[Congressional Record (Bound Edition), Volume 150 (2004), Part 10]
[House]
[Pages 13677-13680]
[From the U.S. Government Publishing Office, www.gpo.gov]




 INCREASING MAXIMUM AMOUNT OF HOME LOAN GUARANTY AVAILABLE UNDER HOME 
      LOAN GUARANTY PROGRAM OF THE DEPARTMENT OF VETERANS AFFAIRS

  Mr. BROWN of South Carolina. Mr. Speaker, I move to suspend the rules 
and pass the bill (H.R. 4345) to amend title 38, United States Code, to 
increase the maximum amount of home loan guaranty available under the 
home loan guaranty program of the Department of Veterans Affairs, and 
for other purposes.
  The Clerk read as follows:

                               H.R. 4345

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

     SECTION 1. INCREASE IN, AND ANNUAL INDEXING OF, MAXIMUM 
                   AMOUNT OF HOME LOAN GUARANTY FOR CONSTRUCTION 
                   AND PURCHASE OF HOMES.

       (a) Maximum Loan Guaranty Based on 100 Percent of the 
     Freddie Mac Conforming Loan Rate.--Section 3703(a)(1) is 
     amended by striking ``$60,000'' each place it appears in 
     subparagraphs (A)(i)(IV) and (B) and inserting ``the maximum 
     guaranty amount (as defined in subparagraph (C))''.
       (b) Definition.--Such section is further amended by adding 
     at the end the following new subparagraph:
       ``(C) In this paragraph, the term `maximum guaranty amount' 
     means the dollar amount that is equal to 25 percent of 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 adjusted for the year involved.''.

                              {time}  1515

  The SPEAKER pro tempore (Mr. Terry). Pursuant to the rule, the 
gentleman from South Carolina (Mr. Brown) and the gentlewoman from 
California (Mrs. Davis) each will control 20 minutes.
  The Chair recognizes the gentleman from South Carolina (Mr. Brown).
  Mr. BROWN of South Carolina. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, I rise in support of H.R. 4345. This bill would provide 
the largest increase in the VA home loan guaranty since 1978, 
increasing the maximum home purchase guaranty from $240,000 to 
$333,700. That is a 39 percent increase.
  Additionally, this measure would provide for annual increases in the 
home loan guaranty to match rising housing prices. It would do so by 
linking the VA loan limit with the conforming loan rate of the Federal 
Home Loan Mortgage Corporation. Not only would this measure assist our 
veterans, but it would ensure that our courageous servicemembers 
fighting in Iraq, Afghanistan, and throughout the world, along with 
their families, can take part in the American dream of homeownership.
  In fiscal year 2003, the VA guaranteed 419,717 home loans for 
veterans and 57,129 home loans for active duty servicemembers. Since 
the program's inception in 1944, the VA has guaranteed more than 17.5 
million home loans, thus providing homeownership opportunities to 
millions of veterans and their families.
  This is a good bill; and I thank my colleagues, the gentlewoman from 
Florida (Ms. Ginny Brown-Waite) and the gentlewoman from California 
(Mrs. Davis), for their bipartisan cooperation.
  Mr. Speaker, I reserve the balance of my time.
  Mrs. DAVIS of California. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, I rise in strong support of H.R. 4345. I would just like 
to begin by saying that managing this legislation for our side is 
particularly meaningful for me today because I have fought to improve 
the VA's home loan program since I was first elected to Congress over 3 
years ago.

