Improvements to housing loan program of Department of Veterans Affairs

(a)

Increase in maximum guaranty amount

Section 3703(a)(1)(C) of title 38, United States Code, is amended by inserting 125 percent of after 25 percent of. (b)

Extension of certain loan fee determination periods

Section 3729(b)(2) of title 38, United States Code, is amended— (1)in subparagraphs (A)(iii) and (iv), (B)(ii), (C)(i) and (iii), and (D)(i) and (ii), by striking October 1, 2011 each place it appears and inserting October 1, 2017; and (2)in subparagraph (B)(iii) and (iv), by striking October 1, 2013 both places it appears and inserting October 1, 2017. (c)

Increase in maximum guaranty amount for certain refinanced loans

Section 3703 (a)(1)(A)(IV) of title 38, United States Code, is amended by inserting (5), after (3),. (d)

Decrease in equity requirement for certain loans

Section 3710(b)(8) is amended by striking 90 percent and inserting 100 percent. (e)

Limitation on amount of fees

Section 3729 of title 38, United States Code, is amended by adding at the end the following new subsection:

(d)

Limitation on amount of fee

For any loan guaranteed, insured, or made in an amount that exceeds the Freddie Mac conforming loan limit limitation determined under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for a single-family residence, as in effect on the date of the enactment of the Department of Veterans Affairs Loan Guaranty Cost Reduction Act of 2007, the amount of the fee collected under this section may not exceed the amount of such a fee collected for a loan guaranteed, insured, or made in an amount equal to such limitation.

(f)

Increase in guaranty for affordable homes

Section 3703(a)(1) of title 38, United States Code, is amended— (1)By redesignating subparagraph (C) as subparagraph (D); and (2)by inserting after subparagraph (B) the following new subparagraph (C):

(C)(i)The maximum amount of guaranty entitlement available to an eligible veteran for a loan in any amount to purchase a dwelling to be owned and occupied by the veteran as a home, if the dwelling is affordable housing (as determined by the Secretary, in consultation with the Secretary of Housing and Urban Development and the heads of other appropriate agencies) and the veteran is the first owner-occupant of the dwelling, shall be the greater of— (I)the amount of guaranty entitlement available to the veteran under subparagraph (A); or (II)30 percent of the loan. (ii)For the purposes of this subparagraph, the term eligible veteran means a veteran whose annual income is below a maximum income amount, which shall be determined by the Secretary.

(g)

Use of certain funds to reduce closing costs for loans guaranteed for affordable homes

Section 3722 of title 38, United States Code, is amended— (1)by redesignating subsection (e) as subsection (f); (2)by inserting after subsection (d) the following new subsection (e):

(e)(1)Amounts deposited into the fund under subsection (c)(2) that are not expended for the purpose of guaranteeing loans under this chapter may be used to reduce the closing costs of a loan referred to in section 3703(a)(1)(C) or 3762 of this title made to a veteran who is not indebted to the Federal Government. (2)During the fiscal years 2008 through 2017, the total amount available for payments under paragraph (1) may not exceed $14,000,000. (3)For each fiscal year, the Secretary shall determine the amount of each payment under paragraph (1) by estimating the number of veterans likely to apply to receive such a payment. The Secretary shall make such payments in the order in which the Secretary receives applications for such payments.