To amend title 38, United States Code, relating to veterans housing programs, and for other purposes.

SECTION 1. ELIGIBILITY.

    (a) Reservists Discharged Because of a Service-Connected 
Disability.--Section 3701(b)(5)(A) of title 38, United States Code, is 
amended--
            (1) by inserting ``(i)'' before ``who has''; and
            (2) by striking out the period at the end thereof and 
        inserting in lieu thereof ``, or (ii) who was discharged or 
        released from the Selected Reserve before completing 6 years of 
        service because of a service-connected disability.''.
    (b) Surviving Spouses of Reservists Who Died While in Active 
Military, Naval, or Air Service.--The second sentence of section 
3701(b)(2) of such title is amended--
            (1) by inserting ``or service in the Selected Reserve'' 
        after ``duty'' each place it appears; and
            (2) by striking out ``spouse shall'' and inserting in lieu 
        thereof ``deceased spouse shall''.

SEC. 2. PUBLIC AND COMMUNITY WATER AND SEWERAGE SYSTEMS.

    Section 3704 of title 38, United States Code, is amended--
            (1) by striking out subsection (e); and
            (2) by redesignating subsections (f) and (g) as subsections 
        (e) and (f), respectively.

SEC. 3. REFINANCING LOANS.

    (a) Authority To Guarantee Home Refinance Loans for Energy 
Efficiency Improvements.--
            (1) Loans.--(A) Section 3710(a) of title 38, United States 
        Code, is amended by adding after paragraph (10) the following:
            ``(11) To refinance in accordance with subsection (e) of 
        this section an existing loan guaranteed, insured, or made 
        under this chapter, and to improve the dwelling securing such 
        loan through energy efficiency improvements, as provided in 
        subsection (d) of this section.''.
            (B) Section 3710(e)(1) of such title is amended by 
        inserting ``or subsection (a)(11)'' after ``subsection 
        (a)(8)''.
            (2) Fee.--Section 3729(a)(2)(E) of such title is amended by 
        inserting ``3710(a)(11),'' after ``3710(a)(9)(B)(i),''.
    (b) Refinancing Adjustable Rate Mortgages to Fixed Rate 
Mortgages.--Section 3710(e)(1)(A) of such title is amended--
            (1) by inserting ``(i)'' after ``(A);
            (2) by inserting ``or'' at the end of clause (i), as 
        designated by paragraph (1) of this subsection; and
            (3) by adding after such clause (i), the following:
            ``(ii) the loan bears interest at a fixed rate that is 
        agreed upon by the veteran and the mortgagee, and the loan 
        being refinanced is an adjustable rate loan.''.

SEC. 4. MANUFACTURED HOME LOAN INSPECTIONS.

    (a) Certification of Conformity With Standards.--Section 3712(h) of 
title 38, United States Code, is amended by amending paragraph (2) to 
read as follows:
    ``(2) Any manufactured housing unit properly displaying a 
certification of conformity to all applicable Federal manufactured home 
construction and safety standards pursuant to section 616 of the 
National Manufactured Housing Construction and Safety Standards Act of 
1974 (42 U.S.C. 5415) shall be deemed to meet the standards required by 
paragraph (1) of this subsection.''.
    (b) Repeal of Inspection Requirements.--Section 3712(j) of such 
title is amended--
            (1) by striking out ``refuses to permit the inspections 
        provided for in subsection (h) of this section; or in the case 
        of manufactured homes which are determined by the Secretary not 
        to conform to the aforesaid standards; or where the 
        manufacturer of manufactured homes''; and
            (2) by striking ``warranty.'' and inserting in lieu thereof 
        ``warranty; in the case of manufactured homes which are 
        determined by the Secretary not to conform to the standards 
        provided for in subsection (h) of this section; or in the case 
        of a manufacturer who has engaged in procedures or practices 
        determined by the Secretary to be unfair or prejudicial to 
        veterans or the Government.''.
    (c) Elimination of Reporting Requirement.--Section 3712(l) of such 
title is amended--
            (1) by striking out ``the results of inspections required 
        by subsection (h) of this section,''; and
            (2) by striking out ``section, and'' and inserting in lieu 
        thereof ``section and''.

