[House Report 119-303]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-303
=======================================================================
HOMES FOR HEROES ACT
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September 18, 2025.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
----------------
Mr. Bost, from the Committee on Veterans' Affairs,
submitted the following
R E P O R T
[To accompany H.R. 2791]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to whom was referred
the bill (H.R. 2791) to amend title 38, United States Code, to
increase the maximum amount of housing loan guaranty
entitlement available to certain veterans under the laws
administered by the Secretary of Veterans Affairs, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Hearings......................................................... 4
Subcommittee Consideration....................................... 4
Committee Consideration.......................................... 4
Committee Votes.................................................. 5
Committee Correspondence.........................................
Committee Oversight Findings..................................... 5
Statement of General Performance Goals and Objectives............ 5
New Budget Authority, Entitlement Authority, and Tax Expenditures 5
Earmarks and Tax and Tariff Benefits............................. 5
Committee Cost Estimate.......................................... 5
Congressional Budget Office Estimate............................. 5
Federal Mandates Statement....................................... 7
Advisory Committee Statement..................................... 7
Constitutional Authority Statement............................... 7
Applicability to Legislative Branch.............................. 8
Statement on Duplication of Federal Programs..................... 8
Disclosure of Directed Rulemaking................................ 8
Section-by-Section Analysis of the Legislation................... 8
Changes in Existing Law Made by the Bill, as Reported............ 9
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Homes for Heroes Act''.
SEC. 2. INCREASE TO MAXIMUM AMOUNT OF HOUSING LOAN GUARANTY ENTITLEMENT
AVAILABLE TO CERTAIN VETERANS.
Clause (ii) of section 3703(a)(1)(C) of title 38, United States Code,
is amended by striking ``25 percent of the Freddie Mac conforming loan
limit'' and inserting ``37.5 percent of the Freddie Mac conforming loan
limit''.
SEC. 3. ADJUSTMENT OF FEES FOR INTEREST RATE REDUCTION REFINANCING
HOUSING LOANS GUARANTEED INSURED, OR MADE BY THE SECRETARY
OF VETERANS AFFAIRS.
The loan fee table in section 3729(b)(2) of title 38, United States
Code, is amended by striking the row in subparagraph (E) (relating to
interest rate reduction refinancing loans) and inserting the following:
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``(E)(i) Interest rate reduction refinancing loan 0.50 0.50 0.50
(closed on or after August 1, 2025, and before
December 31, 2025)
(E)(ii) Interest rate reduction refinancing loan 0.25 0.25 0.25
(closed on or after December 31, 2025, and
before December 31, 2027)
(E)(iii) Interest rate reduction refinancing loan 0.50 0.50 0.50
(closed on or after December 31, 2027, and
before October 1, 2031)
(E)(iv) Interest rate reduction refinancing loan 0.75 0.75 0.75
(closed on or after October 1, 2031, and before
December 31, 2035)
(E)(v) Interest rate reduction refinancing loan 0.50 0.50 0.50''.
(closed on or after December 31, 2035)
----------------------------------------------------------------------------------------------------------------
Purpose and Summary
H.R. 2791, the ``Homes for Heroes Act,'' was introduced by
Representative Max Miller of Ohio on April 9, 2025. The bill,
as amended, would increase the amount of entitlement for an
eligible veteran to purchase a second home through the
Department of Veterans Affairs (VA) Home Loan program, while
still allowing the veteran homeowner to keep their first home.
H.R. 3384, the ``Refinancing Relief for Veterans Act'', was
introduced by Representative Derrick Van Orden on May 14, 2025.
This bill, as amended, would reduce the fee for veterans using
the VA Home Loan program, who are utilizing an Interest Rate
Reduction Refinance Loan, (IRRRL) from 0.5% to 0.25% for two
years. To make the bill budget neutral, this bill would
increase the refinancing fee from 0.5% to 0.75% from October,
2031 until December, 2035.
Background and Need for Legislation
Section 1: Short Title
This Act may be cited as the ``Homes for Heroes Act.''
Section 2: Increase to the Maximum Amount of Housing Loan Guaranty
Entitlement Available to Certain Veterans
The VA Home Loan program offers home loans for eligible
veterans and surviving spouses with favorable terms such as
zero percent down payment requirements, and competitive
interest rates. Full entitlement for a VA home loan under
$144,000 is set at $36,000 (25% of $144,000 is $36,000) if
there is no down payment.\1\ For home loans exceeding $144,000,
VA will guarantee 25% of the loan, but the 25% will impact the
loan limit in the future and prevent many individuals from
purchasing a future home if the individual does not have
restored entitlement. For a veteran with full entitlement,
there is no cap on what VA will guarantee, so there is no max
home loan limit.
