New VALID Act Requires FHA Lenders to Disclose VA Loan Options, Adds Military Service Question to All Mortgage Applications

The new VA Loan Informed Disclosure Act of 2025 (VALID Act) tackles a common issue in home buying: making sure veterans and active military members know about the loan benefits they’ve earned. Simply put, this bill forces lenders to be more transparent about VA loan options right from the start, particularly when someone is applying for a standard Federal Housing Administration (FHA) loan.

The Fine Print: Comparing VA vs. FHA

Section 2 of the VALID Act requires that when a lender hands out the required FHA loan disclosure form, they must include a comparison chart showing what the mortgage terms would look like if the borrower opted for a VA-guaranteed loan instead. This comparison has to use prevailing market interest rates at the time. This is a big deal because VA loans often offer significant advantages, like zero down payment and no requirement for private mortgage insurance (PMI)—benefits that can save a borrower tens of thousands of dollars over the life of a loan.

Crucially, the bill clarifies that the FHA lender doesn't have to check if you actually qualify for the VA loan. They just have to provide the comparative numbers. Think of it like a nutritional label: they’re giving you the facts on Option A (FHA) and Option B (VA) so you can make an informed choice, even if you still need to go elsewhere to confirm you can eat Option B.

The New Question on the Application

Section 3 focuses on standardizing the application process across the board. It mandates that the Director of the Federal Housing Finance Agency (FHFA) update the Uniform Residential Loan Application—the standard form used for most mortgages—to include a specific question about military service. This question must be placed conspicuously right above the signature line.

The FHFA has a tight six-month deadline to make this change and issue the rule guiding its implementation. For everyday people, this means that every time you fill out a standard mortgage application, the lender will be prompted to ask if you have military service, making it much harder for eligible veterans to accidentally overlook their benefits.

What This Means for Your Wallet and Your Time

For veterans and active service members, this is a clear win for consumer choice. Right now, if you walk into a lender focused on FHA loans, you might not hear about the superior VA option unless you specifically ask. The VALID Act forces that information onto the table. If you’re a veteran exploring a $300,000 FHA loan that requires a 3.5% down payment and monthly PMI, seeing the VA loan option right next to it—which might require $0 down and no PMI—could be the difference between buying a home a year sooner or saving hundreds per month.

The downside? FHA lenders will have a minor administrative burden updating their disclosure forms and processes. The FHFA also has to hustle to issue the new rule and update the official application form within the six-month window. However, these are small costs compared to the potential financial benefit for the borrowers who are currently missing out on their earned VA benefits simply due to lack of upfront information.