SEC. 5. PROCEDURES ON DEFAULT.

    (a) In General.--Paragraph (7) of section 3732(c) of title 38, 
United States Code, is amended--
            (1) by striking out ``that was the minimum amount for 
        which, under applicable State law, the property was permitted 
        to be sold at the liquidation sale'' in the matter preceding 
        subparagraph (A);
            (2) by striking out ``the Secretary may accept conveyance 
        of the property to the United States for a price not 
        exceeding'' and inserting in lieu thereof ``(i) the amount was 
        the minimum amount for which, under applicable State law, the 
        property was permitted to be sold at the liquidation sale, the 
        holder shall have the option to convey the property to the 
        United States in return for payment by the Secretary of an 
        amount equal to'';
            (3) by striking out ``and'' at the end of clause (i), as so 
        designated by paragraph (2), and inserting in lieu thereof 
        ``or'';
            (4) by adding after such clause (i) the following:
            ``(ii) there was no minimum amount for which the property 
        had to be sold at the liquidation sale under applicable State 
        law, the holder shall have the option to convey the property to 
        the United States in return for payment by the Secretary of an 
        amount equal to the lesser of such net value or total 
        indebtedness; and''; and
            (5) in subparagraph (B), by striking out ``paragraph 
        (6)(B)'' and inserting in lieu thereof ``paragraph (6)''.
    (b) Conforming Amendment.--Paragraph (6) of such section is 
amended--
            (1) by striking out ``either''; and
            (2) by striking out ``sale or acquires'' and all that 
        follows through ``(B) the'' and inserting in lieu thereof 
        ``sale, the''.

SEC. 6. MINIMUM ACTIVE-DUTY SERVICE REQUIREMENT.

    Section 5303A(b)(3) of title 38, United States Code, is amended--
            (1) by striking out ``or'' at the end of subparagraph (E);
            (2) by striking out the period at the end of subparagraph 
        (F) and inserting in lieu thereof ``; or''; and
            (3) by inserting after subparagraph (F) the following:
                    ``(G) to benefits under chapter 37 of this title by 
                reason of discharge or release from active duty as a 
                result of a reduction in force, as determined by the 
                Secretary of the military department concerned in 
                accordance with regulations prescribed by the Secretary 
                of Defense or by the Secretary of Transportation with 
                respect to the Coast Guard when it is not operating as 
                a service in the Navy.''.

            Passed the House of Representatives August 1, 1994.

            Attest:

                                           DONNALD K. ANDERSON,

                                                                 Clerk.

Summary: Makes eligible for the veterans' housing loan program: (1) members of the Selected Reserve discharged or released before completion of six years of service because of a service-connected disability. And (2) surviving spouses of reservists who die while on active duty. Repeals a Federal provision prohibiting guaranteed housing loans to veterans for property not served by a public or adequate community water and sewage system. Authorizes the Secretary of Veterans Affairs to guarantee to refinance loans of veterans making energy efficiency improvements. Allows for the charging of a guaranteed housing loan fee for such loan. Provides for the guaranteeing of refinance loans made to change a mortgage from an adjustable to a fixed rate. Provides authority for guaranteeing loans made to purchase a manufactured home if the home displays a certification of conformity with Federal manufactured home construction and safety standards. Repeals certain inspection requirements with respect to such manufactured homes, as well as a reporting requirement concerning such inspections. Revises certain default procedures with respect to guaranteed housing loans. Excludes from certain minimum active-duty service requirements, for purposes of eligibility for veterans' guaranteed housing loans, those veterans whose discharge or release from active duty was the result of a reduction in force.