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\1\VA Loan Guaranty Service, VA Home Loan Overview.
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VA entitlement makes it possible for a veteran to have no
down payment on a VA mortgage. If a veteran has a current VA
home loan, they will have partial or reduced entitlement, which
can affect their 0% down buying power and even their ability to
get another VA loan. Current law allows veterans to restore
their full entitlement if they sell their home and pay off the
VA loan in full, or if they refinance the VA loan into a non-VA
loan and obtain a release of liability. Many veterans do not
have any remaining restored entitlement because they still own
their first home. Unfortunately, for veterans who use up all of
their entitlement in the first VA home loan, they then must
either use a non-VA loan or make up the 25% guarantee with a
down payment. This bill would allow a veteran to purchase a
second home for reasons such as relocation, while still
allowing a veteran to keep their first property. Currently,
about 3% of veterans have had more than one VA home loan
concurrently.
This section would increase VA's conforming loan limit for
the veteran's second home by 1.5 times the current rate if the
individual intends to have multiple home loans at once. The
current conforming loan limit is determined based on the county
where your future residence is located. However, having
unrestored or partial entitlement would significantly increase
how much a veteran would spend on housing costs. This bill
would make it easier for a veteran to purchase a second home
without exhausting their entitlement and having to make a large
down payment by allowing 1.5 times the conforming loan limit.
Additionally, this provision would assist servicemembers who
are relocating due to military service, but would prefer to own
a home at their duty station instead of renting. The Committee
believes that by allowing servicemembers to retain their
original home when they receive military orders at a different
location, the government is supporting servicemembers
homeownership and making it easier on a servicemember's family
to remain in that home.
Section 3: Adjustment of Fees for Interest Rate Reduction Refinancing
Housing Loans Guaranteed or Made by The Secretary of Veterans
Affairs
Since 2021, the United States has had high interest rates
for home loans, which has made it difficult for veterans to
refinance for a lower interest rate. Over the last eight
months, the interest rates have begun to decline, which has
increased the amount of savings possible for a veteran who
chose to refinance their mortgage. This section would adjust
the fees for Interest Rate Reduction Refinancing Loans (IRRRLs)
to allow veterans to access a more affordable interest rate and
a lower monthly mortgage payment. Reducing the fees for the
IRRRL would make it easier for a veteran to refinance and
reduce monthly mortgage payments. This section would also
increase the IRRRL rate to pay for this legislation and then
bring the rates down for later years. Due to the high-interest
rate environment, the Committee believes reducing the fees will
encourage the use of IRRRLs by veterans and allow them to
refinance for a mortgage with a lower interest rate and lower
monthly payment.
Hearings
On June 11, 2025, the Subcommittee on Economic Opportunity
conducted a legislative hearing on a number of bills including
H.R. 2791.
The following witnesses testified:
Dr. Liz Clark, Acting Director, Defense Support
Services, U.S. Department of Defense, Mr. Nick
Pamperin, Executive Director, Veterans Readiness and
Employment, U.S. Department of Veterans Affairs, who
was accompanied by Mr. Thomas Alphonso, Assistant
Director of Policy and Implementation, Education
Service, U.S. Department of Veterans Affairs, Mr.
Andrew Petrie, Senior Policy Analyst, Veterans
Education and Employment Division, The American Legion,
Mr. Blaze Smith, Director, Veterans Education and
Transition Center, The University of Arizona, Mr.
Matthew Schwartzman, Director, Legislation and Military
Policy, Reserve Organization of America, Ms. Ashlynne
Haycock-Lohmann, Director, Government and Legislative
Affairs, Tragedy Assistance Program for Survivors
(TAPS).
Statements for the record were submitted by:
Dr. Joseph W. Wescott, National Legislative Liaison,
National Association of State Approving Agencies
(NASAA), Mr. Will Hubbard, Vice President for Veterans
and Military Policy, Veterans Education Success (VES),
Ms. Julie Howell, Associate Legislative Director for
Governmental Relations, Paralyzed Veterans of America
(PVA), Mr. Jake Fales, Senior Policy Fellow, and Hannah
Miller, Policy and Communications Fellow, Reserve
Organization of America (ROA), Ms. Tammy Barlet, Vice
President of Government Affairs, Student Veterans of
America (SVA), Ms. Kristina Keenan, Director, National
Legislative Service, Veterans of Foreign Wars of the
United States (VFW).
