[Congressional Record Volume 154, Number 43 (Thursday, March 13, 2008)]
[Senate]
[Pages S2150-S2151]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. AKAKA (for himself, Mr. Reid, Mr. Durbin, Mr. Burr, Mr. 
        Rockefeller, Mrs. Murray, Mr. Obama, Mr. Sanders, Mr. Brown, 
        Mr. Baucus, Mrs. Clinton, Mr. Kerry, and Mrs. Boxer):
  S. 2768. A bill to provide a temporary increase in the maximum loan 
guaranty amount for certain housing loans guaranteed by the Secretary 
of Veterans Affairs; to the Committee on Veterans' Affairs.
  Mr. AKAKA. Mr. President, today I introduce a bill that would rectify 
an oversight made in the recent passage of the Economic Stimulus Act of 
2008. If enacted, this bill will allow thousands of veterans to realize 
the American dream of owning a home. Senators Reid, Durbin, Burr, 
Rockefeller, Murray, Obama, Sanders, Brown, Baucus, Clinton, Kerry, and 
Boxer join me in offering this legislation.
  The VA Home Loan Guaranty was part of the original GI Bill in 1944. 
It was signed into law by President Franklin D. Roosevelt and provided 
veterans with a federally guaranteed home loan with no down payment. 
So, as World War II was ending, landmark legislation made the dream of 
home ownership a reality for millions of returning veterans. They were 
able to build new homes and otherwise begin new lives following their 
service and with the assistance of the Federal Government.
  Today, more than 25 million veterans and servicemembers are eligible 
for VA home loan guarantees. Eligibility extends to veterans who served 
on active duty for a minimum of 90 days during wartime or a minimum of 
181 continuous days during peacetime, and have a discharge other than 
dishonorable. Members of the Guard and Reserve who have never been 
called to active duty must serve a total of 6 years in order to be 
eligible. Certain surviving spouses are also eligible for the housing 
guarantee.
  The amount of the home loan guaranty was last adjusted by the 
Veterans Benefits Act of 2004. The maximum guaranty amount was 
increased to 25 percent of the Freddie Mac conforming loan limit 
determined under section 305(a)(2) of the Federal Home Loan Mortgage 
Corporation Act for a single family residence, as adjusted for the year 
involved. Using that formula, since the Freddie Mac conforming loan 
limit for a single family residence in 2008 is $417,000, VA will 
guaranty a veteran's loan up to $104,250, or 25 percent of the Freddie 
Mac limit. This guaranty exempts homeowners from having to make a down 
payment or secure private mortgage insurance.
  The newly-enacted Economic Stimulus Act of 2008, however, temporarily 
reset the Fannie Mae, Freddie Mac, and FHA home loan guarantee limits 
to 125 percent of metropolitan-area median home prices, without 
reference to the VA home loan program. This had the effect of raising 
the Fannie Mae and Freddie Mac limits to nearly $730,000, in the 
highest cost areas, while leaving the VA limit of $417,000 in place.
  The measure I am introducing today would correct the oversight in the 
Economic Stimulus Act and extend the temporary increase to veterans as 
well.
  Unlike the economic stimulus legislation, my legislation would extend 
the temporary increase to December 31, 2011, rather than just through 
2008. This would enable more veterans to utilize their VA benefit to 
purchase a home. In fact, VA expects that there would be an increase of 
approximately 4,313 loans as a result of increasing the VA loan limit 
through December 2011.
  I urge all of my colleagues to support this measure, so that this 
important group of Americans might reap the benefits of an increased 
home loan guaranty in this time of economic uncertainty.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2768

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

     SECTION 1. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT 
                   FOR CERTAIN HOUSING LOANS GUARANTEED BY THE 
                   SECRETARY OF VETERANS AFFAIRS.

       Notwithstanding subparagraph (C) of section 3703(a)(1) of 
     title 38, United States Code, for purposes of any loan 
     described in subparagraph (A)(i)(IV) of such section that is 
     originated during the period beginning on

[[Page S2151]]

     the date of the enactment of this Act and ending on December 
     31, 2011, the term ``maximum guaranty amount'' shall mean an 
     amount equal to 25 percent of the higher of--
       (1) the limitation determined under section 305(a)(2) of 
     the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1454(a)(2)) for the calendar year in which the loan is 
     originated for a single-family residence; or
       (2) 125 percent of the area median price for a single-
     family residence, but in no case to exceed 175 percent of the 
     limitation determined under such section 305(a)(2) for the 
     calendar year in which the loan is originated for a single-
     family residence.
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