Primary effects:

• Veterans receiving VA service‑connected disability compensation: Excluding that compensation from income calculations will generally raise the measured household income gap (i.e., lower counted income) for these households when HUD low/moderate income tests are applied. That can increase eligibility or priority for federally supported housing, community development grants, or programs that use the statutory definition.

• Low‑ and moderate‑income households with veteran members: Households that include veterans with service‑connected compensation may be more likely to meet income thresholds for HUD programs, improving access to housing assistance, community development resources, and program benefits that rely on the 1974 Act definition.

• State, local, and tribal administrators: Agencies that compute low/moderate income status must update application forms, income‑verification procedures, eligibility checklists, training, and IT systems to exclude VA service‑connected disability compensation. The administrative burden is expected to be modest but nonzero.

• HUD program offices: HUD will need to review program rules, guidance, and training materials to ensure consistent application across programs; the GAO report may identify specific programs where statutory language, regulations, or guidance must be amended.

• Congress and policymakers: The mandated GAO report will highlight inconsistencies across HUD programs and supply legislative recommendations, creating a basis for follow‑on Congressional action to harmonize treatment and address gaps affecting veterans and underserved communities.

Net effect and tradeoffs:

• Equity: The change targets a group (veterans receiving service‑connected compensation) that previously could have been penalized in means‑testing; removing that income from calculations tends to increase access to HUD resources for those veterans and their families.
• Administrative cost: Implementing the exclusion requires updating procedures and guidance at multiple levels of government; the bill does not provide implementation funding but the burden is administrative rather than programmatic spending.
• Scope: The statutory change directly modifies the definition in the 1974 Act; the GAO review addresses broader HUD program consistency but additional legislation or regulatory action may be needed to make all HUD programs aligned.