Subcommittee Consideration
On Thursday, July 3, 2025, the Subcommittee on Economic
Opportunity was discharged from further consideration of this
legislation.
Committee Consideration
On July 23, 2025, the full Committee met in open markup
session, a quorum being present, to consider H.R. 2791. During
consideration of the bill, the following amendment was
considered:
An amendment in the nature of a substitute offered by
Chairman Bost of Illinois, which would offset the cost
of the bill by adjusting the dates that the IRRRL fee
is at 0.75%. This amendment in the nature of a
substitute was agreed to by voice vote.
A motion by Ranking Member Takano of California to report
H.R. 2791, as amended, favorably to the House of
Representatives, was agreed to by voice vote.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, there were no recorded votes
taken on amendments or in connection with ordering H.R. 2791 as
amended, reported to the House.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are to increase the amount of entitlement
for an individual to purchase a second home loan while keeping
their first home, as well as reducing the fees for IRRL to
allow veterans to take advantage of lower interest rates.
New Budget Authority, Entitlement Authority,
and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Earmarks and Tax and Tariff Benefits
H.R. 2791, as amended, does not contain any Congressional
earmarks, limited tax benefits, or limited tariff benefits as
defined in clause 9 of rule XXI of the Rules of the House of
Representatives.
Committee Cost Estimate
The Committee adopts as its own the cost estimate on H.R.
2791 as amended, prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Congressional Budget Office Cost Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
for H.R. 2791, as amended, provided by the Director of the
Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
H.R. 2791 would make changes to the home loan guarantee
program administered by the Department of Veterans Affairs
(VA). The costs of the program are paid from mandatory
appropriations and thus are reflected in the budget as direct
spending. CBO estimates that enacting the bill would decrease
net direct spending by $85 million over the 2025-2035 period
(see Table 1). The costs of the legislation fall within budget
function 700 (veterans benefits and services).
Subsequent Loans. VA provides loan guarantees to lenders
that allow eligible borrowers to obtain better loan terms--such
as smaller down payments and lower interest rates--to purchase,
construct, improve, or refinance a home. VA typically pays
lenders up to 25 percent of the outstanding mortgage balance if
a borrower's home is foreclosed upon. Those payments, net of
fees paid by borrowers and recoveries by lenders, constitute
the subsidy cost for the loan guarantees.\1\ CBO projects that,
on average, VA will annually guarantee 525,000 loans of roughly
$490,000 each at a subsidy rate of about 0.81 percent. Those
loan guarantees are projected to cost $21 billion over the
2026-2035 period.
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\1\Under the Federal Credit Reform Act of 1990, the subsidy cost of
a loan guarantee is the net present value of estimated payments by the
government to cover defaults and delinquencies, interest subsidies, or
other expenses offset by any payments to the government, including
origination or other fees, penalties, and recoveries on defaulted
loans. Such subsidy costs are calculated by discounting those expected
cash flows using the rate on Treasury securities of comparable
maturity. The resulting estimated subsidy costs are recorded in the
budget when the loans are disbursed or modified. A positive subsidy
indicates that the loan results in net outlays from the Treasury; a
negative subsidy indicates that the loan results in net receipts to the
Treasury.
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Subject to residency requirements, borrowers can obtain
multiple VA-guaranteed home loans. On subsequent loans, VA
typically guarantees amounts not to exceed 25 percent of the
conforming loan limit, determined annually by Freddie Mac, less
any outstanding guaranteed amounts from prior VA home loans.
Section 2 of the bill would increase the maximum amount
that VA guarantees on loans obtained by borrowers with
outstanding VA-guaranteed loans to 37.5 percent of the
conforming loan limit. Accordingly, VA would guarantee a larger
portion of subsequent loans obtained by borrowers, thereby
increasing the subsidy costs for those loans. Using its
projection of loan volume based on data provided by VA, CBO
expects that on average each year over the 2026-2035 period,
roughly 2,100 borrowers with outstanding loans would obtain
loans for which VA would guarantee an additional amount of
about $285,000 at a subsidy rate of 0.57 percent. Overall, CBO
estimates that those loan guarantees would increase direct
spending by $36 million over the 2025-2035 period.
