II 112th CONGRESS 2d Session S. 3348 IN THE SENATE OF THE UNITED STATES June 27, 2012 Mr. Durbin 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 improve the multifamily transitional housing loan program of the Department of Veterans Affairs, and for other purposes.

1.

Authority for payment by Secretary of Veterans Affairs of guarantees for loans guaranteed by Secretary for multifamily transitional housing projects

Section 2053 of title 38, United States Code, is amended by striking subsection (a) and inserting the following new subsection (a): (a)(1)Notwithstanding any other provision of law, the Secretary may, for any loan guaranteed under this subchapter, pay the guarantee, in part or in full, if the loan is not in default. Such guarantee payment may include amounts necessary to extinguish the loan and pay all prepayment premiums and transaction costs. (2)The Secretary may forgive, waive, release, or discharge a borrower’s liability to the Secretary with respect to a loan or a guarantee for the loan for any loss resulting from a payment made under paragraph (1). (3)The amount resulting from a decision of the Secretary to forgive, waive, release, or discharge any repayment obligation owed by the borrower to the Secretary with respect to a loan guaranteed by the Secretary under this subchapter for a multifamily transitional housing project— (A)shall not be included in the borrower’s gross income; (B)shall be treated as an amount not derived from a Federal grant for purposes of subsection (d)(5)(A) of section 42 of the Internal Revenue Code of 1986; and (C)shall not otherwise reduce the borrower’s depreciable basis or eligible basis (for purposes of such section 42) of such housing project. .