[[Page 13678]]

  I also wanted to thank the gentleman from New Jersey (Chairman Smith) 
and the gentleman from Illinois (Ranking Member Evans) for bringing 
this legislation before the Committee on Veterans' Affairs and for 
sending it to the House floor.
  I certainly want to thank my colleague, the gentlewoman from Florida 
(Ms. Ginny Brown-Waite), with whom I have been honored to serve on the 
Committee on Veterans' Affairs, for working with me over recent months 
to perfect legislation that brings significant improvements to the home 
loan program administered by the Department of Veterans Affairs.
  Mr. Speaker, I have heard from many veterans in San Diego about the 
need to increase the loan amount under the VA's home loan program. 
Simply put, veterans living in high-cost areas cannot use the VA loan 
because the current limit of $240,000 is not nearly enough to purchase 
a home in regions such as San Diego where the median price for a home 
has now reached $500,000. Far too many of our veterans cannot take 
advantage of the benefits that come with a VA loan because of this low 
limit.
  I also fear that many veterans in my community will never have the 
opportunity to buy a home without a subsidized VA loan. My staff heard 
from one disabled veteran shortly after I was elected who tried to 
purchase a home in San Diego; and unfortunately, with the low limit in 
the VA program, he was not able to find anything affordable and still 
lives in an apartment today.
  It is my goal to let veterans know that homeownership is a real 
possibility for them.
  The bill before Congress today, H.R. 4345, introduced by me and the 
gentlewoman from Florida (Ms. Ginny Brown-Waite), would not only 
increase the home loan limit to $333,700, but it would index the amount 
to the Freddie Mac criteria to guarantee automatic increases annually.
  America's veterans deserve to be on an equal footing with the general 
public in today's competitive real estate markets. The bill before the 
House accomplishes exactly that. I urge my colleagues to support this 
important legislation.
  Though passage of H.R. 4345 will be a victory for our veterans, I 
intend to keep working hard on this issue to ensure that they can 
continue to achieve homeownership and that the home loan program is 
effective.
  Just last week, I introduced H.R. 4616 to extend a VA home loan pilot 
program set to expire in September of 2005, which would offer 
adjustable rate mortgages to veterans. Like the general public, our 
veterans should have the ability to choose the type of mortgage that 
will best suit their needs.
  After fighting for the United States, our veterans deserve the 
opportunity to live in their own home. I am hopeful that my colleagues 
will continue to support improvements to our veterans home loan 
program.
  Again, I am truly honored that the House is considering this 
legislation so that we may assure meaningful home loan benefits to 
America's veterans.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BROWN of South Carolina. Mr. Speaker, I yield 5 minutes to the 
gentlewoman from Florida (Ms. Ginny Brown-Waite).
  Ms. GINNY BROWN-WAITE of Florida. Mr. Speaker, I am very pleased to 
speak on behalf of this legislation, which was introduced to improve 
the VA home loan program. The Veterans Housing Affordability Act, H.R. 
4345, is a good government solution which will assist veterans across 
the Nation at no cost to the taxpayers.
  Homeownership is one of the main building blocks of strong 
communities and also a strong economy. A home is the largest financial 
investment most American families will ever make, and it allows them to 
build financial security as the equity in their home increases. 
Moreover, this tangible asset provides a family with borrowing power to 
finance important needs such as the education of their children. It is 
also a nest egg with very reliable and significant returns on 
investment regardless of race, color, or creed.
