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[Senate Hearing 109-1069]
[From the U.S. Government Publishing Office]

                                                       S. Hrg. 109-1069

 
                 MEETING THE HOUSING NEEDS OF VETERANS

=======================================================================

                                HEARING

                               before the

               SUBCOMMITTEE ON HOUSING AND TRANSPORTATION

                                 of the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   ON

    BETTER UNDERSTANDING OF THE EXISTING VETERANS HOUSING PROGRAMS, 
  VETERANS HOMEOWNERSHIP, AND EXAMINING THE PROGRAMS THAT SERVICE THE 
                   UNIQUE NEEDS OF HOMELESS VETERANS

                               __________

                       WEDNESDAY, AUGUST 2, 2006

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs

Available at: http://www.access.gpo.gov/congress/senate/senate05sh.html

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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  RICHARD C. SHELBY, Alabama, Chairman
ROBERT F. BENNETT, Utah              PAUL S. SARBANES, Maryland
WAYNE ALLARD, Colorado               CHRISTOPHER J. DODD, Connecticut
MICHAEL B. ENZI, Wyoming             TIM JOHNSON, South Dakota
CHUCK HAGEL, Nebraska                JACK REED, Rhode Island
RICK SANTORUM, Pennsylvania          CHARLES E. SCHUMER, New York
JIM BUNNING, Kentucky                EVAN BAYH, Indiana
MIKE CRAPO, Idaho                    THOMAS R. CARPER, Delaware
JOHN E. SUNUNU, New Hampshire        DEBBIE STABENOW, Michigan
ELIZABETH DOLE, North Carolina       ROBERT MENENDEZ, New Jersey
MEL MARTINEZ, Florida

             Kathleen L. Casey, Staff Director and Counsel
     Steven B. Harris, Democratic Staff Director and Chief Counsel
   Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator
                       George E. Whittle, Editor
                                 ------                                

               Subcommittee on Housing and Transportation

                    WAYNE ALLARD, Colorado, Chairman
                JACK REED, Rhode Island, Ranking Member
RICK SANTORUM, Pennsylvania          DEBBIE STABENOW, Michigan
ELIZABETH DOLE, North Carolina       ROBERT MENENDEZ, New Jersey
MICHAEL B. ENZI, Wyoming             CHRISTOPHER J. DODD, Connecticut
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
MEL MARTINEZ, Florida                CHARLES E. SCHUMER, New York
RICHARD C. SHELBY, Alabama

                    Tewana Wilkerson, Staff Director

                            C O N T E N T S

                              ----------                              

                         TUESDAY, JULY 25, 2006

                                                                   Page

Opening statement of Chairman Allard.............................     1

Opening statements, comments, or prepared statements of:
    Senator Reed.................................................     5
    Senator Carper...............................................    10
    Senator Menendez.............................................    10
        Prepared statement.......................................    35

                               WITNESSES

Mark Johnston, Deputy Assistant Secretary for Special Needs 
  Assistance Programs, Department of Housing and Urban 
  Development....................................................     3
    Prepared Statement...........................................    35
    Response to written questions of:
        Senator Reed.............................................    50
Keith Pedigo, Director of Loan Guaranty, Department of Veterans 
  Affairs........................................................     6
    Prepared Statement...........................................    36
Peter Dougherty, Director of Homeless Veterans Programs, 
  Department of Veterans Affairs.................................     7
    Prepared Statement...........................................    38
Cheryl Beversdorf, Chief Executive Officer, National Coalition 
  for Homeless Veterans..........................................    23
    Prepared Statement...........................................    43
Barbara Banaszynski, Director of Program Development, Volunteers 
  of America.....................................................    25
    Prepared Statement...........................................    46

                 MEETING THE HOUSING NEEDS OF VETERANS

                              ----------                              

                       WEDNESDAY, AUGUST 2, 2006

                               U.S. Senate,
  Committee on Banking, Housing, and Urban Affairs,
                Subcommittee on Housing and Transportation,
                                                    Washington, DC.
    The Subcommittee met at 2:31 p.m., in Room 538, Dirksen 
Senate Office Building, Hon. Wayne Allard, Chairman of the 
Subcommittee, presiding.

              OPENING STATEMENT OF SENATOR ALLARD

    Senator Allard. Today the Housing and Transportation 
Subcommittee convenes to hold a hearing on meeting the housing 
needs of veterans.
    While every member of the Senate has veteran constituents, 
this is particularly important to Colorado. The Fifth 
Congressional District, located in Colorado Springs, has the 
Nation's highest concentration of veterans.
    Veterans embody some of America's highest ideals, including 
duty, honor, courage, commitment and self-sacrifice.
    In recognition of their service to our nation, we have 
provided them with certain benefits such as education and home 
ownership opportunities. These benefits have been important for 
veterans and their families.
    Many families might not own a home today but it has not 
been for the VA Home Loan Guaranty Program.
    The Federal Government also operates programs designed to 
meet the housing needs of homeless veterans. While these 
programs are not created specifically as a benefit for military 
service, they have evolved as a more effective and efficient 
way to prevent and end homelessness among veterans. 
Homelessness is tragic, but particularly so among those who 
nobly served their country.
    This Committee has not conducted a hearing on veterans 
housing issues in some time and I believe it is long overdue. 
Under Rule 25 of the Standing Rules of the Senate, the 
Committee on Banking, Housing and Urban Affairs has 
jurisdiction of public and private housing, including veterans 
housing. While this jurisdiction may come as a surprise to 
some, I believe that veterans housing is a very important area 
and as Subcommittee Chairmen, I intend to become active on the 
matter.
    Today's hearing is intended as an opportunity for members 
to better understand the existing veterans housing programs.
    On the first panel, we will hear from the individuals who 
administer these very important programs. Our first witness on 
that panel will be Mr. Mark Johnston, Deputy Assistant 
Secretary for Special Needs Assistance Programs at the 
Department of Housing and Urban Development. In this capacity, 
he runs the homeless assistance programs at HUD, which serve 
many veterans. He is also active in HUD's interagency efforts 
on homelessness.
    Mr. Johnston has been a friend of this Subcommittee and I 
would like to publicly acknowledge him for the technical 
assistance he has provided to me and to the Subcommittee staff, 
particularly on homeless consolidation.
    Our second witness will be Mr. Keith Pedigo, Director of 
Loan Guaranty at the Department of Veterans Affairs. This 
important program has allowed millions of veterans to become 
homeowners. Given the recent focus of the Subcommittee on the 
FHA Loan Guaranty Programs, we will be interested to hear about 
the ways in which the VA program is similar and different from 
VHA.
    Our final witness on the panel will be Mr. Peter Dougherty, 
Director of Homeless Veterans Programs at the Department of 
Veterans Affairs. Mr. Dougherty administers a number of 
different programs designed to meet the unique needs of 
homeless veterans.
    The Subcommittee will be eager to understand the improved 
outcomes that can be obtained through specialty veteran 
targeted programs.
    Before I turn to the second panel, I would like also to 
acknowledge the work of a number of other Government agencies. 
Homelessness is a multifaceted problem requiring multiple 
solutions. Many agencies, including the Department of 
Education, the Department of Health and Human Services and 
others are working to prevent and end homelessness. Some 
departments, such as the Department of Labor, even has specific 
programs designed to meet the needs of homeless veterans.
    While these programs might not be under our jurisdiction, I 
would like to take this opportunity to commend them for their 
work. Clearly, their programs have an important nexus with the 
homeless veteran housing programs as we are discussing today.
    On our second panel, we will hear from two individuals who 
run nonprofits that utilize the Federal Government programs to 
assist veterans. First, we will hear from Ms. Cheryl 
Beversdorf, who is the Chief Executive Officer of the National 
Coalition for Homeless Veterans. The coalition represents over 
250 member organizations and is active in the effort to end 
homelessness among our Nation's veterans.
    Finally, we will hear testimony from Ms. Barbara 
Banaszynski, who is Director of Program Development for the 
Volunteers of America. Volunteers of America is a faith-based 
nonprofit that provides a range of services including housing, 
mental and physical health services and case management to 
veterans in need.
    I would like to thank both panels of witnesses for being 
here today. Your testimony will help us better understand the 
existing program for meeting veterans housing needs, as well as 
ways in which these programs might be improved.
    Finally, I would like to note that I have had the good 
fortune to also work with Senator Reed, my ranking member, on 
the Armed Services Committee. In fact, we also used to share an 
Armed Services Subcommittee as chairman and ranking member.
    Through our service together on the Armed Services 
Committee, I know that Senator Reed shares my strong commitment 
to our men and women in uniform. I am confident that we will 
carry that over to our Nation's veterans as we examine ways to 
meet their housing needs.
    I look forward to working with Senator Reed and my other 
colleagues as we delve into this issue.
    As I mentioned--okay.
    Senator Reed will be joining us later. He may have an 
opening statement that he would like to make. We will go ahead 
and give him an opportunity to do that when he shows up.
    In the meantime, I am going to go ahead and proceed with 
the panel. There might be other members that will show up this 
afternoon. We will start with panel Number 1.
    Mr. Johnston, we will have you go first from HUD and then 
we will go to Keith Pedigo of VA Loan Guaranty, and then Peter 
Dougherty of VA Homeless Programs, if you would. And then we 
will go through a question and answer period right after the 
panel, and then go on to the second panel. We will probably 
spend most of the afternoon working with the first panel before 
we go to the second panel.
    Mr. Mark Johnston, would you like to start off your 
testimony?

