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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1611 Introduced in House (IH)]

104th CONGRESS
  1st Session
                                H. R. 1611

 To amend title 38, United States Code, to authorize the Secretary of 
Veterans Affairs to assist in alleviating housing shortages for active 
duty personnel through interest rate buy downs, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 11, 1995

Mr. Montgomery introduced the following bill; which was referred to the 
  Committee on Veterans' Affairs, and in addition to the Committee on 
 National Security, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
 To amend title 38, United States Code, to authorize the Secretary of 
Veterans Affairs to assist in alleviating housing shortages for active 
duty personnel through interest rate buy downs, and for other purposes.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. AUTHORITY OF THE SECRETARY OF VETERANS AFFAIRS TO MAKE 
              CERTAIN MORTGAGE ASSISTANCE PAYMENTS.

    (a) Authority.--Chapter 37 of title 38, United States Code, is 
amended by inserting after section 3707 the following:
``Sec. 3708. Authority to buy down interest rates
    ``(a) In order to enable the purchase of housing in areas where the 
supply of suitable military housing is inadequate, the Secretary may 
make periodic assistance payments on behalf of an eligible veteran for 
the purpose of buying down the interest rate on a loan to that veteran 
that is guaranteed under this chapter for a purpose described in 
paragraph (1), (2), (3), (6), or (10) of section 3710(a).
    ``(b) An individual is an eligible veteran for the purposes of this 
section if--
            ``(1) the individual is a veteran, as defined in section 
        3701(a)(4) of this title, or is on active Guard and Reserve 
        duty, as defined by section 101(d) of title 10;
            ``(2) the individual submits an application for a loan 
        guaranteed under this chapter within one year of an assignment 
        of the individual to duty at a military installation in the 
        United States designated by the Secretary concerned as a 
        housing shortage area;
            ``(3) at the time the loan referred to in subsection (a) is 
        made, the individual is an enlisted member, warrant officer, or 
        an officer (other than a warrant officer) at a pay grade of O-3 
        or below;
            ``(4) the individual has not previously used any of the 
        individual's entitlement to housing loan benefits under this 
        chapter; and
            ``(5) the individual receives comprehensive prepurchase 
        counseling from the Secretary before making application for a 
        loan guaranteed under this chapter.
    ``(c) Loans with respect to which the Secretary may exercise the 
buy down authority under subsection (a) shall--
            ``(1) provide for a buy down period of not more than three 
        years in duration;
            (2) specify the maximum and likely amounts of increases in 
        mortgage payments that the loans would require; and
            ``(3) be subject to such other terms and conditions as the 
        Secretary may prescribe by regulation.
    ``(d) The Secretary shall promulgate underwriting standards for 
loans for which the interest rate assistance payments may be made under 
subsection (a). Such standards shall be based on the interest rate for 
the second year of the loan.
    ``(e) The Secretary shall provide comprehensive prepurchase 
counseling to eligible veterans explaining the features of interest 
rate buy downs under subsection (a), including a hypothetical payment 
schedule that displays the increases in monthly payments to the 
mortgagor over the first five years of the mortgage term. For the 
purposes of this subsection, the Secretary may assign personnel to 
military installations referred to in subsection (b)(2).
    ``(f) There is authorized to be appropriated $6,000,000 annually to 
carry out this section.''.
    (b) Clerical Amendments.--The table of sections at the beginning of 
chapter 37 of title 38, United States Code, is amended by inserting 
after the item relating to section 3707 to following new item:

``3708. Authority to buy down interest rates.''.
SEC. 2. AUTHORITY OF THE SECRETARY OF DEFENSE IN PROVIDING HOUSING IN 
              HOUSING SHORTAGE AREAS.

    (a) Reimbursement for Buy Down Costs.--The Secretary of Defense 
shall reimburse the Secretary of Veterans Affairs for amounts paid by 
the Secretary of Veterans Affairs to mortgagees under section 3708 of 
title 38, United States Code.
    (b) Mortgage Indemnity.--The Secretary of Defense, in accordance 
with regulations which the Secretary shall prescribe, is authorized to 
indemnify a lender who makes a loan which is subject to such section 
3708. The amount of indemnification with respect to any such loan may 
not exceed the difference between the actual loss on the sale of the 
property subject to the loan and the amount of the United States 
guarantee or insurance on such loan.
    (c) Agreement Between the Secretary of Defense and the Secretary of 
Veterans Affairs.--The Secretary of Defense and the Secretary of 
Veterans Affairs may enter into an agreement related to carrying out 
this section and section 3708 of title 38, United States Code. The 
agreement may include provisions for the transfer by the Secretary of 
Defense of its property management jurisdiction to the Secretary of 
Veterans Affairs with respect to such sections.
    (d) Authorization of Appropriations.--There is authorized to be 
appropriated $104,000,000 annually to carry out this section.
                                 <all>
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