  The VA has been providing home loan guarantees to men and women who 
serve our country since 1944. Under this program, the veteran purchases 
a home through a private lender and the VA guarantees to pay the lender 
a portion of the loss if the veteran defaults on the loan. Because of 
this benefit, millions of veterans have been able to realize the 
American dream of owning their own home.
  Since its inception in 1944, the VA has guaranteed $748 billion in 
loans for 16.9 million homeowners. In 2002, the VA guaranteed more than 
$40.1 billion in loans to finance the purchase or refinance 317,250 
homes. Obviously, this program is a rip-roaring success. It has been a 
tremendous asset to veterans and their families at minimum cost to the 
government.
  The first decade of the 21st century, however, has seen an expansive 
growth in home values. For homeowners this has been a tremendous boon. 
They have seen their tangible asset increase in value. In some regions, 
home values have more than doubled in the last 5 years.
  However, those not fortunate to already be a homeowner are facing 
daunting prices for entry-level homes. In New Jersey, median housing 
prices hover in the 300 to $400,000 range. The same is true for other 
regions in Connecticut, California, Washington, Virginia, Maryland, 
Illinois, and even my home State of Florida.
  Many soldiers postpone their homeownership until after they are out 
of the service. For these brave veterans, as median housing prices 
rise, the VA benefit actually decreases. The rising housing market 
erodes the purchasing power of the VA home loan. Depending on where the 
veteran lives, the $240,000 amount is simply insufficient to cover 
their housing needs.
  This is simply wrong. At the very least, we owe our veterans the same 
chance at the American dream after their service as they had the day 
that they enlisted.
  H.R. 4345 indexes the maximum VA guarantee amount to 25 percent of 
the Freddie Mac conforming loan rate. The prevailing VA loan limit 
would be $333,700, and it would continue to automatically adjust to the 
market and to the housing needs of veterans.
  The good news is that the Congressional Budget Office has determined 
that this bill actually saves the government money. Imagine that, 
helping veterans and saving money. According to the CBO projection, it 
will save $39 million in 2005 and $208 million over 5 years and a 
whopping $288 million in 10 years.
  We are all very proud of the men and women who serve our Nation past 
and present, and I hope that the Members will agree that the value of 
the veterans benefit should not vary depending on where they live or 
when they purchase a home. I think this legislation is important and 
very timely, and I urge support of this legislation.
  I certainly want to thank the gentleman from New Jersey (Chairman 
Smith) and also the gentleman from South Carolina (Mr. Brown) for their 
leadership on issues affecting veterans; and the gentlewoman from 
California (Mrs. Davis), who was an original cosponsor on this 
legislation, should also be recognized for her strong support in 
bringing about this legislation.
  Additionally, Senator Corzine has introduced the bill in the Senate, 
and we are hoping for some speedy action there. This truly is obviously 
a bipartisan effort to assist veterans throughout our Nation, and I 
urge support of this legislation.
  Mrs. DAVIS of California. Mr. Speaker, I yield 2 minutes to the 
gentleman from Illinois (Mr. Evans), ranking member of the Committee on 
Veterans' Affairs.
  Mr. EVANS. Mr. Speaker, I rise in support of H.R. 4345. This bill is 
an example of bipartisan legislation that the House Committee on 
Veterans' Affairs has voted for.
  It includes provisions drawn from H.R. 1735, introduced on April 10, 
2003, by the gentlewoman from California (Mrs. Davis), and H.R. 4065, 
introduced by the gentlewoman from Florida (Ms. Ginny Brown-Waite) in 
March of this year.
  H.R. 4345, a compromise bill, increases the VA home loan amount to