         STATEMENT OF MARK JOHNSTON, DEPUTY ASSISTANT 
SECRETARY FOR SPECIAL NEEDS ASSISTANCE PROGRAMS, DEPARTMENT OF 
                 HOUSING AND URBAN DEVELOPMENT

    Mr. Johnston. Thank you. Chairman Allard, I am pleased to 
be here on the behalf of Secretary Alphonso Jackson and the 
U.S. Department of Housing and Urban Development.
    The Secretary recognizes the responsibility America has to 
its veterans, especially to those who are homeless. It is 
estimated that veterans account for approximately one-quarter 
of the homeless population.
    For the past 20 years, HUD has served homeless veterans, as 
well as other homeless subgroups. To better serve the homeless, 
in 1994 HUD developed the Continuum of Care Planning and Grant 
Process, which calls for communities to develop local plans to 
solve homelessness. Continuum of Care is a community led effort 
that involves a diverse group of organizations, including State 
and local Governments, public housing agencies, nonprofit 
providers, foundations, and homeless and formerly homeless 
persons.
    Continuums have been proven to be effective in coordinating 
the effort to fight homelessness. Among the reasons for their 
effectiveness are the broad-based partnerships they have forged 
at the local level. HUD is committed, through continuum of 
care, to ending chronic homelessness.
    To underscore HUD's continued commitment to serve homeless 
veterans, this year's Continuum of Care application encourages 
organizations that represent homeless veterans to be at the 
planning table and require that communities identify the number 
of homeless persons who are veterans so that each community can 
more effectively address their needs.
    In 2005, HUD awarded nearly $1.3 billion in targeted 
homeless assistance. Homeless veterans are eligible for all of 
the Department's homeless assistance programs. HUD awarded 
funding to 90 percent of all of the veteran specific 
applications received. HUD has also established a veteran 
resource center in consultation with National Veterans Service 
Organizations. HUDVET's goal is to provide veterans and their 
family members with information on HUD's community-based 
programs and services.
    HUD is also involved with a number of interagency 
initiatives that focus on solving homelessness, including for 
homeless veterans. One of these initiatives in which HUD is 
involved is the VA's Secretarial Advisory Committee on Homeless 
Veterans, an important advisory group that has addressed 
chronic homelessness among veterans.
    HUD is also involved with the Collaborative Initiative to 
Help End Chronic Homelessness, a joint initiative with HUD, VA 
and the Department of Health and Human Services. HUD provided 
the housing needed for homeless persons, while the VA and HHS 
provided the needed supportive services to help them stabilize 
their lives.
    In consultation with the U.S. Interagency Council on 
Homelessness, chaired by Secretary Jackson, HUD developed a 
special initiative to help persons who have been homeless for 
years and are also chronically inebriated. HUD provided funding 
for permanent housing and community partners provided the 
needed supportive services. Homeless veterans are among those 
served by these homeless initiatives.
    In addition to these initiatives, HUD participates in 
various national homeless conferences. For instance, as the 
director of HUD's homeless programs, I was in Denver this week 
speaking at the Department of Labor's national conference for 
grantees serving homeless veterans along with my colleagues 
from the VA, including Pete Dougherty, and the Department of 
Labor. These conferences provide an opportunity to collaborate 
with other organizations that share the same goal of solving 
homelessness.
    HUD has also developed technical assistance to benefit 
homeless veterans. For instance, a guide book called 
Coordinating Resources and Developing Strategies to Address the 
Needs of Homeless Veterans describes programs serving veterans 
that are effectively coordinating HUD homeless funding with 
other resources.
    In closing, the administration is committed, through the 
Continuum of Care process, to ending chronic homelessness, as 
well as solving homelessness among veterans and all Americans. 
HUD will continue to work with its Federal, State and local 
partners to meet this commitment.
    Mr. Chairman, I will be happy to address any questions that 
the Subcommittee may have at a later point.
    Senator Allard. Mr. Johnston, thank you for your testimony.
    As I indicated to the panel, as members showed up on the 
Committee we will give them an opportunity to make an opening 
statement if they wanted to. I will turn to Mr. Reed, my 
ranking member, to see if he has an opening statement.

                   STATEMENT OF SENATOR REED

    Senator Reed. Thank you very much, Mr. Chairman. And this 
is one of those issues where our participation both on this 
Committee and on the Armed Services Committee comes in handy. I 
know of your great service on the Committee and your sincere 
and profound interest in veterans, so I look forward to working 
with you.
    Senator Allard. I am looking forward to working with you, 
too. I also am on the Appropriations Committee, I am on 
Military Construction. And underneath that Subcommittee we now 
deal with veterans issues there, also.
    Senator Reed. Thank you, Mr. Chairman.
    We all understand the contributions that veterans are 
making to our safety today, and we all understand also that we 
have a profound obligation to help them. The Department of 
Veterans Affairs currently provides services to 100,000 
homeless veterans and guarantees 300,000 to 400,000 VA loans 
every year. The Department of Housing and Urban Development 
also provides services to veterans through the Section 8, 
Section 202 and Section 811 programs and other homeless 
assistance programs.
    Some veterans, however, seem to be falling through the 
cracks despite these efforts. I am particularly concerned about 
the disproportionate number of veterans who experience repeated 
episodes of homelessness. Though veterans make up less than 10 
percent of the population as a whole, they make up 25 percent 
of the homeless population, and 400,000 vets are homeless in 
any given year.
    I think I express the sentiment of all of us here, to have 
any veteran who serves his country without a home in his 
country is a shocking and condemning fact.
    High housing costs, unemployment, poor education and mental 
and physical impairment seem to be the most oft-cited causes 
for veteran homelessness. Researchers, however, have also 
reported that homeless women vets, who are 3.5 times more 
likely to be homeless than their non-veteran counterparts, do 
not necessarily possess these risk factors. So there is 
something else at work with homeless vets.
    Similarly, while the VA Loan Guaranty Program has allowed 
millions of veterans to obtain home ownership, in an era when 
veterans tend to have low incomes, many cannot take advantage 
of the full range of home ownership benefits for which they are 
eligible.
    Additionally, as with people with disabilities in general, 
700,000 poor disabled veterans face significant obstacles in 
finding accessible housing they can afford.
    No single agency is capable of fully addressing the housing 
challenges that our veterans face.
    I believe that how we decide to deal with the housing of 
veterans, just as we determine how to address the housing needs 
of all Americans, reflects our values and priorities as a 
nation.
    This hearing will, I hope, illuminate some of the reasons 
why tackling the issue of affordable housing is of paramount 
importance to the American people. I believe that measures that 
I and others have offered, such as the Fannie Mae and Freddie 
Mac Affordable Housing Fund, the Services to End Long-Term 
Homelessness Act, and the Community Partnership to End 
Homelessness Act, also can aid in these efforts.
    Again, I look forward to working with the Chairman. Thank 
you, Mr. Chairman, for convening this hearing.
    Senator Allard. Thank you very much. I look forward to 
continuing to work with you, Senator Reed.
    Mr. Pedigo, continue if you would, please.

     STATEMENT OF KEITH PEDIGO, DIRECTOR OF LOAN GUARANTY, 
                 DEPARTMENT OF VETERANS AFFAIRS

    Mr. Pedigo. Thank you. Mr. Chairman and members of the 
Subcommittee, I appreciate the opportunity to appear before you 
today to discuss the VA Loan Guaranty Program.
    In my testimony I would like to highlight VA's commitment 
to meeting the housing needs of our Nation's veterans. I am 
pleased to be accompanied by Mr. Peter Dougherty, Director of 
Homeless Veterans Programs. Mr. Dougherty will discuss issues 
pertaining to homeless veterans.
    The VA Loan Program serves a clientele which is diverse in 
many ways. The only common denominator of this clientele is 
their service in the armed forces of our Nation.
    Since the inception of the program, the objective has been 
to assist eligible veterans to become homeowners. Veterans are 
assisted by making them more competitive in the mortgage 
marketplace. The program is intended to benefit men and women 
because of their service to the country.
    The VA Loan Program provides a guarantee to lenders who 
make loans to veterans and service members. The program's most 
distinguishing feature is that it allows veterans to purchase a 
home without the need to make a down payment. Ninety-one 
percent of the loans that VA guaranteed last year were made 
without a down payment.
    Other important program benefits include making direct 
loans to Native American veterans living on Trust lands and 
providing specially adapted housing grants to severely disabled 
veterans.
    Since the Loan Guaranty Program was established as part of 
the Servicemen's Readjustment Act of 1944, more commonly known 
as the GI Bill, VA has guaranteed over 18 million loans to 
veterans totaling almost $900 billion. The VA Loan Program has 
made mortgage credit available to many veterans who would not 
have been able to purchase a home otherwise.
    VA guaranteed loans are made to veterans by lenders such as 
banks, savings and loans and mortgage companies for the purpose 
of purchasing a home which must be for the veterans' own 
personal occupancy. Lenders must follow VA credit underwriting 
regulations and other VA requirements in approving and closing 
these loans.
    In return, VA issues a partial guarantee to the lender, 
protecting them against loss. There is no maximum VA loan but 
lenders will generally make no down payment loans up to 
$417,000. This is because lenders sell loans in the secondary 
market which currently places a $417,000 maximum on these 
loans.
    In certain high-cost areas such as Hawaii, Alaska, Guam and 
the U.S. Virgin Islands, the secondary market will buy no down 
payment loans for up to $625,000. Each January the maximum VA 
loan that a veteran can obtain is adjusted to be consistent 
with the Freddie Mac Conventional Conforming Loan Limit. This 
is nearly always an upward adjustment.
    Currently eligible veterans and service personnel may 
obtain a VA loan to buy, build or renovate a single-family 
home, a townhome, a condominium unit as well as buy a new or 
used manufactured home and/or lot. VA loans are also available 
to refinance an existing VA loan for the purpose of reducing 
the interest rate or to obtain cash from the equity in the 
home.
    During fiscal years 2001 through 2005 VA guaranteed 1.6 
million loans totaling $202 billion.
    VA considers that it has a twofold purpose in administering 
the program. Number one, to help veterans purchase the home of 
their choice; and Number two, to help them keep their home when 
they encounter financial difficulty.
    Like other homeowners, some veterans experience financial 
hardships that affect their ability to make loan payments. When 
this occurs, we help veterans retain their homes through 
supplemental servicing efforts. VA offers financial counseling 
and may even intervene directly with the loan servicer on 
behalf of the veteran to work out a repayment plan.
    When this assistance results in a veterans' loan being 
saved, we call this a successful intervention. Successful 
interventions help veterans avoid foreclosure and reduce the 
amounts VA is obligated to pay under guarantee.
    In fiscal year 2005, there were 8,963 instances where a VA 
intervention brought a foreclosure-bound loan current. If VA 
had not successfully intervened, $175 million in claim payments 
would have been made to lenders under the guarantee. More 
importantly, however, 8,963 veterans whose loans were in 
jeopardy of being foreclosed were able to continue living in 
their homes.
    The savings exceeds the total Government operating expense 
money requested to sustain operation to the program in fiscal 
year 2006.
    Mr. Chairman, this concludes my testimony. I appreciate the 
opportunity to be here today and look forward to answering any 
questions.
    Senator Allard. Thank you very much for your testimony. Now 
we will go to Mr. Dougherty.

