[Congressional Record Volume 144, Number 79 (Wednesday, June 17, 1998)]
[Senate]
[Page S6488]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. AKAKA:
  S. 2181. A bill to amend section 3702 of title 38, United Code, to 
make permanent the eligibility of former members of the Selected 
Reserve for veterans housing loans; to the Committee on Veterans' 
Affairs.
  Mr. AKAKA. Mr. President, I rise today to introduce legislation that 
would permanently authorize the Department of Veterans Affairs Home 
Loan Guaranty Program for members of the Selected Reserve.
  The eligibility of National Guard and Reserve members for VA-
guaranteed home loans will expire in October 1999. I believe that 
Section 3702 of Title 38, which allows Guard and Reserve members who 
complete 6 years of service to participate in the loan program, should 
be made permanent.
  The law extending eligibility for the VA Home Loan Guaranty Program 
to these service members was enacted in 1992 with bipartisan support in 
the Senate and in the House. As the sponsor of the original bill, I am 
pleased with the participation of Guard and Reserve members in the 
program, and am committed to ensuring that their eligibility for this 
program continues beyond the sunset date.
  With the downsizing of our active duty military forces, Guard and 
Reserve units are becoming an increasingly vital element of the total 
force. However, there are very few incentives to get qualified 
individuals to serve our country in the Selected Reserve. The VA Home 
Loan Guaranty Program for National Guard and Reserve members is an 
excellent incentive to join and remain in the Selected Reserve.
  Since the VA Home Loan Guaranty Program for Guard and Reserve members 
began in October 1992, the VA has guaranteed more than 33,000 loans 
through fiscal year 1996. In 1996 alone, approximately 11,000 loans 
totalling over $1 billion were made. According to the VA, only 93 out 
of all loans made to Reservists have been foreclosed upon, for a 
minimal default rate of about 0.4 percent. By comparison, the 
foreclosure rate for loans made to other veterans was two and one-half 
times higher than the rate for Reservists. Furthermore, 67 percent of 
loans to Reservists guaranteed by the VA in fiscal year 1996 were to 
first time home buyers, compared to 56 percent of loans to other 
veterans.
  As the statistics on VA-guaranteed home loans indicate, the inclusion 
of Guard and Reserve members actually stabilizes the financial 
viability of he program since this group is likely to have a lower 
default rate than other veterans. Reservists are generally an older, 
more mature, and stable group with established civilian jobs and ties 
to local communities.
  Mr. President, it is clear that the VA Home Loan Guaranty Program is 
not only good for members of the Selected Reserve, it is also 
beneficial for the VA Home Guaranty Program. Furthermore, the local 
economies where the homes are purchased also benefit from this program. 
So, therefore, I urge my colleagues to join me in supporting this 
legislation. Passage of this measure will ensure that the program 
continues to be made available to National Guard and Reserve members 
who have served our country.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2181

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

     SECTION 1. PERMANENT ELIGIBILITY OF FORMER MEMBERS OF 
                   SELECTED RESERVE FOR VETERANS HOUSING LOANS.

       Section 3702(a)(2)(E) of title 38, United States Code, is 
     amended by striking out ``For the period beginning on October 
     28, 1992, and ending on October 27, 1999, each veteran'' and 
     inserting in lieu thereof ``Each veteran''.
                                 ______