[[Page 13679]]

that provided by the Freddie Mac program for a single family residence. 
It also indexes the VA home loan amount to the Freddie Mac program, 
thereby taking into account future needs in this program. This is 
something that the veterans deserve.
  In addition, I would like to note that the original Davis bill would 
have generated more savings than the original Brown-Waite bill, but 
this bill exceeds the CBO savings for either bill. These savings will 
be needed to pay for improvements to benefit our Nation's current and 
future veterans. The Committee on Veterans' Affairs has ordered these 
much-needed improvements reported to the House in H.R. 1716, which 
contains the provisions and cost savings of H.R. 4345. Veterans across 
the country are anxiously awaiting this bill's scheduling to come under 
suspension.
  Mr. BROWN of South Carolina. Mr. Speaker, we have no further speakers 
at this time, and I reserve the balance of my time.
  Mrs. DAVIS of California. Mr. Speaker, I yield 3 minutes to the 
gentleman from Maine (Mr. Michaud).
  Mr. MICHAUD. Mr. Speaker, I thank the gentlewoman for yielding me 
time.
  I rise in strong support of H.R. 4345, which provides an increase in 
the home loan amount for veterans.
  I want to thank the gentlewoman from California for introducing H.R. 
1735, which raised our awareness of this very important issue, and for 
her bipartisan work on this matter. I am glad that the provisions of 
H.R. 1735 are included in the bill we are considering today.
  I also want to thank the gentlewoman from Florida for introducing her 
bill, H.R. 4065, and for her continued dedication to this issue.
  H.R. 4345 is a bipartisan compromise bill which includes the best 
features of H.R. 1735 and H.R. 4065. I appreciate the gentlewoman from 
Florida's willingness to include the higher amount proposed by the 
gentlewoman from California's (Mrs. Davis) bill and to limit the loan 
amount to that provided under Freddie Mac for a single family home.
  As a result, we obtain maximum savings for the home loan provision 
without including the higher amounts under the Freddie Mac program for 
multifamily units which have a significant higher foreclosure rate.
  By limiting the amount to that for a single family dwelling, the risk 
of loss to the taxpayer is lessened.
  In my hometown of East Millinocket, a person can buy a three-bedroom 
home for $35,000. However, I recognize in other parts of the country, 
and indeed other parts of the State of Maine, homes are much more 
costly.