           STATEMENT OF PETER DOUGHERTY, DIRECTOR OF 
           HOMELESS VETERANS PROGRAMS, DEPARTMENT OF 
                        VETERANS AFFAIRS

    Mr. Dougherty. Thank you, Mr. Chairman. It is certainly my 
pleasure, on behalf of Secretary Nicholson, to be here with you 
today and discuss the Department of Veterans Affairs programs 
and services that help homeless veterans achieve their housing 
needs. We thank you for inviting us.
    The VA's commitment is and remains to end chronic 
homelessness among veterans. To meet that goal, VA has and 
continues to create opportunities to bring together those 
veterans in need of assistance with a wide range of services 
and treatment that VA and others provide.
    VA provides health care services to more than 100,000 
homeless veterans each year. We provide about 12,000 
residential treatment beds of services each night. About 8,000 
of those that are currently operating are run by nonprofit 
groups and organizations in communities across the country, and 
about 4,000 of them are run by VA programs on VA grounds.
    For veterans who are homeless, our efforts involve a 
significant amount of health care services. Veterans are 
somewhat different than others in the homeless population both 
by age, by disease, by mental health and substance abuse. They 
are much more likely to be older than nonveterans. They are 
much more likely to be sicker than nonveterans. And they are 
much more likely to have been homeless longer than nonveterans 
have been.
    With that being said, let us talk a little bit about the 
prevention aspects of it. As the Committee is aware, we believe 
that the best strategy to prevent homelessness is early 
intervention. And that includes those returning from the 
present conflicts in Iraq and Afghanistan. We think this kind 
of policy of early treatment and the opportunity to get those 
veterans in and seen and served is, in fact, the best option 
that remains available to us.
    VA has worked closely over the last three years with our 
friends at HUD and HHS to work with the chronically homeless in 
the collaborative initiative that Mark Johnston mentioned. 
There are 600 chronically homeless individuals who have been 
housed underneath that initiative and 30 percent of them are 
veterans.
    During the past five years VA, HUD and HHS have sponsored a 
series of policy academies that bring together a broad group 
who work with the homeless populations in their respective 
states to improve the coordination of statewide efforts to aid 
the homeless. This approach was developed in coordination with 
the National Governor's Association, has been overseen by the 
U.S. Interagency Council on the Homeless, and we think has 
really helped to aid the development of coordinated plans at 
the State level to end homelessness.
    VA has recognized HUD's long-standing involvement with us 
with a program called HUD-VASH. That is a program where HUD 
provides Section 8s to veterans and we provide ongoing case 
management and health care services to the veterans that are in 
that program. It is, in fact, probably the most successful 
program that we have.
    VA has a long tradition of working with local providers in 
their communities and we have what is called a CHALENG meeting 
at each medical center. That is at least a once a year meeting 
where we bring together community service providers and others 
to look at the met and unmet needs of homeless veterans in 
their community, to improve access to services, improve 
resource directories, but perhaps most importantly to develop a 
local action plan to address those unmet needs. We look at that 
information very carefully at VA when we look at awarding new 
grants. And the Department of Housing and Urban Development 
uses that information to help identify the needs of veterans in 
their local Continuums of Care, as well.
    Ten years ago we believe there were about 250,000 homeless 
veterans on any given night on the streets of America. Last 
year, based on the best estimate that we have, we believe there 
were about 195,000. That is obviously still a tragically high 
number but it is a sign that the work and the effort that we 
have made in both our department and with our partners at the 
Federal level and at the local level is having some success. We 
are confident that our continued efforts will achieve the goal 
of ending chronic homelessness among veterans.
    We, along with many Veterans Service Organizations, State 
and local Governments and others participate in what is called 
stand-downs, a significant outreach activity. Some are 1 day, 
some are 3-day activities to reach out to homeless veterans. 
There were about a hundred of those programs that we recorded 
last year. About 20,000 veterans and their families were seen 
in that outreach effort. But perhaps as significant, there were 
about 13,000 volunteers who came out and helped to assist.
    As you know, our largest single program is the Homeless 
Providers Grant and Per Diem Program. That is a program were we 
can provide transitional supportive housing to homeless 
veterans. We also provide service centers and allow the 
purchase of vans to provide outreach and transportation to 
homeless veterans so they can get to the needed health care and 
employment services that they need.
    Since that program was authorized in 1992, close to 10,000 
transitional housing beds, 23 independent service centers and 
180 vans to provide transportation have been awarded. We are in 
the process of looking at a current notice of funding 
availability that closed in June and we hope that in September 
the Secretary will make an announcement that will probably add 
something between 500 and 1,000 additional transitional housing 
beds.
    The Department of Veterans Affairs addresses the health 
care and the benefits needs of veterans. And what we have found 
is that when we have identified veterans as homeless we get 
expedited claims processing for those veterans.
    In the last two reported fiscal years, we had almost 14,000 
claims filed on behalf of homeless veterans. And among those 
claims that were filed, 37 percent of compensation claims and 
73 percent of nonservice-connected pension claims were 
approved. That income support is a significant advantage to 
getting those veterans out of the homeless condition. Those are 
claims after the veteran was identified as being homeless.
    As the Committee knows, we have had a pilot program that 
would allow us to provide loan guarantee to transitional 
housing, multifamily transitional housing for homeless 
veterans. We have two guarantees that we have made, one is to 
Catholic Charities in Chicago. We expect that program will open 
this fall. The construction is almost completed. And we have 
another in San Diego, California.
    We are currently in the process of finding other good 
partners to work with us in those programs.
    As you have indicated in your opening statement, we work 
with a whole variety of programs, the Department of Labor, the 
Department of Justice, Health and Human Services, HUD and 
others, Social Security Administration among them.
    People always want to know are we being successful at what 
we are doing. We can tell you that we did a study of 1,350 
veterans who were in three types of programs: contract 
residential care, grant and per diem programs and domiciliary 
care in-house residential programs. With the evaluation that 
was done, we found that 80 percent of those veterans who had 
been in those programs a year after they completed that program 
were still appropriately housed. Given the population, that is 
a very significant result.
    VA, as I said, collaborates with a number of Federal 
agencies. We recognize there is still much for us to do to end 
homelessness and particularly chronic homelessness in this 
country. But we think that developing appropriate linkage to 
health care, housing, benefits assistance, employment and 
transportation, all those components need to come together in 
order to bring these veterans out of despair and homelessness.
    Mr. Chairman, I am pleased to also answer any questions you 
or the Subcommittee may have.
    Senator Allard. Thank you very much.
    We have a couple of members that have shown up and we will 
give you an opportunity to make an opening statement, if you 
would like to, Senator Carper or Senator Menendez.

                  STATEMENT OF SENATOR CARPER

    Senator Carper. As a veteran of the Navy and on behalf of a 
whole lot of folks who have been serving our country for a long 
time, I just want to say thank you for the work that you do in 
trying to look out for our veterans. And we appreciate it.
    When I got off of active-duty and moved from California to 
Delaware to go to University of Delaware Graduate School, one 
of the first places I went was the VA hospital, which is up the 
road in Ellesmere, close to Newark and Wilmington. Later I went 
back there to find out about a VA loan. The first house I 
bought was with a VA loan.
    So, as one who has benefited personally from that, I just 
want to express our thanks.
    Senator Allard. The Senator from New Jersey.

