[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 986 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 986

To amend title 38, United States Code, to make certain improvements in 
 the housing loan programs for veterans and eligible persons, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              July 7, 1997

Mr. Specter (by request) introduced the following bill; which was read 
        twice and referred to the Committee on Veterans' Affairs

_______________________________________________________________________

                                 A BILL


 
To amend title 38, United States Code, to make certain improvements in 
 the housing loan programs for veterans and eligible persons, 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; REFERENCES TO TITLE 38, UNITED STATES CODE.

    (a) Short Title.--This Act may be cited as the ``Veterans' Housing 
Loan Improvements Act of 1997''.
    (b) References to Title 38.--Except as otherwise may be 
specifically provided, whenever in the Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of title 38, United States Code.

SEC. 2. LOAN FEE.

    (a) Section 3729 is amended by striking out everything after the 
catchline, and inserting in lieu thereof:
    ``(a)(1) Except as provided in subsection (c) of this section, a 
fee shall be collected from each person obtaining a housing loan 
guaranteed, insured, or made under this chapter, and each person 
assuming a loan to which section 3714 of this title applies. Such a 
loan may not be guaranteed, insured, made, or assumed until the fee 
payable under this section has been remitted to the Secretary.
    ``(2) The fee may be included in the loan and paid from the 
proceeds thereof.
    ``(b)(1) The amount of the fee shall be determined from the table 
in subsection (d) of this section. The fee is expressed as a percentage 
of the total amount of the loan guaranteed, insured, or made, or, in 
the case of a loan assumption, the unpaid principal balance of the loan 
on the date of the transfer of the property.
    ``(2) Any reference to a section in the Type of Loan column in 
subsection (d) of this section refers to a section of this title.
    ``(3) For the purposes of this section:
            ``(A) The term `Active Duty Veteran' means any veteran 
        eligible for the benefits of this chapter other than a 
        Reservist;
            ``(B) The term `Reservist' means a veteran described in 
        section 3701(b)(5)(A);
            ``(C) The term `Other Obligor' means a person who is not a 
        veteran, as defined by section 101 or other provision of this 
        chapter;
            ``(D) The term `initial loan described in section 3710' 
        means a loan obtained by a veteran pursuant to section 3710 of 
        this title if the veteran has never obtained a loan guaranteed 
        under section 3710 or made under 3711;
            ``(E) The term `subsequent loan described in section 3710' 
        means a loan obtained by a veteran pursuant to section 3710 
        title if the veteran has previously obtained a loan guaranteed 
        under section 3710 or made under section 3711. The term shall 
        not refer to an interest rate reduction refinancing loan;
            ``(F) The term `interest rate reduction refinancing loan' 
        means a loan described in section 3710(a)(8), 3710(a)(9)(B)(i), 
        3710(a)(11), 3712(a)(1)(F) or 3762(h);
            ``(G) The term `0-down' means a downpayment, if any, of 
        less than 5 percent of the total purchase price or construction 
        cost of the dwelling;
            ``(H) The term `5-down' means a downpayment of at least 5 
        percent but less than 10 percent of the total purchase price of 
        construction cost of the dwelling;
            ``(I) The term `10-down' means a downpayment of 10 percent 
        or more of the total purchase price or construction cost of the 
        dwelling;
    ``(c) A fee may not be collected under this section from a veteran 
who is receiving compensation (or who but for the receipt of retirement 
pay would be entitled to receive compensation) or from a surviving 
spouse of any veteran (including a person who died in the active 
military, naval, or air service) who died from a service-connected 
disability.
    ``(d) The following table establishes the percentages of fees to be 
collected under this section:


