VA Embarks on Long-Term Modernization of Home Loan Program

The Department of Veterans Affairs has embarked on a yearslong program to modernize its home loan guarantee process and streamline services through the creation of application programming interfaces (APIs) and accessible dashboards.

In an interview with GovernmentCIO Media & Research, Deputy Director of the VA Loan Guaranty Program John Bell III outlined the agency’s ultimate goals for one of its most widely used benefits programs.

Having released its “LGY” roadmap in third quarter 2021, VA is now creating the technical foundations necessary for large-scale reform of its home loan services. As outlined within the strategy, these include an emphasis on creating APIs for rapid sharing and transfer of necessary data between VA, customers and loan providers, as well as plans to align practices and technical capacities with those that have been implemented across private industry.

In describing the importance of these modernization efforts, Bell noted the increasing quantity of veterans who buy their homes through VA on an annual basis — a figure that has risen especially sharply over the past few years.

“In June 1944 near the end of World War II is when the original Servicemen Readjustment Act was passed. Since then, we have guaranteed 27 million loans to veterans. Over the past decade, our loan volume has grown tremendously and has risen over 600% in just the past six years,” Bell said.

This has given even greater impetus to create the IT infrastructure to better accommodate this increasing demand for VA home loan services. One of the centerpieces of this will include standardizing data processing and management across the entire home loan process, an update VA plans to implement through following proven industry standards.

“We are fortunate to have an industry that has already gone through a lot of these — defining the data, defining the processes, developing an industry standard — because those are all important when you build out an analytical platform. Everyone has to be on the same page of defining information before you can have that successful analytical capability,” Bell said.

Much of this data integration is being developed in the service of providing greater transparency to the overall loan guaranty process, particularly in terms of helping educate veterans as to the types of loans they can access, as well as keeping them informed throughout the overall home loan process. Some of these innovations improve upon even what is currently available in industry, with VA working to advance upon developments made in the private sector.

“It is all about transparency. That’s what we believe we owe back to industry and to the veteran. It is about understanding how the stakeholders, lender servicers and appraisers provide value to the transaction — how they are performing versus the competition — so that veterans can understand how those stakeholders perform,” Bell said. “From an educational standpoint, making sure they have milestones throughout that lifecycle of the loan to let them know what’s next, what do I do to get to the next step, and what does this step mean? And that’s not available in the industry right now.”

Going forward, VA plans to focus on developing APIs necessary to facilitate this information sharing that will ultimately make the home loan process more accessible, quicker and overall easier for the growing number of veterans who use the service annually. This will culminate in the creation of easily accessible dashboards through which veterans will be able to view all data and information relevant to their home loan process.

“These analytical dashboards that we’ll be able to provide will show not only how VA is performing on its own terms, but also how VA is performing versus competitors in the industry and against other loan products? Those are some of the exciting things that we really want to open the aperture on. And some of those are going to be through contract vehicles where we’re accessing information from other entities and then putting those into our data warehouse and then accessing that information and visualizing it back to them. Or it might be through direct APIs that we’re building with those entities,” Bell said.