                 STATEMENT OF SENATOR MENENDEZ

    Senator Menendez. Thank you, Mr. Chairman.
    I just ask my full statement be entered into the record, 
and I look forward to the opportunity to ask some questions.
    We have 8,000 homeless veterans in New Jersey. That is 
8,000 too many, amongst the 200,000 or so annually in the 
country. And I think a grateful Nation deserves to do much more 
than that.
    So I look forward to the opportunity to ask questions.
    Senator Allard. We will proceed now with the question 
period. We will allocate 5 minutes per member and then, if 
necessary, we will have a second round. If we still have 
continued interest, we may even go a third round with this 
panel.
    Let me start this off. I have had some individuals who 
apply for housing assistance through the veterans program 
complain that it was a drawn out lengthy process. Do you think 
there is any opportunity to simplify the application process, 
to be able to expedite it and make them feel more comfortable? 
Or do you think it is essential to keep it--right now there is 
not any opportunity to look for flexibility in the program or 
single application progress? Or perhaps maybe a single set of 
regulations?
    Mr. Pedigo. Mr. Chairman, I think one of the stories that 
is most difficult for us to get out to the veteran and to the 
mortgage and real estate sales communities is the fact that the 
VA program has changed dramatically in recent years. We have 
made a concerted effort in the last 10 years to streamline 
program operations to make it easier for private sector program 
participants to use and for veterans. Our focus has been on 
delegating as much authority as we can to lenders to make 
decisions on loans.
    Presently 99 percent of the loans that VA guarantees are 
processed by lenders. And lenders have the authority to approve 
or disapprove a veteran's loan application. In 95 percent of 
those cases, we have delegated lenders the authority to review 
the appraisal report and make the final value determination on 
VA's behalf. These two functions were previously done in-house 
and it did take a protracted period of time, in some instances, 
to get a veteran's loan finished.
    Coupled with those changes are some significant 
advancements that we have made in the automation field, which 
now allow lenders to come in electronically and order the 
appraisal report and the appraiser to electronically send the 
appraisal report back to the lender and to the VA. Also, we 
have an automated certificate of eligibility system that we put 
in place 3 years ago that allows lenders to get an eligibility 
determination online. With these improvements, we believe that 
the VA Home Loan Program now is consistent in terms of 
requirements with the conventional loan programs in the private 
sector.
    Senator Allard. I think it would be really important as 
soon as they get out of the service to get that certificate. 
Would you think?
    Mr. Pedigo. That is very important.
    Senator Allard. Because the records are right there pretty 
much at everybody's fingertips.
    Mr. Pedigo. That is very important and we are presently 
working on an enhancement to that automated eligibility system 
that will give veterans access to it. Presently only lenders 
can access it on veterans behalf.
    Senator Allard. Is that right? The eligibility certificate, 
only the person who is granting the loan can access that 
certificate?
    Mr. Pedigo. Only that person can access the automated 
certificate.
    Senator Allard. So it is not a universal certificate where 
if they ever need to tap into any of the veterans programs, 
they could just refer to that certificate and they would be 
eligible?
    Mr. Pedigo. You are correct. It is only specific to 
eligibility for the home loan program.
    Senator Allard. Well, we are getting a little bit out of 
where I would like to see, but it seems like that could be 
simplified a little bit.
    Mr. Pedigo. I think there is some opportunity as we move 
forward to possibly incorporate some of the eligibility 
requirements in the other benefit programs. But the way Title 
38 is configured presently, there are different eligibility 
requirements for each of the five programs that we administer 
in VA.
    Senator Allard. I see. So it is more than just verify the 
fact that they have been in the service?
    Mr. Pedigo. That is correct. It is not just how long you 
have been in the service. It is the character of the service 
and what period of time you served.
    Senator Allard. Maybe what geographic area, too.
    Mr. Pedigo. Well, the geographic area does not really come 
in play but when you served definitely comes into play.
    Senator Allard. Now let us look at the homeless programs. 
Now HUD, on their homeless programs, Senator Reed and the 
administration and I worked together and we consolidated some 
of those programs. Is there any benefit to consolidating the VA 
homeless programs, do you think?
    Mr. Dougherty. Mr. Chairman, we have two programs that 
really go out to the community. One is the multifamily housing, 
which is only a 15 pilot project. The other is the Homeless 
Providers Grant and Per Diem Program. That program, although it 
is nationally competed and probably needs to be, given the 
small nature of the funding that is available, has great 
flexibility. It allows programs that have 100 or more veterans 
in a program to apply, as well as programs that are as small as 
six. It applies equally both to urban and rural areas. And we 
have done something in the last few years, Congress gave us the 
authority to use some targeting mechanisms. And we were able to 
target some States and jurisdictions that did not already have 
programs.
    The States of Alaska and Maine a year ago did not have a 
homeless veteran-specific program in their State. So we were 
able to target funding to those States. And both of those 
States responded by putting in applications that have now been 
approved.
    I am not sure there is much need for consolidation because 
there is only one program to compete for.
    Senator Allard. I understand. Thank you for your response.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    Mr. Johnston, I am told 50 percent of the homeless veterans 
have a substance abuse problem and there are other significant 
veterans with mental health disabilities. In fact, there are a 
number who have dual diagnoses or several diagnoses.
    You created, initially by a memorandum between HUD and the 
VA, the Supported Housing Program in 1992. It was authorized 
after that. The actual authorization provided 2000 vouchers 
from fiscal year 2003 to fiscal year 2006. But additional 
appropriations to fund the program have not been requested by 
HUD.
    Can you tell me how many HUD-VASH vouchers are still in use 
today?
    Mr. Johnston. My understanding is, and frankly there is a 
researcher at the VA that we work with, Dr. Rosenheck, that 
Pete and I work with, that tracks it relatively closely across 
the country, because it is the VA that actually helps 
administer this housing and supportive services.
    But my understanding is it is close to about 1,500, but we 
can get back to you with the more specific information on that.
    Senator Allard. Thank you.
    Mr. Johnston. I had a small part to play in developing the 
HUD-VASH program back in 1991, and we also found it to be an 
effective program. Because of that, we proposed and the 
Congress created the Shelter Plus Care program, which is the 
very model that we were testing out with the HUD-VASH program, 
whereby HUD would provide the rental assistance and other 
parties, in this case the VA, would provide supportive services 
such as case management.
    So Shelter Plus Care was based on that model and is now 
HUD's second largest homeless assistance program, providing 
hundreds of millions of dollars a year of rental assistance 
across the country matched up with services locally. So it is a 
great success.
    Senator Reed. Let me understand. In a sense, the prototype 
for the Shelter Plus Care program was the HUD-VASH voucher 
program. So you are no longer funding that program. Your 
requests are now being routed through Shelter Plus Care?
    Mr. Johnston. That is the vehicle that we see as so 
appropriate, because there is available funding for it and it 
is a great model to be using HUD money for housing and other 
monies for services.
    Senator Reed. That was originally the design of the HUD-
VASH program, too, HUD money for housing and other services 
that were principally VA services?
    Mr. Johnston. VA, exactly.
    Senator Reed. Mr. Pedigo, we all recognize that the VA Home 
Loan Guaranty Program has been very helpful. Senator Carper 
pointed that out. I am also a beneficiary after getting out of 
the United States Army.
    The biggest population that benefited were really veterans 
from World War II to 1960. There are now 1.5 million veterans 
that have incomes that fall below the poverty line, and some 
significantly below the poverty line.
    How do we reach out to these veterans who, unlike their 
predecessors, the World War II veterans, were able to come back 
into an economy, get jobs with good paychecks and buy a home? 
How do we reach these people?
    Mr. Pedigo. Senator, the VA loan program's charge is to try 
to approve as many loans as we can. But the law does require 
that the veteran have satisfactory credit and that he or she 
have sufficient income to support themselves and their other 
family members.
    In carrying out the statute, we have made an effort to 
develop some very flexible credit underwriting guidelines. And 
it is our policy to provide the benefit of the doubt to any 
veteran who appears to be close to meeting those credit 
guidelines.
    In looking at the performance of the VA Loan Program, of 
course we are a no down payment program. By definition that is 
the riskiest type of loan that a lender can make. Veterans have 
been very excellent paymasters. Over time only 6.3 percent of 
VA loans have gone to foreclosure. If you compare that with 
some of the other Government programs, as well as other 
programs in the private sector, you will find that that 
performance is very good.
    We know that there are a lot of veterans out there who 
simply cannot qualify, either because they do not have 
sufficient income or because they do not have satisfactory 
credit. We try to work with these veterans when they apply and 
are disapproved by providing some advice to them on how they 
might improve their credit record or how they might alter their 
financial approach in order to be approved at some point down 
the road.
    The home loan benefit has no expiration period. And so it 
is good until it is used. In fact, the veteran can even reuse 
it as long as the prior loan is paid off. So we make it a point 
to tell veterans who do not presently qualify that they will 
have an opportunity, whether it is next year or 10 years from 
now, to use that benefit.
    Senator Reed. Thank you.
    Mr. Chairman, will we have a second round?
    Senator Allard. We are going to have three rounds, 
possibly.
    Senator Reed. Thank you.
    Senator Allard. Mr. Menendez.
    Senator Menendez. Thank you, Mr. Chairman.
    Mr. Johnston, with 200,000 veterans homeless on any given 
night and more than 400,000 experiencing homeless over the 
course of a year, how would you grade our ability to deal with 
veterans' homelessness?
    Mr. Johnston. We have seen some very encouraging signs 
within the last two to three years. As you may know, the 
Interagency Council on Homelessness which Secretary Jackson 
chairs, has had a concerted effort to end chronic homelessness. 
It has involved the parties that you see here today, but other 
agencies as well.
    As we look at different communities across the country, and 
essentially every city and country in America are now involved 
in HUD's Continuum of Care, so we are getting reporting now 
each year, the number of chronically homeless persons is 
beginning to decline in many communities across the country. 
And this is being reported separately from other sources, as 
well.
    Senator Menendez. And the grade is?
    Mr. Johnston. I would say the grade is a B+.
    Senator Menendez. A B+?
    Mr. Johnston. And I say that because we launched this 
initiative in about 2002, and it took a couple of years to help 
develop a number of housing units and services to engage this 
community. The chronic homeless focus is people living on the 
street, which is a very difficult population to serve.
    Senator Menendez. You must have had a lenient grader when 