Refinancing Loan Fee. Section 3 would modify the fee that
VA charges borrowers for certain refinancing loans. Under
current law, the fee for those loans is 0.5 percent of the loan
amount. The bill would temporarily reduce that fee to 0.25
percent from December 31, 2025, to December 31, 2027, return it
to 0.5 percent through September 30, 2031, then increase it to
0.75 percent until December 31, 2035. After that date, the fee
would return to 0.5 percent. Those fee modifications would
change the number and subsidy cost of loans guaranteed. Using
its projection of loan volume based on data provided by VA, CBO
estimates that modifying the rates as specified in the bill
would decrease net direct spending by $121 million over the
2025-2035 period. (Because an increase in the fee would reduce
the subsidy cost of the loans, such an increase would reduce
direct spending.)
TABLE 1.--ESTIMATED DIRECT SPENDING UNDER H.R. 2791
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Outlays by fiscal year, millions of dollars--
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2025- 2025-
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2030 2035
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Subsequent Loans..................................... 0 2 2 2 2 2 3 4 4 6 9 10 36
Refinancing Loan Fee................................. 0 31 75 27 0 0 0 -62 -63 -64 -65 133 -121
Total Changes.................................... 0 33 77 29 2 2 3 -58 -59 -58 -56 143 -85
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Budget authority equals outlays for all sections.
The CBO staff contact for this estimate is Paul B.A.
Holland. The estimate was reviewed by Christina Hawley Anthony,
Deputy Director of Budget Analysis.
Phillip L. Swagel,
Director, Congressional Budget Office.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates regarding H.R 2791, as amended, prepared by the
Director of the Congressional Budget Office pursuant to section
423 of the Unfunded Mandates Reform Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act would be created by H.R.
2791, as amended.
Statement of Constitutional Authority
Pursuant to Article I, section 8 of the United States
Constitution, H.R. 2791, as amended, is authorized by Congress'
power to ``provide for the common Defense and general Welfare
of the United States.''
Applicability to Legislative Branch
The Committee finds that H.R. 2791, as amended, does not
relate to the terms and conditions of employment or access to
public services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Statement on Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee finds that no provision
of H.R. 2791, as amended, establishes or reauthorizes a program
of the Federal Government known to be duplicative of another
Federal program, a program that was included in any report from
the Government Accountability Office to Congress pursuant to
section 21 of Public Law 111-139, or a program related to a
program identified in the most recent Catalog of Federal
Domestic Assistance.
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, 115th Cong. (2017),
the Committee estimates that H.R. 2791, as amended, contains no
directed rulemaking that would require the Secretary to
prescribe regulations.
Section-by-Section Analysis of the Legislation
Section 1: Short title
This section would establish the short title of the bill as
the ``Home for Heroes Act.''
Section 2: Increase to the maximum amount of housing loan guaranty
entitlement available to certain veterans
This section would amend 38 U.S.C. Sec. 3703(a)(1)(C) and
would increase the amount of entitlement available for a
veteran to purchase a second home loan while keeping their
first home. The section would also increase the amount of home
loan entitlement that a veteran would be allowed on their
second home if the veteran has an unrestored entitlement to
37.5% of the Freddie Mac conforming loan limit, instead of 25%
of the Freddie Mac conforming loan limit.
Section 3: Adjustment of fees for interest rate reduction refinancing
housing loans guaranteed or made by the Secretary of Veterans
Affairs
This section would amend 38 U.S.C. Sec. 3739(b)(2) by
striking subparagraph (E) and inserting a table for the IRRRL
fees. The new table would reduce the home loan mortgage
refinancing fee for VA home loans from .5% to .25% between
December 31, 2025, to December 31, 2027, to make it less
expensive for veterans to refinance. Finally, the bill, as
amended, would offset the decreased IRRRL fees between 2025-
2027 by increasing the refinancing fee from .5% to .75% from
October 1, 2031, to December 31, 2035.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
TITLE 38, UNITED STATES CODE
* * * * * * *
PART III--READJUSTMENT AND RELATED BENEFITS
* * * * * * *
CHAPTER 37--HOUSING AND SMALL BUSINESS LOANS
SUBCHAPTER I--GENERAL
* * * * * * *
Sec. 3703. Basic provisions relating to loan guaranty and insurance
(a)(1)(A) Any loan to a veteran eligible for benefits under
this chapter, if made for any of the purposes specified in
section 3710 of this title and in compliance with the
provisions of this chapter, is automatically guaranteed by the
United States in an amount not to exceed the lesser of--
(i)(I) in the case of any loan of not more than
$45,000, 50 percent of the loan;
(II) in the case of any loan of more than $45,000,
but not more than $56,250, $22,500;
(III) except as provided in subclause (IV) of this
clause, in the case of any loan of more than $56,250,
the lesser of $36,000 or 40 percent of the loan; or
(IV) in the case of any loan of more than $144,000
for a purpose specified in clause (1), (2), (3), (5),
(6), or (8) of section 3710(a) of this title, 25
percent of the loan; or
(ii) the maximum amount of guaranty entitlement
available to the veteran as specified in subparagraph
(B) or (C).