                            ``Loan Fee Table                            
------------------------------------------------------------------------
                                  Active                                
        ``Type of Loan             Duty      Reservist   Other  Obligor 
                                  Veteran                               
------------------------------------------------------------------------
``Initial loan described in           2.00        2.75  Not Applicable  
 section 3710(a) to purchase                                            
 or construct a dwelling with                                           
 0-down, or any other initial                                           
 loan described in section                                              
 3710(a).                                                               
``Subsequent loan described in        3.00        3.00  Not Applicable  
 section 3710(a) to purchase                                            
 or construct a dwelling with                                           
 0-down, or any other                                                   
 subsequent loan described in                                           
 section 3710(a).                                                       
``Loan described in section           1.50        2.25  Not Applicable  
 3710(a) to purchase or                                                 
 construct a dwelling with 5-                                           
 down.                                                                  
``Loan described in section           1.25        2.00  Not Applicable  
 3710(a) to purchase or                                                 
 construct a dwelling with 10-                                          
 down.                                                                  
``Interest rate reduction             0.50        0.50  Not Applicable  
 refinancing loan.                                                      
``Direct loan made under              1.00        1.00  Not Applicable  
 section 3711.                                                          
``Manufactured home loan              1.00        1.00  Not Applicable  
 described in section 3712                                              
 (other than an interest rate                                           
 reduction refinancing loan).                                           
Loan to Native American               1.25        1.25  Not Applicable  
 veteran made under section                                             
 3762 (other than an interest                                           
 rate reduction refinancing                                             
 loan).                                                                 
``Assuming a loan to which            0.50        0.50  0.50            
 section 3714 applies.                                                  
``Loan made under section             2.25        2.25  2.25            
 3733(a).                                                               
------------------------------------------------------------------------


    ``(e) Notwithstanding subsection (d) of this section, the 
Secretary, by regulation, may prescribe a different percentage for the 
fee applicable to loans made under section 3733(a), if the Secretary 
finds a different amount is necessary so that the fee charged for such 
loans is consistent with the fees charged by other departments of the 
Government for similar loans available to the public, or if the 
Secretary determines that considerations of the market for properties 
sold by the Secretary necessitate a different fee.''.
    (b) This section applies to any loan closed after September 30, 
1997.

SEC. 3. EXTENSION OF NO-BID FORMULA.

    Section 3732(c) is amended by striking out paragraph (11) in its 
entirety.

SEC. 4. ENHANCED VENDEE LOAN SALES.

    Section 3720(h) is amended by:
            (1) striking out paragraph (2) in its entirety; and
            (2) striking out ``(h)(1)'' and inserting in lieu thereof 
        ``(h)''.

SEC. 5. REPEAL OF LOAN DEBT COLLECTION RESTRICTIONS.

    Subchapter III of chapter 37 is amended by striking out section 
3726 in its entirety.

SEC. 6. ACCOUNT CONSOLIDATION.

    (a) Subchapter III of chapter 37 is amended by striking out 
sections 3723, 3724, and 3725 in their entirety.
    (b) Such subchapter is further amended by inserting after section 
3721 the following new section:
``Sec. 3722. Veterans Housing Benefit Program Fund
    ``(a) There is hereby established in the Treasury of the United 
States a fund known as the Veterans Housing Benefit Program Fund.
    ``(b) The Veterans Housing Benefit Program Fund shall be available 
to the Secretary, without fiscal year limitation, for all housing loan 
operations under this chapter, consistent with the Federal Credit 
Reform Act of 1990.
    ``(c) There shall be deposited in the Veterans Housing Benefit 
Program Fund:
            ``(1) All money as of September 30, 1997, in: (A) the 
        Direct Loan Revolving Fund established by section 513 of the 
        Servicemen's Readjustment Act of 1944; (B) the Department of 
        Veterans Affairs Loan Guaranty Revolving Fund established by 
        section 7(a) of Public Law 86-665; and (C) the Guaranty and 
        Indemnity Fund established by section 302(a)(1) of Public Law 
        101-237;
            ``(2) All money hereafter appropriated for such Fund;
            ``(3) All fees collected by the Secretary on or after 
        October 1, 1997, pursuant to section 3729, or any other 
        provision of law or regulation established by the Secretary 
        imposing fees on persons or other entities participating in the 
        housing loan program under this chapter; and
            ``(4) All other amounts received by the Secretary on or 
        after October 1, 1997, incident to housing loan operations 
        under this chapter including, but not limited to, collections 
        of principal and interest, proceeds from the sale, rental, use, 
        or other disposition of property acquired under this chapter, 
        proceeds from the sale of loans pursuant to sections 3720(h) 
        and 3733(a)(3), and penalties collected pursuant to section 
        3710(g)(4)(B).
    ``(d) For purposes of this section, the term `housing loan' shall 
not include a loan made pursuant to subchapter V of this chapter.''.
    (c) The amendments made by this section shall take effect October 
1, 1997.