you were in school. Where I came from that would not have 
gotten a B+.
    One of the advocates that will testify later, several of 
the advocates that will testify later, have a series of 
recommendations which seem to me to be long-standing in nature, 
and this has been going on for some time. I wonder if you would 
respond to it.
    It says VA and HUD homeless programs are woefully 
underfunded and many homeless veterans are not served by them, 
one.
    Two, missing all together in the Federal housing continuum 
are affordable strategies targeted to low income veterans.
    Three, Congress and HUD should immediately fill the backlog 
of 2,000 authorized but not yet allocated vouchers to the HUD 
Veterans Affairs Supported Housing and they should be increased 
to at least 20,000.
    What do we say about those?
    Mr. Johnston. Those are some good points.
    In terms of the first item, which is that we are woefully 
underfunded, and I can only speak for HUD obviously, we 
recognize that more money is needed to help solve this problem. 
So we have been requesting significant amounts of money.
    In 2006, we were appropriated a little bit less than we had 
requested but it was relatively close. We were appropriate 
approximately $1.3 billion. We have requested for 2007 a little 
bit more than $1.5 billion and were thrilled to see that both 
the House and the Senate marks, at this point, are nearly, not 
quite but nearly, matching that level.
    That extra almost $200 million will help contribute to this 
very issue of reaching out to those homeless veterans and other 
persons living on the streets who both need the housing as well 
as the services.
    You also mentioned the notion of how we could better 
integrate at HUD and perhaps other agencies, but how at HUD we 
could better integrate serving homeless veterans through 
mainstream programs.
    One approach that we have been taking is through something 
called the Consolidated Plan, which is the application that we 
have used at HUD for a number of years, as a consolidated 
application for a number of our larger formula programs such as 
the CDBG program and the Home program.
    In that we have embedded the very kinds of information that 
we look for annually in our homeless competitions so that 
communities can always remember and recognize the importance 
that we place on veterans. We highlight homeless veterans as 
one of the key populations that we intend and hope that all 
communities will serve.
    Senator Menendez. Excuse me a moment. But they are in 
competition with anyone, everyone else who is in that category.
    Mr. Johnston. They are.
    Senator Menendez. So you make a mention of them and you 
hope that those communities will look at that. But they are in 
competition with everybody else in that category. And the 
advocates for those categories would say that they are woefully 
underfunded.
    Mr. Johnston. Yes, you are exactly right. The statute that 
created our programs does take veterans, as well as a host of 
other subpopulations of the homeless that HUD is charged with 
serving. And so while we may not specifically and only serve 
one particular population, such as veterans, we do recognize it 
as an important one.
    For a number of years we saw that homeless veterans groups 
were not at the table, at the planning table, in deciding how 
funds would be awarded, to which kinds of groups. So we gave 
points in our competition if veterans groups were at the table.
    There are a number of different references in our 
application encouraging that veterans come, and it has really 
improved over time.
    Senator Menendez. Thank you, Mr. Chairman.
    Senator Allard. I would like to continue to talk a little 
bit about the home purchase provisions that we have, Mr. 
Pedigo.
    The down payment is a matter determined, I understand, by 
the borrower and the lender. And generally, I think, financial 
institutions allow a veteran to borrow with no down payment. My 
question is have you tracked loan performance according to the 
down payment amount? And if so, what have you found?
    We have looked at some of the provisions in other financial 
institutions and it seems like despite the credit rating, the 
amount of down payment reflects the ability to sustain a loan 
and not go bad on a loan. I wondered if you had any thoughts on 
that subject.
    Mr. Pedigo. I would agree with that. Down payment is a key 
element in determining the potential risk of a mortgage loan. 
And 91 percent of our loans are made without a down payment, 
which means 9 percent have some level of down payment. We have 
done analyses over the years that clearly show that the 
riskiest loans are the 91 percent where no down payment has 
been made and that the loans that had some level of down 
payment generally perform better.
    Senator Allard. Is that because--I guess your current 
amount of down payment or your GSE loan limit right now would 
be 25 percent of $417,000; is that correct? Do I have the right 
figure there?
    Mr. Pedigo. That is correct. Our maximum guarantee would be 
$104,250.
    Senator Allard. The reason that you have a down payment is 
that you cannot hardly get s home in that price range anymore. 
That would be under that range. They would have to pay some on 
their own and that would necessitate maybe some down payment?
    Mr. Pedigo. With the VA program, you can get a $417,000 
loan without making a down payment.
    Senator Allard. You can.
    Mr. Pedigo. Yes. But the amount of guarantee that we would 
give to a lender making that loan would be $104,250 or 25 
percent.
    Senator Allard. I see, and that is the reason for the--are 
you figuring--you are not figuring that in as it was a down 
payment, are you?
    Mr. Pedigo. No, we do not. But from the lender's 
standpoint, the guarantee is a substitute for a down payment 
because it protects them against risk.
    Senator Allard. Help me understand why it is that we have 
these fees that we apply at certain levels. You have a 2.15 
percent of the loan if they pay less than 5 percent, 1.5 
percent if they have a 5 or 9 percent down payment. Do you want 
to justify that to us, please?
    Mr. Pedigo. You are referring to what we call the funding 
fee.
    Senator Allard. Yes.
    Mr. Pedigo. Prior to 1982, veterans did not have to pay a 
funding fee to use the VA program. But in 1982, Congress passed 
a statute that required veterans to pay 0.5 percent.
    Senator Allard. So that is statutory.
    Mr. Pedigo. That is statutory. And then over time Congress 
increased the funding fee. So that today, for a veteran using 
the program for the first time, if the veteran is not service-
connected disabled, that individual must pay 2.15 percent of 
the loan amount.
    Senator Allard. On top of the interest that he would be 
paying?
    Mr. Pedigo. On top of the interest. But that amount is 
included in the loan for most veterans.
    Now for a veteran using the program a second or subsequent 
time, the statute requires a 3.3 percent funding fee.
    This funding fee generates a substantial amount of money, 
sufficient in fact to put us in a negative subsidy position for 
each of the last 3 years. So, essentially for the last 3 years 
the VA has not needed appropriations into its mandatory account 
in order to sustain program operations.
    The funding fee is most unfortunate. It started out being a 
nominal amount and it did not constitute a burden on veterans. 
But in my opinion presently, with the structure the way it is--
--
    Senator Allard. It puts them above market rates.
    Mr. Pedigo. Yes. It requires them to pay a substantial 
amount to use this benefit program.
    Senator Allard. Mr. Johnston and Mr. Dougherty, I am a 
strong believer in outcome measurements. I think the president 
refers to it as the PART program. In what ways are your 
programs focusing on outcomes and results? If you would both 
respond to that.
    Mr. Dougherty. Mr. Chairman, we have the ability and have 
had the ability since 1987, when we started our homeless 
programs, to be able to identify every veteran who has been in 
a homeless-specific program. That gives us the ability to go 
back and to look and to see whether or not those veterans have 
relapsed, have gone back in. We obviously know what kind of 
health care services they have gotten. We have a significant 
amount of information because we are the health care provider 
for most of those veterans, as well.
    Senator Allard. The bottom line though, you are not on the 
list of agencies that has failed to participate in the PART 
program? Or for some reason or other, you got an unsatisfactory 
rating?
    Mr. Dougherty. No.
    Senator Allard. Mr. Johnston.
    Mr. Johnston. In terms of HUD's homeless assistance 
programs, we have very specific outcome measures. OMB included 
them on their website as model measures for other agencies to 
consider. We recently underwent the PART process and our score 
was announced in January. It was an effective score, the 
highest rating.
    Senator Allard. Very good.
    Mr. Dougherty, there was some hesitancy there on it. So if 
you find out otherwise, if you could get back and change your 
testimony with the Committee, we would appreciate that.
    Mr. Dougherty. I will.
    Senator Allard. Senator Reed.
    Senator Reed. Thank you, very much, Mr. Chairman.
    I want to follow up the question I addressed to Mr. 
Johnston, but also Senator Menendez's line of testimony.
    Mr. Dougherty, you have had a lot of experience with the 
HUD-VASH program, which is essentially HUD monies for vouchers 
for shelter plus VA supportive services. The difference between 
shelter plus care, as you pointed out in a previous question 
and answer, and the HUD-VASH program is the HUD-VASH is veteran 
specific?
    Mr. Dougherty. That is correct.
    Senator Reed. So essentially what has happened is we took a 
program that could have had 2,000 vouchers and we merged it 
into another program to serve the whole spectrum of homeless in 
the country. Is that accurate?
    I guess my question to you, Mr. Dougherty, it seems to me 
that we need a lot more attention to homeless veterans and 
that, by requesting more resources to the HUD-VASH program we 
could target those resources to veterans. That is one question, 
if you agree or disagree.
    And the second, just your impression of how well the 
program worked because we received indications that this 
program was working exceptionally well, was making a real 
difference in, if not reducing the population of veterans, 
certainly preventing the escalation that we have seen.
    Mr. Dougherty. Mr. Reed, you are absolutely correct that 
the HUD-VASH program, which started out as simply an agreement 
between the two departments, blossomed into what we think may 
be the most effective program we have. As I indicated in the 
beginning of the statement, our programs are really tied to 
that chronically homeless veteran. There are many homeless 
people in this country, including veterans, who bounce into 
homelessness, who come right back and can go on with their 
lives with minor interruption.
    Our programs are really geared to that veteran who, without 
health care and other support services, would remain homeless 
and would be a very significant drain on health care services 
and the criminal justice system and other kinds of things.
    What we have found is when we were able to get those 
veterans back to being clean and sober and getting their heads 
clear again, that the opportunity to live in long-term housing 
with a VA social worker as the case manager for them, they do 
not need intensive case services. The opportunity to have 
someone to come periodically to check on them in their housing, 
is a very effective system.
    It is so effective that although there are still, as Mark 
mentioned, some HUD-VASH specific vouchers, in some 
communities, others have come and said gee, VA, if you could 
provide case management services, we would identify vouchers 
specifically for veterans.
    So in our annual report we talk about, and he is right it 
is about 1,500 HUD-VASH that are still around. But we almost 
have that same number of communities that have come forward 
with vouchers.
    The trouble with that is they could also withdraw their 
voucher support next year. The beauty of the HUD-VASH program 
is it gave both departments an opportunity to identify those 
resources for a long-term commitment. That commitment legally 
probably expired a long time ago but they have continued.
    Senator Reed. The 1,500 HUD-VASH vouchers, about 1,500 that 
you have been able to withdraw from other community supporters, 
