payment and prior use of the benefit. Certain borrowers are exempt. The fee can generally be paid at closing or financed into the loan.

    Does the ROAD Act Change VA Loan Eligibility?

    No. The law changes mortgage application and disclosure requirements. It does not revise the service, status, Certificate of Eligibility, credit, income or occupancy rules used to qualify for a VA-backed loan.

    When Will the New Disclosures Appear?

    FHFA must carry out the Uniform Residential Loan Application changes within six months of the law’s July 11, 2026, enactment. The law does not set a separate deadline for HUD to revise the FHA Informed Consumer Choice Disclosure. As of July 15, 2026, the current HUD model notice still compares FHA and conventional financing and does not include a VA column.

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