                              {time}  1530

  This bill would provide necessary home loan benefits to veterans 
regardless of where they live, whether in East Millinocket or San 
Diego. Veterans who serve our Nation should be able to obtain homes 
through the Department of Veterans Affairs anywhere in the United 
States.
  I note that a similar provision of H.R. 4345 has been included in 
section 301 of H.R. 1716, the ``Veterans Earn and Learn Act.'' I would 
like to thank the chairman, the gentleman from New Jersey (Mr. Smith), 
and the ranking member, the gentleman from Illinois (Mr. Evans), and 
the subcommittee chairman, the gentleman from South Carolina (Mr. 
Brown) for their leadership on this issue.
  In closing, Mr. Speaker, I also would like to acknowledge the newest 
member of the Committee on Veterans' Affairs, the gentlewoman from 
South Dakota (Ms. Herseth), who will also be speaking on this bill. I 
look forward to working with the gentlewoman from South Dakota on the 
committee to improve benefits for our veterans.
  Mrs. DAVIS of California. Mr. Speaker, I yield 2 minutes to the 
gentleman from Texas (Mr. Rodriguez).
  Mr. RODRIGUEZ. Mr. Speaker, I rise today in support of H.R. 4345, and 
would like to take this opportunity to thank my colleagues on the 
Committee on Veterans' Affairs, especially the gentlewoman from Florida 
(Ms. Brown-Waite) and the gentlewoman from California (Mrs. Davis) for 
bringing this issue forward.
  For many years, the gentlewoman from California (Mrs. Davis) has been 
advocating for this, and I am glad that we are taking it up on 
suspension today. Like all Americans, our veterans dream of obtaining 
the American Dream of homeownership. Our veterans have fought 
selflessly on behalf of our country and are entitled to the benefits we 
have promised them, including home loan benefits.
  Unfortunately, for many, the dream is faced with many obstacles. The 
current VA home loan limits of $240,000 prevents many veterans from 
using home loan benefits to purchase a home in many high-cost areas, 
like California, Florida, and many parts of the State of Texas, which 
affect my veterans who are retired.
  This legislation indexes the maximum loan amount to 100 percent of 
the Freddie Mac Conforming Loan Rate to make the VA home loan program 
compatible with the home loans available to the public nationwide. 
Additionally, the legislation allows the maximum VA loan amount to 
adjust automatically each year to the Freddie Mac standard in order to 
remain compatible with the national housing market.
  This legislation is extremely important. During 2003, three million 
veterans took advantage of the VA home loan program. Three million. And 
I am also very positive that more veterans will be able to take 
advantage of these benefits because of the improvements we have made 
today.
  As our troops are fighting in Iraq and Afghanistan, we must continue 
to show them and to say thanks from a grateful Nation. This particular 
piece of legislation is something that is needed and I am real pleased 
we have had this opportunity. I cannot think of a better way of saying 
thanks to all our soldiers and our veterans than by improving the 
benefits to our soldiers with this legislation.
  Once again, I thank the two authors.
  Mrs. DAVIS of California. Mr. Speaker, I yield 3 minutes to the 
gentlewoman from South Dakota (Ms. Herseth).
  Ms. HERSETH. Mr. Speaker, I thank the gentlewoman for yielding me 
this time, and I rise in support of H.R. 4345, which will provide an 
increase in the home loan amount for veterans. As a new Member of the 
House Committee on Veterans' Affairs, I am pleased to speak in support 
of this bipartisan measure.
  As has been mentioned, H.R. 4345 would increase the amount of the VA 
loan guarantee to 25 percent of the Freddie Mac loan amount for a 
single-family home, and automatically increase the amount whenever the 
Freddie Mac amount was changed. This has the effect of matching the VA 
loan guarantee to that of Freddie Mac. As importantly, the bill 
generates savings of $288 million over 10 years.
  This bill will impact veterans in South Dakota and around the 
country. Some areas, such as San Diego, have much higher real estate 
prices. However, I believe our veterans, no matter where they choose to 
live, should have an equal opportunity to obtain a home loan from the 
Department of Veterans Affairs. This bill will provide that 
opportunity.
  As the gentleman from Maine (Mr. Michaud) noted, this bill contains 
provisions identical to those included in section 301 of H.R. 1716, 
which I have proudly cosponsored. While I am new to the Congress, I 
recognize the need to provide for the costs associated with improved 
benefits for veterans. The $288 million in savings from this bill would 
free up the resources for Congress to pay for many of the provisions in 
H.R. 1716, which will benefit the 76,000 veterans in South Dakota and 
millions of United States veterans who have served in wartime and in 
peacetime.
  I would like to thank our chairman, the gentleman from New Jersey 
(Mr. Smith) and the ranking member, the gentleman from Illinois (Mr. 
Evans) for welcoming me to the Committee on Veterans' Affairs as well 
as for their work on this bill. I look forward to working with them and 
others to provide for our Nation's veterans.

