[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3039 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 3039

 To amend title 38, United States Code, to authorize the Secretary of 
Veterans Affairs to guarantee loans to provide multifamily transitional 
         housing for homeless veterans, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 13, 1997

Mr. Stump (for himself, Mr. Evans, Mr. Quinn and Mr. Filner) introduced 
 the following bill; which was referred to the Committee on Veterans' 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
 To amend title 38, United States Code, to authorize the Secretary of 
Veterans Affairs to guarantee loans to provide multifamily transitional 
         housing for homeless veterans, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Transitional Housing 
Opportunities Act of 1997''.

SEC. 2. LOAN GUARANTEE FOR MULTIFAMILY TRANSITIONAL HOUSING FOR 
              HOMELESS VETERANS.

    (a) In General.--Chapter 37 of title 38, United States Code, is 
amended by adding at the end the following new subchapter:

 ``SUBCHAPTER VI--LOAN GUARANTEE FOR MULTIFAMILY TRANSITIONAL HOUSING 
                         FOR HOMELESS VETERANS

``Sec. 3771. Definitions
    ``For purposes of this subchapter--
            ``(1) the term `veteran' has the meaning given such term by 
        paragraph (2) of section 101;
            ``(2) the term `homeless veteran' means a veteran who is a 
        homeless individual; and
            ``(3) the term `homeless individual' has the same meaning 
        as such term has within the meaning of section 103 of the 
        Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11302).
``Sec. 3772. General authority
    ``(a) The Secretary may guarantee the full or partial repayment of 
a loan that meets the requirements of this subchapter.
    ``(b)(1) Not more than 15 loans may be guaranteed under subsection 
(a), of which not more than 5 such loans may be guaranteed during the 
3-year period beginning on the date of enactment of the Veterans 
Transitional Housing Opportunities Act of 1997.
    ``(2) A guarantee of a loan under subsection (a) shall be in an 
amount that is not less than the amount necessary to sell the loan in a 
commercial market.
    ``(3) Not more than an aggregate amount of $100,000,000 in loans 
may be guaranteed under subsection (a).
    ``(c) A loan may not be guaranteed under this subchapter unless, 
prior to closing such loan, the Secretary has approved such loan.
    ``(d)(1) The Secretary shall enter into contracts with a qualified 
nonprofit organization to obtain advice in carrying out this 
subchapter, including advice on the terms and conditions necessary for 
a loan that meets the requirements of section 3773.
    ``(2) For purposes of paragraph (1), a qualified nonprofit 
organization is a nonprofit organization--
            ``(A) described in paragraph (3) or (4) of subsection (c) 
        of section 501 of the Internal Revenue Code of 1986 and exempt 
        from tax under subsection (a) of such section, and
            ``(B) that has experience in underwriting transitional 
        housing projects.
    ``(e) The Secretary may carry out this subchapter in advance of the 
issuance of regulations for such purpose.
``Sec. 3773. Requirements
    ``(a) A loan referred to in section 3772 meets the requirements of 
this subchapter if--
            ``(1) the loan is for--
                    ``(A) construction of, rehabilitation of, or 
                acquisition of land for a multifamily transitional 
                housing project described in subsection (b), or more 
                than one of such purposes;
                    ``(B) refinancing of an existing loan for such a 
                project;
                    ``(C) financing acquisition of furniture, 
                equipment, supplies, or materials for such a project; 
                or
                    ``(D) in the case of a loan made for purposes of 
                subparagraph (A), supplying such organization with 
                working capital relative to such a project;
            ``(2) the loan is made in connection with funding or the 
        provision of substantial property or services for such project 
        by either a State or local government or a nongovernmental 
        entity, or both;
            ``(3) the maximum loan amount does not exceed the lesser 
        of--
                    ``(A) that amount generally approved (utilizing 
                prudent underwriting principles) in the consideration 
                and approval of projects of similar nature and risk so 
                as to assure repayment of the loan obligation; and
                    ``(B) 90 percent of the total cost of the project;
            ``(4) the loan is of sound value, taking into account the 
        creditworthiness of the entity (and the individual members of 
        the entity) applying for such loan;
            ``(5) the loan is secured; and
            ``(6) the loan is subject to such terms and conditions as 
        the Secretary determines are reasonable, taking into account 
        other housing projects with similarities in size, location, 
        population, and services provided.
    ``(b) For purposes of this subchapter, a multifamily transitional 
housing project referred to in subsection (a)(1) is a project that--
            ``(1)(A) provides transitional housing to homeless 
        veterans, which housing may be single room occupancy (as 
        defined in section 8(n) of the United States Housing Act of 
        1937 (42 U.S.C. 1437f(n));
            ``(B) provides supportive services and counselling services 
        (including job counselling) at the project site with the goal 
        of making such veterans self-sufficient;
            ``(C) requires that the veteran seek to obtain and keep 
        employment;
            ``(D) charges a reasonable fee for occupying a unit in such 
        housing;
            ``(E) maintains strict guidelines regarding sobriety as a 
        condition of occupying such unit; and
            ``(F) may include space for neighborhood retail services or 
        job training programs; and
            ``(2) may provide transitional housing to veterans who are 
        not homeless and to homeless individuals who are not veterans 
        if--
            ``(A) at the time of taking occupancy by any such veteran 
        or homeless individual, the transitional housing needs of 
        homeless veterans in the project area have been met;
            ``(B) the housing needs of any such veteran or homeless 
        individual can be met in a manner that is compatible with the 
        manner in which the needs of homeless veterans are met under 
        paragraph (1); and
            ``(C) the provisions of subparagraphs (D) and (E) of 
        paragraph (1) are met.
    ``(c) In determining whether to guarantee a loan under this 
subchapter, the Secretary shall consider--
            ``(1) the availability of Department of Veterans Affairs 
        medical services to residents of the multifamily transitional 
        housing project; and
            ``(2) the extent to which needs of homeless veterans are 
        met in a community, as assessed under section 107 of Public Law 
        102-405.
``Sec. 3774. Default
    ``(a) The Secretary shall take such steps as may be necessary to 
obtain repayment on any loan that is in default and that is guaranteed 
under this subchapter.
    ``(b) Upon default of a loan guaranteed under this subchapter and 
terminated pursuant to State law, a lender may file a claim under the 
guarantee for an amount not to exceed the lesser of--
            ``(1) the maximum guarantee; or
            ``(2) the difference between--
                    ``(A) the total outstanding obligation on the loan, 
                including principal, interest, and expenses authorized 
                by the loan documents, through the date of the public 
                sale (as authorized under such documents and State 
                law); and
                    ``(B) the amount realized at such sale.
``Sec. 3775. Multifamily transitional housing guarantee fund
    ``(a) There is established a fund to be known as the Multifamily 
Transitional Housing Guarantee Fund.
    ``(b) Amounts in the fund shall be available to the Secretary for 
the payment of any guarantee issued under this subchapter.
``Sec. 3776. Audit
    ``During each of the first 3 years of operation of a multifamily 
transitional housing project with respect to which a loan is guaranteed 
under this subchapter, there shall be an annual, independent audit of 
such operation. Such audit shall include a detailed statement of the 
operations, activities, and accomplishments of such project during the 
year covered by such audit. The party responsible for obtaining such 
audit (and paying the costs therefor) shall be determined before the 
Secretary issues a guarantee under this subchapter.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 37 of title 38, United States Code, is amended by adding at the 
end the following new items:

 ``SUBCHAPTER VI--LOAN GUARANTEE FOR MULTIFAMILY TRANSITIONAL HOUSING 
                         FOR HOMELESS VETERANS

``3771. Definitions.
``3772. General authority.
``3773. Requirements.
``3774. Default.
``3775. Multifamily transitional housing repayment fund.
``3776. Audit.''.

SEC. 3. INVESTMENT OF AMOUNTS IN NATIONAL SERVICE LIFE INSURANCE FUND.

    Section 1920 of title 38, United States Code, is amended by adding 
at the end the following new subsection:
    ``(c)(1) In addition to the authority under subsection (b), after 
setting aside such amounts as may be required to meet liabilities 
referred to in subsection (b), the Secretary of the Treasury is 
authorized to invest and reinvest such fund, or any part thereof, in 
one or more securities described in paragraph (4).
    ``(2) From the proceeds of any investment authorized by paragraph 
(1)--
            ``(A) there shall be credited to such fund an amount equal 
        to the amount such investment would have earned if such 
        investment had been made under subsection (b); and
            ``(B) there shall be available for the purpose of 
        offsetting potential liabilities of the United States under 
        subchapter VI of chapter 37, the excess (if any) of the 
        proceeds from such investment over the amount described in 
        subparagraph (A).
    ``(3) Upon the extinguishment of liability of the United States 
under a guarantee made under subchapter VI of chapter 37, as determined 
by the Secretary, the Secretary shall credit such fund with an amount 
equal to the excess (if any) of the proceeds from the investment under 
paragraph (2)(B) over the amount required to offset remaining 
liabilities (if any) under such subchapter.
    ``(4) A security referred to in paragraph (1) is an asset-backed 
security which represents interests in, or obligations backed by, the 
pool of assets of which such asset-backed security is a part, and 
which--
            ``(A) is rated at least AAA (or the equivalent thereof) by 
        an independent and nationally recognized securities rating 
        company based on an amount of capital reserves and other 
        characteristics, including management practices, interest rate 
        risk, asset quality, operating performance, and accounting 
        procedures;
            ``(B) is guaranteed by, or represents an interest in 
        securities issued or guaranteed by--
                    ``(i) the Federal Home Loan Mortgage Corporation;
                    ``(ii) the Federal National Mortgage Association;
                    ``(iii) the Government National Mortgage 
                Association; or
                    ``(iv) the Department of Veterans Affairs; or
            ``(C) is sold in private placements or exclusively to 
        institutional or other sophisticated investors and which would, 
        if rated, be rated at least AAA rating (as described in 
        subparagraph (A)).''.
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