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Panel advances bill to help disabled veterans qualify for mortgages by excluding property taxes from DTI calculations
Summary
House Bill 77, introduced by Mr. Pas, would enable local tax assessors to issue a temporary certificate so veterans exempt from property taxes are not penalized in mortgage debt-to-income calculations; the committee approved a favorable report by voice vote.
Mr. Pas presented House Bill 77 to the committee, describing a recurring problem: although Alabama law exempts property taxes for veterans with a 1% disability, lenders frequently include estimated property taxes in debt-to-income (DTI) ratios when underwriting mortgages, which can prevent veterans from qualifying for loans.
"Currently in Alabama, if you're a veteran and you're 1% disabled, you're exempt from paying property taxes," Mr. Pas said. He explained that lenders nonetheless often include property-tax amounts in DTI calculations during the mortgage approval process. To address that, HB77 would allow county tax assessors to issue a temporary certificate that a veteran could present to a loan officer; the certificate would enable lenders to exclude property taxes from the DTI calculation at the time of underwriting.
Mr. Pas framed the change as a practical tool to "empower our veterans" and make it easier for them to obtain mortgages and buy homes. Committee members did not record substantive opposition on the transcript. A motion to give the bill a favorable report was made and seconded; the committee approved the favorable report by voice vote.
A member asked for better advance notification of schedule changes and the sponsor invited colleagues to co-sponsor related veterans measures. The committee did not record a roll-call tally or fiscal analysis during the discussion.