how many do you think we would need to----
    Mr. Dougherty. I would not try to give you a number right 
off the top of my head, but I can tell you that in the Grant 
and Per Diem Program we see about 16,000 to 18,000 veterans a 
year. Many of them are able to return to gainful employment and 
to move on with their lives. There are a percentage of that 
total that comes through every year that need some kind of 
access to some supportive services with permanent housing.
    So we would gladly come back with some precise numbers.
    Senator Reed. If you could.
    Mr. Dougherty. But it is certainly a percentage of that 
total.
    Senator Reed. What is troubling to me is we are trying to 
stretch limited dollars now, not over just the veteran 
population, but over a much bigger population and essentially 
pitting deserving individuals, some who were veterans who have 
a special, in my view and I think in the view of most 
Americans, special standing because of their service.
    I think we can do much better and I hope we could.
    Thank you, Mr. Chairman.
    Senator Allard. Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman
    Can I just nail this? So where is this recommendation that 
fulfilling the backlog of the 2,000 authorized but not yet 
allocated vouchers to the HUD-VASH program?
    Mr. Johnston. I am not the best person to give a response 
today. The reason I say that is my responsibility at HUD is 
over the homeless programs. I do not have responsibly for the 
Section Eight program. But I would be more than happy to take 
back that excellent question and give you a written response.
    Senator Menendez. I would appreciate you getting that to 
the chair.
    Mr. Dougherty, let me ask you, you have a 2-year 
transitional program for homeless veterans; right?
    Mr. Dougherty. Yes, sir.
    Senator Menendez. How many people participate in that, 
roughly?
    Mr. Dougherty. In the past year we had about 16,000 to 
18,000 veterans that came through that program. We also have 
domiciliary care and some other residential care programs that 
we have.
    Senator Menendez. That is in the past year, 16,000 to 
18,000?
    Mr. Dougherty. That is in the past year.
    Senator Menendez. Now when their 2-year transition ends, 
what is the rate of those who ultimately end up in long-term 
housing?
    Mr. Dougherty. The rate of independent housing, getting 
assured housing and having a place to stay on their own, many 
get it because they were able to gain gainful employment and 
have an economic stream to do that. Some of them get benefits, 
if you will.
    As I was mentioning a moment ago, 37 percent of homeless 
veterans who have applied for service-connected compensation 
have been awarded. Of that 37 percent, 22 percent have been 
rated 100 percent service-connected disabled. That obviously 
gives them an income stream to get into housing that they would 
not and did not have, obviously, before that period of time.
    About 60 percent of the veterans that we see in the 
transitional housing program have employment and have some 
opportunity to move on. I cannot give you a precise number.
    Senator Menendez. That language is very important, that 
they have income and an opportunity to move on does not mean 
that they have housing necessarily.
    Mr. Dougherty. That is correct.
    Senator Menendez. My question is, which I assume that in 
this performance effort you want to know, after 2 years of 
transition, what happens in this individual, what is the 
percent of individuals of the 16,000 to 18,000 who ultimately 
go through the 2-year period, what percent ends up in housing, 
whether it is Governmental, Governmental-assisted or the 
private sector? Do we have any sense of that?
    Mr. Dougherty. Those that have gone through, we have found 
that about 80 percent have housing at the end, a year or more 
after they have completed the program.
    Senator Menendez. 80 percent?
    Mr. Dougherty. Yes.
    Senator Menendez. Do you follow them, how long they have 
housing for after?
    Mr. Dougherty. We follow many of them but we do not follow 
all.
    Senator Menendez. What happens to the other 20 percent, 
which would be maybe 4,000 people?
    Mr. Dougherty. Some of them relapse, some of them because 
of mental illness and substance abuse may return and need 
additional care. Some of them we just cannot track.
    Senator Menendez. Let me give you an experiential factor 
from organizations in New Jersey that work with veterans and 
the transitional housing for homeless veterans. They say that 
their biggest challenge is finding these veterans some form of 
affordable permanent housing when their program comes to an 
end. I will give you an example.
    One of the veterans participating in the program served in 
Vietnam. After returning from service, he became homeless and 
spent 23 years on the streets as an alcoholic. He is in 
transitional housing and he believes that is his road to 
recovery as do those that are helping him in the process. But 
he is almost at the end and there is no clear housing 
opportunity for him now.
    So this 2-year transitional process that ultimately does 
not end in some form of long-term housing opportunity is, at 
most, a stopgap measure if we do not ultimately achieve 
something at the end of the road.
    Mr. Dougherty. Finding long-term housing is the most 
significant problem that we face. That is correct.
    Senator Menendez. That would go back to speaking to the 
20,000 vouchers that is an opportunity to help people be able 
to live in private sector housing, having subsidized as they 
stand on their feet, hopefully for a record of time. It just 
seems to me that if we transition and we do not have any sense 
of how long people are able to stay in some form of housing 
that is long-term, at the end we are not doing our job in 
figuring out whether we are performing well. I would hope we 
would look at that.
    Thank you, Mr. Chairman.
    Senator Allard. To the Committee members, we will go one 
more round. I have one question. You have one. So we will do a 
really short one round.
    My one question would go to Mr. Pedigo again. What has been 
the trend regarding VA's share of the mortgage market over 
recent years?
    Mr. Pedigo. That is a tough question to answer. We do not 
track market share. However, there are analysts in the industry 
who do. Some of them would say that we had a 5 to 6 percent 
market share back in the mid-90s and that that has fallen to 2 
to 3 percent. Similarly the FHA program has lost that 
percentage of market share.
    However, I have a slightly different opinion than some of 
the analyst, and that is that we appear to have lost market 
share primarily because the market has grown. The universe of 
the mortgage market is far greater now, especially in the last 
5 to 6 years, with the advent of some very exotic products in 
the subprime mortgage arena, as well as the conventional loan 
arena. Things that we have all heard of like interest only 
loans and payment option loans that are extraordinarily risky. 
These programs have developed and have expanded the universe. 
And because we have to operate under statutory authority, we 
have not been able to change our program.
    So what we are finding is that the number of loans that we 
do, on balance, over the last 6 to 8 years has remained fairly 
stable. But the universe of the industry has expanded. And so 
it gives the appearance that we have lost market share, when in 
reality we believe we are serving as many veterans as we have 
at any point in the last 10 years.
    Senator Allard. Do we have a declining number of veterans 
that would be interested in home loans?
    Mr. Pedigo. I believe that we do have a declining number, 
and I think that is driven in large part by the funding fee 
structure that we discussed earlier. I think that veterans who 
have sufficient money to make a down payment, consider that 
they have options to the VA program. And so many of them opt to 
get another type of loan in order to not have to pay that 
funding fee.
    Senator Allard. I see. Thank you.
    Senator Reed.
    Senator Reed. Thank you, Mr. Chairman.
    Mr. Johnston, you indicated before that you were pleased 
that the House and Senate appropriators have done a better job 
of fulfilling HUD's request in these areas.
    Mr. Johnston. They always do a very good job, of course.
    Senator Reed. I am sure they do. They are just impeccable 
people.
    But you mentioned before that the most recent budgets are 
closer to your requests?
    Mr. Johnston. Yes.
    Senator Reed. I want to ask you, what is your request to 
OMB? Or alternatively stated, has OMB resisted giving resources 
to these programs, like the HUD-VASH and the Shelter Plus Care?
    Mr. Johnston. OMB is wonderfully supportive.
    Senator Reed. So HUD has not asked for more money?
    Mr. Johnston. We have, in working with OMB and having an 
eventual request, we have always had a great relationship with 
OMB in determining an amount that both parties--I mean, the 
administration as a whole--feels very, very good about.
    Senator Reed. I think from some of the comments we have 
heard, the administration might feel good about it but most 
homeless advocates and a lot of homeless people do not feel 
good about it. It is not personalizing it, it is just 
expressing what should be obvious in the context of our 
discussions about homelessness. We have got a program here, 
HUD-VASH, which works. It is key to a lot of progress for 
veterans.
    Yet it has been, I think principally because of budget 
reasons, combined or competing against other groups.
    One test could be to go back and to ask OMB for more than 
2,000 vouchers for HUD-VASH and then let them fund Shelter Plus 
Care at similar agreed-upon levels.
    Mr. Johnston. I guess what I am very impressed with over 
the last four or five years is looking at the requested level 
of the administration on HUD's homeless assistance relative to 
the eventual funding that goes for other kinds of programs. 
There is typically an increased request above the previous 
level appropriation, despite all of the constraints and the 
pressures that we have these days in terms of providing 
funding.
    So I guess, in short, I would say I am just very impressed 
with the amount that is requested and very pleased with the 
levels being appropriated.
    Senator Reed. Relatively speaking, I would tend to agree 
with you. I have seen more attention to homelessness issues 
than many other responsibilities of HUD.
    But nevertheless, I think we have a huge problem, 
particularly veterans. That is the point of this hearing. We 
have a program that works very well and we are not asking for 
the resources that I think could be used effectively to help 
these veterans.
    So perhaps OMB could be even more generous next time when 
you ask them.
    Mr. Johnston. It will pass that along.
    I would like to mention that this past year, I am just 
looking at the numbers for the awards that we made. We had 254 
requests from projects that wanted to specifically and almost 
completely help veterans only. Of those 254 requests, many of 
these would be Shelter Plus Care programs, we were able to fund 
231, essentially 90 percent of these requests coming in.
    As I look over the last 10 years on this issue about 
veterans' projects being helped, being funded by HUD, the 
numbers have been going up. I think that is a very encouraging 
thing. And I think it is in part because they really are at the 
table at this point. Other groups had always been there, but in 
at least some communities, many communities, veterans were not 
always there.
    So there is more attention locally to serving veterans than 
there has been the past, in my view.
    Senator Reed. Thank you.
    Senator Allard. Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman.
    Senator Allard. I want to thank this panel for coming by 
and testifying before the Committee. We appreciate your 
testimony.
    A couple things I would emphasize. I am pretty sure the 
Committee will have additional questions that they will want to 
submit. I would ask that you return those back to the Committee 
within 10 days, if you would please. We will proceed on to the 
second panel. Thank you.
    Let me see if I can get your names correct here. I 
apologize. It is Beversdorf; is that correct?
    Ms. Beversdorf. That is correct.
    Senator Allard. And Banaszynski. Very good.
    Ms. Banaszynski. Banaszynski, yes.
    Senator Allard. We will start off with Cheryl Beversdorf of 
the National Coalition of Homeless Vets, and then we will 
proceed to Barbara Banaszynski of Volunteers of America.