[[Page 13680]]


  Mrs. DAVIS of California. Mr. Speaker, I yield 2 minutes to the 
gentlewoman from Guam (Ms. Bordallo).
  Ms. BORDALLO. Mr. Speaker, I, too, proudly rise today in support of 
H.R. 4345 and in support of all the veterans that stand to benefit from 
its passage.
  I would like to thank the gentlewoman from California (Mrs. Davis) 
and the gentlewoman from Florida (Ms. Brown-Waite) for recognizing that 
veterans need help meeting the staggeringly high increases in the cost 
of buying their own home. And, Mr. Speaker, I would like to especially 
thank the gentlewoman from California (Mrs. Davis) for introducing her 
original legislation, H.R. 1735, which first brought attention to this 
issue last year by gathering 61 cosponsors of her proposal to increase 
the loan guarantee.
  The old loan guarantee of $60,000, which provides a loan of $240,000, 
is not sufficient in Guam to meet the cost of buying a home, and I 
expect that this is also true in San Diego, Florida, and all over the 
United States. The new maximum amount in this legislation addresses 
this problem to help veterans secure the mortgage financing that they 
need.
  I look forward to further opportunities to improve the benefits 
available to veterans, and urge my colleagues to support this important 
piece of legislation. This will be such good news for our veterans 
across the Nation. On Guam, it will be particularly welcomed, since 
many of our veterans feel shortchanged when it comes to veterans' 
benefits. I strongly support H.R. 4345.
  Mrs. DAVIS of California. Mr. Speaker, how much time do I have 
remaining?
  The SPEAKER pro tempore (Mr. Terry). The gentlewoman from California 
has 7\1/2\ minutes remaining.
  Mrs. DAVIS of California. Mr. Speaker, I yield 1 minute to the 
gentlewoman from California (Ms. Waters).
  Ms. WATERS. Mr. Speaker, I thank the gentlewoman for yielding me this 
time, and I thank the gentlewoman from California (Mrs. Davis) and the 
gentlewoman from Florida (Ms. Brown-Waite) for their work on this 
important issue.
  Mr. Speaker, I am pleased to rise in support of H.R. 4345, and I am 
very proud to support opportunities for our veterans to own their own 
home. Who better can we support to realize the American Dream than 
those who fight to keep the American Dream alive for all Americans? 
Unfortunately, in many cities, including my home city of Los Angeles, 
the goal of owning a home is elusive for many families because of the 
high price of homes. However, this bill will provide significant 
assistance to veterans who wish to own their own home, and I am pleased 
to support it.
  I am proud to be a cosponsor of the bill of the gentlewoman from 
California (Mrs. Davis), H.R. 1735, which would have increased the 
maximum amount of the home loan guarantee. However, I am pleased to 
support this bill, sponsored by the gentlewoman from Florida (Ms. 
Brown-Waite) and supported by the gentlewoman from California, which 
will increase the maximum loan guarantee to $333,700 and index loan 
amount to 25 percent of the Freddie Mac Conforming Loan Rate to make 
the VA's home loan program compatible with the home loans available to 
the public nationwide.
  By indexing the loan rate Congress will assure that veterans will 
continue to have the opportunity to purchase homes regardless of how 
high the Conforming Loan Rate climbs.
  Mr. Speaker, this bill is a small but important gesture to thank 
veterans for their service to our country. I am pleased to support this 
bill and urge my colleagues to support is also.
  Mrs. DAVIS of California. Mr. Speaker, I yield 2 minutes to the 
gentleman from Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. Mr. Speaker, I am delighted to be part of 
this bipartisan recognition that sometimes you have to expand 
government. There are times when government is too limited and too 
small to perform its vital social role, and, apparently, Members on 
both sides recognize this is a case where we have not given the 
government enough of a role in providing housing to our veterans.
  Since our veterans, of course, fought for this country and served, it 
is appropriate that we do this. What this bill does is to raise the 
loan limit to the VA, which means, of course, into this very important 
government program, the Veterans' Affairs Department being part of the 
Federal Government and being supported by tax dollars, although this is 
a program that does not need a lot of subsidy, under this bill, this 
particular government program will be expanded. It will make more 
people eligible and it will cover more homes.
  In particular, it will bring some States back into the union. In much 
of Massachusetts, in much of California, in parts of Illinois programs 
like the Veterans' Affairs housing and the FHA and others might as well 
be in Ukraine, for all the use the American citizens who live there can 
get from them because the housing prices have gone too far.
  So I am very supportive of this. It is a very important way to show 
one more example of how we appreciate what our veterans have done. It 
is a very relevant example of the times when you should expand the 
reach of government so we can provide services that the private sector 
alone would not do. Obviously, if the private sector was entirely able 
to do this on their own, there would be no need for the VA guarantee.
  This is a good example of how public and private sectors cooperate. 
It is not a case of either/or. It sets a useful precedent, too, for 
legislation that I hope we will be dealing with soon, that the 
gentleman from California (Mr. Miller) and I and others have sponsored 
to do a similar adjustment for the FHA.
  So I thank the members of the committee for this sensible recognition 
that we need to adjust programs to meet different conditions, and in 
particular, for understanding that there are times when the responsible 
thing for us to do, I hope on a unanimous basis, is to expand the role 
of the Federal Government.
  Mrs. DAVIS of California. Mr. Speaker, I yield myself such time as I 
may consume to thank my colleagues for their support of this valuable 
piece of legislation for our veterans.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  Mr. BROWN of South Carolina. Mr. Speaker, I yield myself such time as 
I may consume to commend the continued cooperation which has been so 
evident in the work of the Subcommittee on Benefits and urge my 
colleagues to support H.R. 4345.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from South Carolina (Mr. Brown) that the House suspend the 
rules and pass the bill, H.R. 4345.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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