(B) With respect to loans described in subclauses (I), (II),
or (III) of subparagraph (A)(i), the maximum amount of guaranty
entitlement available to a veteran for purposes specified in
section 3710 of this title shall be $36,000, reduced by the
amount of entitlement previously used by the veteran under this
chapter and not restored as a result of the exclusion in
section 3702(b) of this title.
(C)(i) With respect to loans described in subclause (IV) of
subparagraph (A)(i) made to a veteran not covered by clause
(ii), the maximum amount of guaranty entitlement available to
the veteran shall be 25 percent of the loan.
(ii) With respect to loans described in subclause (IV) of
subparagraph (A)(i) made to a covered veteran, the maximum
amount of guaranty entitlement available to the veteran shall
be [25 percent of the Freddie Mac conforming loan limit] 37.5
percent of the Freddie Mac conforming loan limit , reduced by
the amount of entitlement previously used by the veteran under
this chapter and not restored as a result of the exclusion in
section 3702(b) of this title.
(iii) In this subparagraph:
(I) The term ``covered veteran'' means a veteran who
has previously used entitlement under this chapter and
for whom the full amount of entitlement so used has not
been restored as a result of the exclusion in section
3702(b) of this title.
(II) The term ``Freddie Mac conforming loan limit''
means the limit 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.
(2)(A) Any housing loan which might be guaranteed under the
provisions of this chapter, when made or purchased by any
financial institution subject to examination and supervision by
any agency of the United States or of any State may, in lieu of
such guaranty, be insured by the Secretary under an agreement
whereby the Secretary will reimburse any such institution for
losses incurred on such loan up to 15 per centum of the
aggregate of loans so made or purchased by it.
(B) Loans insured under this section shall be made on such
other terms, conditions, and restrictions as the Secretary may
prescribe within the limitations set forth in this chapter.
(b) The liability of the United States under any guaranty,
within the limitations of this chapter, shall decrease or
increase pro rata with any decrease or increase of the amount
of the unpaid portion of the obligation.
(c)(1) Loans guaranteed or insured under this chapter shall
be payable upon such terms and conditions as may be agreed upon
by the parties thereto, subject to the provisions of this
chapter and regulations of the Secretary issued pursuant to
this chapter, and shall bear interest not in excess of such
rate as the Secretary may from time to time find the loan
market demands, except that in establishing the rate of
interest that shall be applicable to such loans, the Secretary
shall consult with the Secretary of Housing and Urban
Development regarding the rate of interest applicable to home
loans insured under section 203(b) of the National Housing Act
(12 U.S.C. 1709(b)). In establishing rates of interest under
this paragraph for one or more of the purposes described in
clauses (4) and (7) of section 3710(a) of this title, the
Secretary may establish a rate or rates higher than the rate
specified for other purposes under such section, but any such
rate may not exceed such rate as the Secretary may from time to
time find the loan market demands for loans for such purposes.
(2) The provisions of the Servicemen's Readjustment Act of
1944 which were in effect before April 1, 1958, with respect to
the interest chargeable on loans made or guaranteed under such
Act shall, notwithstanding the provisions of paragraph (1) of
this subsection, continue to be applicable--
(A) to any loan made or guaranteed before April 1,
1958; and
(B) to any loan with respect to which a commitment to
guarantee was entered into by the Secretary before
April 1, 1958.
(3) This section shall not be construed to prohibit a veteran
from paying to a lender any reasonable discount required by
such lender, when the proceeds from the loan are to be used--
(A) to refinance indebtedness pursuant to clause (5),
(8), or (9)(B)(i) of section 3710(a) of this title or
section 3712(a)(1)(F) of this title;
(B) to repair, alter, or improve a farm residence or
other dwelling pursuant to clauses (4) and (7) of
section 3710(a) of this title;
(C) to construct a dwelling or farm residence on land
already owned or to be acquired by the veteran except
where the land is directly or indirectly acquired from
a builder or developer who has contracted to construct
such dwelling for the veteran;
(D) to purchase a dwelling from a class of sellers
which the Secretary determines are legally precluded
under all circumstances from paying such a discount if
the best interest of the veteran would be so served; or
(E) to refinance indebtedness and purchase a
manufactured-home lot pursuant to section
3710(a)(9)(B)(ii) or 3712(a)(1)(G) of this title, but
only with respect to that portion of the loan used to
refinance such indebtedness.