SEC. 7. EXTENSION OF PILOT PROGRAM FOR DIRECT LOANS TO NATIVE AMERICAN 
              VETERANS.

    Section 3761(c) is amended by striking out ``1997''. and inserting 
in lieu thereof ``1999.''.

SEC. 8. CONFORMING AMENDMENTS.

    (a) Section 2106(e) is amended by striking out ``either the direct 
loan or loan guaranty revolving fund established by section 3723 or 
3724 of this title, respectively.'' and inserting in lieu thereof ``the 
Veterans Housing Benefit Program Fund established by section 3722 of 
this title.''.
    (b) Section 3703(e)(1) is amended by striking out ``3729(c)(1)'' 
and inserting in lieu thereof ``3729(c)''.
    (c) Section 3711(k) is amended by striking out ``and section 3723 
of this title'' both places it appears.
    (d) Section 3720 is amended by striking out subsection (e) in its 
entirety and inserting in lieu thereof--
    ``(e) [Repealed.]''.
    (e) Section 3727(c) is amended by striking out ``funds established 
pursuant to sections 3723 and 3724 of this title, as applicable.'' and 
inserting in lieu thereof ``fund established pursuant to section 3722 
of this title.''.
    (f) Section 3733(a)(6) is amended by--
            (1) striking out ``Department of Veterans Affairs Loan 
        Guaranty Revolving'' and inserting in lieu thereof ``Veterans 
        Housing Benefit Program''; and
            (2) striking out ``3724(a)'' and inserting in lieu thereof 
        ``3722(a)''.
    (g) Section 3733 is further amended by striking out subsection (e) 
in its entirety.
    (h) Section 3734 is amended by--
            (1) striking out, in the catchline, ``Loan Guaranty 
        Revolving Fund and the Guaranty and Indemnity'' and inserting 
        in lieu thereof ``Veterans Housing Benefit Program'';
            (2) striking out, in subsection (a)(1), ``Loan Guaranty 
        Revolving Fund and the Guaranty and Indemnity'' and inserting 
        in lieu thereof ``Veterans Housing Benefit Program'';
            (3) striking out, in subsection (a)(2) ``funds,'' and 
        inserting in lieu thereof ``fund,'';
            (4) striking out, in subsection (b), ``each'' and inserting 
        in lieu thereof ``the''; and
            (5) striking out, in paragraph (2) of subsection (b), 
        subparagraphs (B), (C), and (D) in their entirety, and 
        redesignating subparagraphs (E), (F), and (G) as (B), (C), and 
        (D), respectively.
    (i) Section 3735(a)(3)(A)(i) is amended by striking out ``Loan 
Guaranty Revolving Fund and the Guaranty and Indemnity'' and inserting 
in lieu thereof ``Veterans Housing Benefit Program''.
    (j) The catchline for section 3763 is amended by striking out 
``Housing'' and inserting in lieu thereof ``Native American veteran 
housing''.
    (k) The table of sections for subchapter III of chapter 37 is 
amended by--
            (1) striking out the items relating to sections 3722, 3723, 
        3724, 3725, and 3726 and inserting in lieu thereof--
                    ``3722. Veterans Housing Benefit Program Fund.
                    ``[3723.  Repealed.]
                    ``[3724.  Repealed.]
                    ``[3725.  Repealed.]
                    ``[3726.  Repealed.]'';
            (2) striking out, in the item relating to section 3734, 
        ``Loan Guaranty Revolving Fund and the Guaranty and Indemnity'' 
        and inserting in lieu thereof ``Veterans Housing Benefit 
        Program''; and
            (3) inserting at the end thereof the following new item:
            ``3736. Portfolio Loan Servicing.''.
    (l) The table of sections for subchapter V of chapter 37 is amended 
by striking out, in the term related to section 3763, ``Housing'' and 
inserting in lieu thereof ``Native American veteran housing''.
    (m) Section 7(h)(2)(B) of Public Law 102-54, as amended (38 U.S.C. 
1718 note), is amended by striking out ``Loan Guaranty Revolving'' and 
inserting in lieu thereof ``Veterans Housing Benefit Program''.
                                 <all>