   STATEMENT OF CHERYL BEVERSDORF, CHIEF EXECUTIVE OFFICER, 
            NATIONAL COALITION FOR HOMELESS VETERANS

    Ms. Beversdorf. Thank you, Chairman Allard, for holding 
this hearing on the housing needs of veterans. It is very 
welcome.
    The National Coalition for Homeless Veterans represents 
over 250 community-based and faith-based organizations across 
the Nation that work with veterans experiencing homelessness.
    Let me begin by talking about why veterans become homeless. 
Actually, it happens for the same reasons as persons who have 
not served in the military. Veterans' incomes are too low to 
obtain affordable housing or enough affordable housing is not 
in their community.
    Another reason is that they may not have an income because 
of a disabling health condition or an injury, including 
service-connected disabilities, which prevents them from 
holding a job. Or they may not have access to health care to 
treat these conditions.
    Additionally they may be ineligible or have barriers to 
receiving public or veteran income assistance. They cannot 
secure a job that pays a living wage because they lack job 
skills that are transferable to the civilian market.
    Many veterans become homeless because of problems 
experienced before they went into the military, such as poverty 
within the family, lack of educational opportunities or a 
history of social problems.
    A large number of veterans who become homeless struggle 
with post-traumatic stress disorder, also known as PTSD, which 
is due to high occupational stress. Veterans may also have 
addictions, which were incurred or worsened by military 
service.
    These conditions, when left untreated, interrupt the 
veterans' ability to keep a job, establish savings and maintain 
family harmony. As a result, they may be asked to withdraw from 
the family's housing.
    Also, the veteran's social and professional networks may 
have been broken due to extensive mobility while they were in 
the service or lengthy periods away from their hometown and 
their civilian jobs.
    All these conditions that I have described make it 
difficult for veterans to receive referrals to jobs or share 
housing with someone who will take them in temporarily while 
they get back on their feet.
    So now let me talk about the Federal programs. The VA and 
HUD homeless programs such as Grant and Per Diem, McKinney-
Vento and HUD-VASH, play very vital roles in creating a housing 
safety net for these veterans whose living arrangements have 
reached the bottom.
    Each of these programs, however, is woefully under-
resourced and many homeless veterans are not served by them. I 
cannot emphasize enough that the funding levels of these 
programs do need to be increased. In particular, we call upon 
Congress to immediately fund the backlog of 2,000 authorized 
but not yet allocated HUD-VASH vouchers. Ultimately, Congress 
should increase the allocation of such vouchers to at least 
20,000. While a major increase, this figure still represents 
just 5 percent of the estimated 400,000 veterans who experience 
homelessness annually.
    I wish to turn to the subject of permanent housing for the 
Nation's 1.5 million low income veterans who are at the 
greatest risk among all veteran subgroups of becoming homeless. 
To prevent homelessness among these veterans, there is no more 
obvious response than to ensure their access to permanent 
affordable rental housing so they are never without a safe 
place to live.
    Today America is experiencing an affordable housing crisis 
and low income veterans are among its victims. Among the 
millions of Americans facing affordable housing challenges, 
veterans have never received the attention they need and 
deserve. For example, over 60 years ago when the Congress 
passed the GI Bill, it granted the assurance of home ownership 
opportunities specifically to veterans through the VA Home Loan 
Guaranty Program. On a personal note, I would add that since I 
am a veteran--I was an Army nurse during the Vietnam era--I was 
a recipient of the GI loan. I bought my first condo with that 
VA loan.
    The problem has been one of no assurance of rental housing 
opportunities for those veterans for whom home ownership was 
not a realistic option due to low income or savings levels. And 
that has been the situation ever since.
    NCHV calls on Congress to resume where it left off over a 
half century ago and pledge a comparable GI-level commitment to 
affordable housing opportunities for our Nation's low income 
veterans. Congress must take bold steps and establish new 
affordable housing programs and strategies that are targeted 
directly to veterans.
    The launch of such new initiatives is consistent with the 
long history of our Nation to establish benefits that are 
unique to veterans in recognition of their service. With this 
action, we are pleased to call to the Subcommittee's attention 
the Homes for Heroes Act, a bill that would establish veteran-
specific permanent affordable housing programs and authorities 
within HUD.
    We believe all Federal departments, not just the VA, bear 
responsibility for supporting our Nation's veterans, and the 
Homes for Heroes Act would give HUD the tools to do so. We urge 
Congress to pass this ground-breaking legislation.
    In conclusion, let me say that every one of our Nation's 
military heroes deserves the opportunity for a safe, affordable 
and permanent place to call home. None of us should rest until 
this goal becomes a reality for each veteran who served our 
Nation.
    I will be happy to answer any questions.
    Senator Allard. Thank you. Ms. Banaszynski.