(4)(A) In guaranteeing or insuring loans under this chapter,
the Secretary may elect whether to require that such loans bear
interest at a rate that is--
(i) agreed upon by the veteran and the mortgagee; or
(ii) established under paragraph (1).
The Secretary may, from time to time, change the election under
this subparagraph.
(B) Any veteran, under a loan described in subparagraph
(A)(i), may pay reasonable discount points in connection with
the loan. Except in the case of a loan for the purpose
specified in section 3710(a)(8), 3710(b)(7), or 3712(a)(1)(F)
of this title, discount points may not be financed as part of
the principal amount of a loan guaranteed or insured under this
chapter.
(C) Not later than 10 days after an election under
subparagraph (A), the Secretary shall transmit to the
Committees on Veterans' Affairs of the Senate and House of
Representatives a notification of the election, together with
an explanation of the reasons therefor.
(d)(1) The maturity of any housing loan at the time of
origination shall not be more than thirty years and thirty-two
days.
(2)(A) Any loan for a term of more than five years shall be
amortized in accordance with established procedure.
(B) The Secretary may guarantee loans with provisions for
various rates of amortization corresponding to anticipated
variations in family income. With respect to any loan
guaranteed under this subparagraph--
(i) the initial principal amount of the loan may not
exceed the reasonable value of the property as of the
time the loan is made; and
(ii) the principal amount of the loan thereafter
(including the amount of all interest to be deferred
and added to principal) may not at any time be
scheduled to exceed the projected value of the
property.
(C) For the purposes of subparagraph (B) of this paragraph,
the projected value of the property shall be calculated by the
Secretary by increasing the reasonable value of the property as
of the time the loan is made at a rate not in excess of 2.5
percent per year, but in no event may the projected value of
the property for the purposes of such subparagraph exceed 115
percent of such reasonable value. A loan made for a purpose
other than the acquisition of a single-family dwelling unit may
not be guaranteed under such subparagraph.
(3)(A) Any real estate housing loan (other than for repairs,
alterations, or improvements) shall be secured by a first lien
on the realty. In determining whether a loan is so secured, the
Secretary may either disregard or allow for subordination to a
superior lien created by a duly recorded covenant running with
the realty in favor of either of the following:
(i) A public entity that has provided or will provide
assistance in response to a major disaster as
determined by the President under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5121 et seq.).
(ii) A private entity to secure an obligation to such
entity for the homeowner's share of the costs of the
management, operation, or maintenance of property,
services, or programs within and for the benefit of the
development or community in which the veteran's realty
is located, if the Secretary determines that the
interests of the veteran borrower and of the Government
will not be prejudiced by the operation of such
covenant.
(B) With respect to any superior lien described in
subparagraph (A) created after June 6, 1969, the Secretary's
determination under clause (ii) of such subparagraph shall have
been made prior to the recordation of the covenant.
(e)(1) Except as provided in paragraph (2) of this
subsection, an individual who pays a fee under section 3729 of
this title, or who is exempted under section 3729(c) of this
title from paying such fee, with respect to a housing loan
guaranteed or insured under this chapter that is closed after
December 31, 1989, shall have no liability to the Secretary
with respect to the loan for any loss resulting from any
default of such individual except in the case of fraud,
misrepresentation, or bad faith by such individual in obtaining
the loan or in connection with the loan default.
(2) The exemption from liability provided by paragraph (1) of
this subsection shall not apply to--
(A) an individual from whom a fee is collected (or
who is exempted from such fee) under section
3729(b)(2)(I) of this title; or
(B) a loan made for any purpose specified in section
3712 of this title.
(f) The application for or obtaining of a loan made, insured,
or guaranteed under this chapter shall not be subject to
reporting requirements applicable to requests for, or receipts
of, Federal contracts, grants, loans, loan guarantees, loan
insurance, or cooperative agreements except to the extent that
such requirements are provided for in, or by the Secretary
pursuant to, this title.
* * * * * * *
Sec. 3729. Loan fee
(a) Requirement of Fee.--(1) Except as provided in subsection
(c), a fee shall be collected from each person obtaining a
housing loan guaranteed, insured, or made under this chapter,
and each person assuming a loan to which section 3714 of this
title applies. No such loan may be guaranteed, insured, made,
or assumed until the fee payable under this section has been
remitted to the Secretary.
(2) The fee may be included in the loan and paid from the
proceeds thereof.
(b) Determination of Fee.--(1) The amount of the fee shall be
determined from the loan fee table in paragraph (2). The fee is
expressed as a percentage of the total amount of the loan
guaranteed, insured, or made, or, in the case of a loan
assumption, the unpaid principal balance of the loan on the
date of the transfer of the property.
(2) The loan fee table referred to in paragraph (1) is as
follows:
----------------------------------------------------------------------------------------------------------------
Type of loan Active duty veteran Reservist Other obligor
----------------------------------------------------------------------------------------------------------------
(A)(i) Initial loan described in 2.15 2.40 NA
section 3710(a) to purchase or
construct a dwelling with 0-down, or
any other initial loan described in
section 3710(a) other than with 5-
down or 10-down (closed on or after
October 1, 2004, and before January
1, 2020).
(A)(ii) Initial loan described in 2.30 2.30 NA
section 3710(a) to purchase or
construct a dwelling with 0-down, or
any other initial loan described in
section 3710(a) other than with 5-
down or 10-down (closed on or after
January 1, 2020, and before April 7,
2023).
(A)(iii) Initial loan described in 2.15 2.15 NA
section 3710(a) to purchase or
construct a dwelling with 0-down, or
any other initial loan described in
section 3710(a) other than with 5-
down or 10-down (closed on or after
April 7, 2023, and before June 9,
2034).
(A)(iv) Initial loan described in 1.40 1.40 NA
section 3710(a) to purchase or
construct a dwelling with 0-down, or
any other initial loan described in
section 3710(a) other than with 5-
down or 10-down (closed on or after
June 9, 2034).
(B)(i) Subsequent loan described in 3.30 3.30 NA
section 3710(a) to purchase or
construct a dwelling with 0-down, or
any other subsequent loan described
in section 3710(a) (closed on or
after October 1, 2004, and before
January 1, 2020).
(B)(ii) Subsequent loan described in 3.60 3.60 NA
section 3710(a) to purchase or
construct a dwelling with 0-down, or
any other subsequent loan described
in section 3710(a) (closed on or
after January 1, 2020, and before
April 7, 2023).
(B)(iii) Subsequent loan described in 3.30 3.30 NA
section 3710(a) to purchase or
construct a dwelling with 0-down, or
any other subsequent loan described
in section 3710(a) (closed on or
after April 7, 2023, and before June
9, 2034).
(B)(iv) Subsequent loan described in 1.25 1.25 NA
section 3710(a) to purchase or
construct a dwelling with 0-down, or
any other subsequent loan described
in section 3710(a) (closed on or
after June 9, 2034).
(C)(i) Loan described in section 1.50 1.75 NA
3710(a) to purchase or construct a
dwelling with 5-down (closed before
January 1, 2020).
(C)(ii) Loan described in section 1.65 1.65 NA
3710(a) to purchase or construct a
dwelling with 5-down (closed on or
after January 1, 2020, and before
April 7, 2023).
(C)(iii) Loan described in section 1.50 1.50 NA
3710(a) to purchase or construct a
dwelling with 5-down (closed on or
after April 7, 2023, and before June
9, 2034).
(C)(iv) Loan described in section 0.75 0.75 NA
3710(a) to purchase or construct a
dwelling with 5-down (closed on or
after June 9, 2034).
(D)(i) Loan described in section 1.25 1.50 NA
3710(a) to purchase or construct a
dwelling with 10-down (closed before
January 1, 2020).
(D)(ii) Loan described in section 1.40 1.40 NA
3710(a) to purchase or construct a
dwelling with 10-down (closed on or
after January 1, 2020, and before
April 7, 2023).
(D)(iii) Loan described in section 1.25 1.25 NA
3710(a) to purchase or construct a
dwelling with 10-down (closed on or
after April 7, 2023, and before June
9, 2034).
(D)(iv) Loan described in section 0.50 0.50 NA
3710(a) to purchase or construct a
dwelling with 10-down (closed on or
after June 9, 2034).
[(E) Interest rate reduction 0.50] 0.50] NA]
refinancing loan].
(E)(i) Interest rate reduction 0.50 0.50 0.50
refinancing loan (closed on or after
August 1, 2025, and before December
31, 2025).
(E)(ii) Interest rate reduction 0.25 0.25 0.25
refinancing loan (closed on or after
December 31, 2025, and before
December 31, 2027) 0.250.25.
(E)(iii) Interest rate reduction 0.50 0.50 0.50
refinancing loan (closed on or after
December 31, 2027, and before
October 1, 2031).
(E)(iv) Interest rate reduction 0.75 0.75 0.75
refinancing loan (closed on or after
October 1, 2031, and before December
31, 2035) .
(E)(v) Interest rate reduction 0.50 0.50 0.50
refinancing loan (closed on or after
December 31, 2035) .
(F) Direct loan under section 3711... 1.00 1.00 NA
(G) Manufactured home loan under 1.00 1.00 NA
section 3712 (other than an interest
rate reduction refinancing loan).
(H) Loan to Native American veteran 1.25 1.25 NA
under section 3762 (other than an
interest rate reduction refinancing
loan).
(I) Loan assumption under section 0.50 0.50 0.50
3714.
(J) Loan under section 3733(a)....... 2.25 2.25 2.25.
----------------------------------------------------------------------------------------------------------------
(3) Any reference to a section in the ``Type of loan'' column
in the loan fee table in paragraph (2) refers to a section of
this title.
(4) For the purposes of paragraph (2):
(A) The term ``active duty veteran'' means any
veteran eligible for the benefits of this chapter other
than a Reservist.
(B) The term ``Reservist'' means a veteran described
in section 3701(b)(5)(A) of this title who is eligible
under section 3702(a)(2)(E) of this title.
(C) The term ``other obligor'' means a person who is
not a veteran, as defined in section 101 of this title
or other provision of this chapter.
(D)(i) The term ``initial loan'' means a loan to a
veteran guaranteed under section 3710 or made under
section 3711 of this title if the veteran has never
obtained a loan guaranteed under section 3710 or made
under section 3711 of this title.
(ii) If a veteran has obtained a loan guaranteed
under section 3710 or made under section 3711 of this
title and the dwelling securing such loan was
substantially damaged or destroyed by a major disaster
declared by the President under section 401 of the
Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5170), the Secretary shall
treat as an initial loan, as defined in clause (i), the
next loan the Secretary guarantees or makes to such
veteran under section 3710 or 3711, respectively, if--
(I) such loan is guaranteed or made before
the date that is three years after the date on
which the dwelling was substantially damaged or
destroyed; and
(II) such loan is only for repairs or
construction of the dwelling, as determined by
the Secretary.
(E) The term ``subsequent loan'' means a loan to a
veteran, other than an interest rate reduction
refinancing loan, guaranteed under section 3710 or made
under section 3711 of this title that is not an initial
loan.
(F) The term ``interest rate reduction refinancing
loan'' means a loan described in section 3710(a)(8),
3710(a)(9)(B)(i), 3710(a)(11), 3712(a)(1)(F), or
3762(h) of this title.
(G) The term ``0-down'' means a downpayment, if any,
of less than 5 percent of the total purchase price or
construction cost of the dwelling.
(H) The term ``5-down'' means a downpayment of at
least 5 percent or more, but less than 10 percent, of
the total purchase price or construction cost of the
dwelling.
(I) The term ``10-down'' means a downpayment of 10
percent or more of the total purchase price or
construction cost of the dwelling.
(c) Waiver of Fee.--(1) A fee may not be collected under this
section from a veteran who is receiving compensation (or who,
but for the receipt of retirement pay or active service pay,
would be entitled to receive compensation), from a surviving
spouse of any veteran (including a person who died in the
active military, naval, air, or space service) who died from a
service-connected disability, or from a member of the Armed
Forces who is serving on active duty and who provides, on or
before the date of loan closing, evidence of having been
awarded the Purple Heart.
(2)(A) A veteran described in subparagraph (B) shall be
treated as receiving compensation for purposes of this
subsection as of the date of the rating described in such
subparagraph without regard to whether an effective date of the
award of compensation is established as of that date.
(B) A veteran described in this subparagraph is a veteran who
is rated eligible to receive compensation--
(i) as the result of a pre-discharge disability
examination and rating; or
(ii) based on a pre-discharge review of existing
medical evidence (including service medical and
treatment records) that results in the issuance of a
memorandum rating.
* * * * * * *
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