     STATEMENT OF BARBARA BANASZYNSKI, DIRECTOR OF PROGRAM 
               DEVELOPMENT, VOLUNTEERS OF AMERICA

    Ms. Banaszynski. Thank you, Chairman Allard, for inviting 
me today, and ranking member Reed, and members of the 
Subcommittee.
    My name is Barbara Banaszynski. I am the daughter of a now 
deceased World War II veteran and the mother of a son who is 
currently serving in the Third Infantry Division at Fort 
Stewart, and stationed now at Fort Stewart, Georgia.
    I work for Volunteers of America. I work for a national 
nonprofit faith-based organization that is focused on meeting 
the needs of veterans. We are a member of the National 
Coalition of Homeless Veterans. I am happy to be here with 
Cheryl today.
    I want to talk a little bit about the 13 years of work I 
have done with veterans in the Appalachian regions of Kentucky, 
Tennessee and West Virginia.
    We have an over--while we are not Colorado and we do not 
have the total number of veterans that Colorado does, we have a 
very high percentage of veterans who live in the Appalachian 
regions, mostly because serving in the military was a way in 
which to gain employment when there was not much in the 
mountain regions for employment.
    So many of our veterans come to the military looking for 
that American dream of learning skills, serving our country. 
Many of those veterans come back to our Appalachian regions to 
live in their communities. They come back to us with many of 
the things that Cheryl had told you.
    But one of the things that they come back to us with is 
almost universally they have been honorably discharged. They 
have served their country with distinction and are eligible for 
many benefits.
    But in some cases and in many cases, without the nonprofit 
world and the faith-based organizations serving as a bridge of 
those organizations, they are not able to connect themselves 
with those kinds of benefits. That is a bridge that Volunteers 
of America has been serving for a long period of time.
    Most of our urban veterans have experienced long-term 
homelessness. Most of our rural veterans have lived in 
substandard housing for many years or are living in encampments 
out in the open.
    I have a great deal of respect for both HUD and for our 
Department of Veterans Affairs and Pete Dougherty, as an 
example, just because they have--they do serve--they provide 
many programs that are very useful to us.
    Like the National Coalition for Homeless Veterans, we 
encourage the Congress to pass the Homes for Heroes Act, 
especially the VASH provision. I want to tell you why.
    Housing is wonderful. But housing without services for 
these chronically homeless veterans is not doable. They lose 
that housing. The HUD-VASH program guarantees that there will 
be VA support services and case management and a wide range of 
services available either by contract or direct provision of 
the VA. That is very important. That is a very big difference 
between the Shelter Plus Care program and the HUD-VASH program.
    The Shelter Plus Care program while very useful, and I 
certainly would not want to see it go away, asks the community 
to provide the support services. And as Senator Reed knows, 
while we are trying to get many things done, the SELHA Act, we 
have a lack of support services. There are no more support 
services. The VA has a host of support services that can be 
provided to veterans and we highly hope that you will act on 
that.
    The other thing that I certainly think that is happening is 
that many of the veterans that we serve will never be able to 
participate in the traditional HUD or VA loan programs. Their 
area median income, wages that they are earning fall below 30 
to 50 percent of the area median income, making them ineligible 
as a credit risk from most VA loans. Even if there were not the 
question of the service fees attached to those.
    In the traditional market, if I would go to buy a home and 
was asked to provide three points, I would go to another loan 
dealer. I would go to another banker until I could find a loan 
that did not offer that kind of point process.
    We are urging Congress to pass an affordable housing fund 
as part of Senate Bill 190, the Federal Housing Enterprise 
Regulatory Reform Act. This housing legislation targeted to 
veterans is important for the housing needs of low income 
veterans that I am talking about, and they can also be--these 
low income veterans can get their needs meant through this type 
of legislation.
    Again. affordable, decent, safe housing for all is the 
goal, especially for veterans that have served their country.
    Congress should also preserve funding for new housing to 
end homelessness. These too, many of our chronically--in recent 
years HUD has devoted an increasing proportion of McKinney-
Vento funding to permanent housing. But again, it is a 
competition in the open market and we have to be--the veterans 
groups have to stand up and be counted in their continuum of 
care in order for veterans to get the services that they need 
out of McKinney-Vento.
    I appreciate the opportunity to be here today and I 
appreciate the opportunity to continue the opportunity to work 
with veterans. Thank you.
    Senator Allard. Thank you both for your testimony. We will 
try a round or two of questions here and see how we come out on 
time.
    Many times facilities that serve veterans also serve 
nonveterans. And perhaps maybe you have been involved with many 
of these organizations. It sounds like you have.
    Is there a bookkeeping problem when you have two different 
types of clients out there that you are trying to serve?
    Ms. Banaszynski. Senator Allard, many programs do mix 
populations. But I think it is in the engagement process and in 
many times when we go forward with services veterans find their 
way to more veteran-specific programs. The Grant and Per Diem 
program is an example. We operate one in Lexington, Kentucky. 
And through Pete Dougherty's assistance, we operate that on a 
VA grounds, in a building that was no longer used by VA.
    Which is, if I may add, another usage of Government 
resources that the Congress could make available to veterans 
groups, by assessing what is happening in their buildings and 
what they have available and making it possible for faith-based 
and nonprofit groups to utilize those buildings to serve both 
the transitional housing needs and the permanent housing needs 
of veterans.
    I do not think ourselves, in Kentucky and Tennessee, we 
operate veteran-specific programs. Where we would and might 
likely operate nonveteran-specific programs if we were to have 
the Homes for Heroes Act passage and we had a 202 program kind 
of aimed at veterans, we would tend to use some of those monies 
to place persons in permanent housing, in mixed developments 
and multifamily developments, and not necessarily have 100 
units of veteran-specific housing.
    Senator Allard. Ms. Beversdorf, do you have any comment?
    Ms. Beversdorf. All of the organizations that NCHV 
represents serve only veterans. So that really is who we focus 
on.
    What is frustrating, and I echo what Pete Dougherty was 
saying, based on my visits with these community-based 
organizations, it is really interesting how many veterans have 
gone through the program, which is supported by Grant and Per 
Diem, and received the supported services they need. They are 
ready to move out, they have jobs. These people are gainfully 
employed. They are living in these facilities and want to move 
out. Unfortunately, in their case, they do not have the 
necessary incomes because the kinds of jobs that they have that 
would allow them to go into housing do not necessarily provide 
them with the right credentials or qualifications to make them 
eligible for housing that is sponsored by HUD.
    Senator Allard. Thank you.
    I want to direct my next question to the so-called boutique 
programs. These are specialized programs that might be provided 
to veterans. The question I have is if we get too many 
specialized programs out there, when it comes to funding 
priorities do we end up pitting one segment of the veterans 
population against another veterans? And if we do that, how do 
we prioritize those? Ms. Beversdorf?
    Ms. Beversdorf. That is a difficult question, made all the 
more so by the fact that we are talking about different kinds 
of veterans. The NCHV did a mini survey last fall in which we 
surveyed close to 50 of our members to get a sense of what the 
trends are. What we are seeing is the following: first of all, 
the needs of homeless veterans who have been in community-based 
organizations for an extended length of time and are primarily 
Vietnam veterans are changing drastically. Some of them have 
been homeless for a long time or have been living in some kind 
of a setting where they are still getting support services 
because they have not been able to live independently. But they 
are aging now. And so we are trying to figure out how best to 
assist them.
    At the same time, we have two new cohorts that are rapidly 
growing. One cohort, about whom we frequently are asked, is the 
returnees from Iraq and Afghanistan.
    A subset of that, is an increase in the number of female 
homeless veterans. Whereas when I was serving in Vietnam there 
were not a lot of women veterans coming back who ended up 
homeless, that is changing because of increased roles now of 
women in combat.
    But it is hard to answer your question, which is how do we 
prioritize. What I am sharing with you is that those last two 
cohorts may not be homeless now and, in fact, research shows it 
sometimes takes between eight and 12 years before these folks 
actually become homeless after they have exhausted other 
resources they have.
    So I think right now we are looking at a number of 
different cohorts, which we are going to have to treat in 
different ways with respect to the needs that they have.
    Senator Allard. Ms. Banaszynski.
    Ms. Banaszynski. I would like to just make a comment. I 
think that one of the things that we need to do is pick some 
priorities. And one of them is certainly the chronically 
homeless veteran, that person who has been on the streets the 
longest. That is where both VA and HUD have been focusing, and 
many of our programs have been focusing.
    However, I think that one of the things that we also need 
to do is close that front door. We need to do some prevention. 
When that person is discharged from the military, he needs to 
have the forms that he needs to prove that he is honorably 
discharged. He needs to have access to medical care with VA, 
which is often a problem in many communities, getting the 
transportation.
    We have an office in Pikeville, Kentucky that serves 
veterans. But the closest veterans hospital to Pikeville in 
their region is in Lexington, Kentucky, which is a lengthy trip 
over the mountains. Most of our veterans end up in a West 
Virginia facility in Johnson City for medical care just because 
of the transportation difficulties.
    I think many of the veterans are not being prepared 
adequately for the transition. They do not know what they are 
eligible for and they do not do not know to whom they should 
seek help if over the period of time their readjustment is not 
sufficient.
    I have a great deal of respect for the VA benefits 
specialists who work closely with me to get the correct forms 
in hand to prove what discharge they have, in many cases 
helping me upgrade discharges to the honorable status if that 
is possible, and also to connect people with disability 
benefits quickly.
    One other segment of the population that I think is 
underserved that we do not know about, and I applaud the 
Department of Labor for offering some demonstration grants, I 
think probably prodded by Congress, to serve that incarcerated 
veteran. Volunteers of America has two of the four 
demonstration grants to serve incarcerated veterans. And if you 
think housing is tough to find for the poor veteran, try to 
find permanent housing for the veteran that has a felony 
conviction and a long period of incarceration.
    We need a lot of different kinds of housing options, and 
home ownership I think is a goal for many. But in the short-
term, from transitional housing we need to have permanent 
rental housing available and HUD-VASH will do that.
    Senator Allard. Senator Reed.
    Senator Reed. Thanks very much, Mr. Chairman.
    And thank you ladies, not only for your testimony but for 
your devoted service to the veterans. I appreciate it very 
much. And thank you for your service as a veteran.
    Ms. Beversdorf. Thank you.
    Senator Reed. It seems to me we have come to a conclusion 
that we need more housing structurally and more services to 
support these veterans. Is that fair? Is that the bottom line?
    Ms. Beversdorf. Yes.
    Ms. Banaszynski. I think that would be a fair description.
    Senator Reed. And also, I think that we have a program that 
seems to work very well, the HUD-VASH program. And it now seems 
to have been subsumed by the Shelter Plus Care program. Can you 
comment from the field--do you sense that, as a result, the 
effort to help veterans has been eroded a bit because of the 
failure to fully fund HUD-VASH and now turning to Shelter Plus 
Care? Ms. Banaszynski.
    Ms. Banaszynski. In my community HUD-VASH vouchers are not 
available. There are none. They are just not available.
    I would like to say that, again, Shelter Plus Care is a 
valuable resource. We use it for many people, many persons in 
our communities, including veterans. However, what I said 
before is that the support services come from the local 
community. We make the pledge for those to do Shelter Plus 
Care. We are happy to do that when we have them available. But 
in many cases we are running short of supportive services.
    And the beauty of HUD-VASH is that the supportive services 
come from the organization that serves veterans, from the VA 
Administration, which would be very helpful. It does not mean 
the VA will do it alone, but maybe in partnership.
    I know you have been a sponsor, Senator Reed, of SELHA, 
which lays out the case that there are not enough support 
services to serve anybody necessarily, and not alone with 
homeless veterans. So the support services component that VA 
could offer would be important.
    Transitional housing is an important resource. Grant Per 
Diem program is an important resource. But the ability to place 
persons post-transitional housing is very, very difficult in my 
community.
    Senator Reed. The point you make is that the VA would best 
be able to provide services to homeless vets, not only in terms 
of logic but efficiency. The VA presumably would have some 
contacts with many of these veterans already, either at a 
clinic or health services. So the notion that they would also 
provide other supportive services seems to be a very efficient 
way to deliver the services, rather than having that veteran go 
to another community group or maybe two other community groups, 
which they must do through Shelter Plus Care.
    Ms. Banaszynski. Yes, sir. It seems efficient to me.
    Senator Reed. How do we deliver the services? And do we 
need more HUD-VASH vouchers?
    Ms. Beversdorf. I would definitely concur with the comment 
that, as I said, the program has been on the books for the last 
four or five years and we do not know where those vouchers are.
    Senator Reed. We are trying to find out. We hope Mr. 
Johnston will be back with the information.
    The other point that you raised, this notion of different 
cohorts of veterans, I think we have to look at realistically. 
Where you had a mass Army in World War II of people coming from 
across the country with various skills, they came into a system 
where you had the VA loans, which seemed to work very well for 
them.
    We might have a different challenge now with the emerging 
veterans population. And as you pointed out, particularly 
Vietnam-era veterans.
    Not only do we have the challenge of the different cohorts 
of veterans, but we also have the obvious challenge of funding. 
Please comment on the different veteran cohorts and whether we 
need different approaches to these cohorts.
    Ms. Beversdorf. As I mentioned, with respect to the Vietnam 
era veterans, we are talking about an aging population. About 
people who may have been able to overcome their mental health 
issues and their substance abuse issues, are aging and still 
need to have a place to live.
    As the Grant and Per Diem program, it is a limited program, 
and so there is no other place, outside perhaps some VA 
facilities, for these veterans to live. And if they never were 
meaningfully or gainfully employed in some kind of a position 
that allows them to afford rental housing, we have got a real 
problem.
    As I said, with respect to the women veterans, this is also 
a whole new area that we have to deal with because they have 
their own special set of problems. Oftentimes they have 
children. One of the things the VA has certainly shown is the 
fact that they often have had sexual trauma. They have perhaps 
experienced sexual trauma or sexual harassment. And so they are 
dealing with a whole different type of mental problem and 
perhaps also substance abuse problems. And as I said, they may 
also have children who do not qualify for VA benefits.
    At this point, the VA has only eight programs throughout 
the country for homeless women veterans and there is a waiting 
list at all of them. And while these programs are not under 
this Committee's jurisdiction, funding for the special needs of 
these women is certainly going to be necessary.
    And then, of course, there are the young people returning 
from Iraq and Afghanistan. And the kinds of situations that 
they are experiencing are just phenomenal in terms of the 
things that they have seen and witnessed in the battlefield. 
Many people call the NCHV office to say ``I am homeless'' or 
``help me, where can I go?''
    NCHV gets as many as 300 calls a month on our 800 toll-free 
line from people who say they do not have a job, they do not 
know where to go, they do not know where to turn, they are 
sleeping on somebody's couch. They have not yet exhausted all 
of their resources, and luckily the VA and the Department of 
Labor have been addressing those needs through the Grant and 
Per Diem and HVRP programs. But the problem is, there is still 
a large number of veterans who are not even going to the Grant 
and Per Diem programs. They do not even know about them. They 
are not ready to go to the VA.
    So these issues are not going to go away. And we are going 
to have to deal with it. But in terms of housing, I think HUD 
has to begin to have more of a focus on what is happening with 
respect to our Nation's veterans. How many veterans are out 
there and actually are housed in HUD housing? Do we know that? 
I am not sure whether that is the case.
    As we find out where people are living and who is living in 
HUD housing, we need to ask about military status so that we 
know if that person is a veteran or not. Maybe there needs to 
be more policy guidance from HUD with respect to whether we are 
looking hard enough for these veterans and making sure that 
they do get special recognition and special attention.
    In fact, I would also venture to suggest that maybe HUD 
needs to have a liaison within the agency to actually handle 
veterans' needs. I believe that such a position has not been 
filled for quite some time.
    So these are all kinds of things that would really raise 
the visibility of the needs of veterans.
    Senator Reed. Thank you. My time has expired.
    Senator Allard. Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman.
    I want to thank both of you for your testimony.
    Ms. Beversdorf, I asked the Secretary to grade our 
programs. I know you are a nurse originally by profession and 
now your advocacy here. How would you grade them?
    Ms. Beversdorf. Which programs are you talking about?
    Senator Menendez. Our overall effort here in terms of--I 
have listened to your testimony, I have read your testimony. Is 
B+ a fair grade?
    Ms. Beversdorf. I hate to put grades on things for the 
record.
    Senator Menendez. I get recorded all the time, so do not 
feel badly.
    Ms. Beversdorf. I just think we have a long way to go.
    Senator Menendez. I have a problem listening to your 
testimony and hearing that people who have honorable discharges 
and who work every day in honorable jobs and are veterans 
cannot find a place to live. It just seems to me that that 
cannot be a grade that is as high as a B+.
    I do not understand when 200,000 veterans are homeless on 
any given night and 400,000 over the course of a year 
experience some form of homelessness. And we go on with 2,000 
vouchers that have been authorized but not allocated, and that 
is a B+.
    I do not understand the answer that I got to my question, 
which I think is somewhat amorphous, about how we follow up on 
people after transitional housing to find out whether they 
really have housing at the end and for how long they have 
housing or whether they just recycle in the process, which 
would tell us a lot about whether our policies are effective or 
not. That is not a B+.
    So I appreciate your testimony. To me it is compelling 
insofar as I think a grateful Nation does much better than 
that.
    And I am really concerned about the next generation of 
Iraqi and Afghani veterans who I hear consistently from who 
return and find themselves with difficulties in their 
employment, and therefore difficulties with a place to live. 
And that is a whole new universe above and beyond all of those 
who have served over a long period of time. I think we have 
some significant challenges ahead. I think we should recognize 
those challenges and try to deal with that.
    I would love to be giving out B+'s but I just do not think 
that is the grade that I would be giving.
    Ms. Beversdorf. Senator, if I may comment, I think one of 
the biggest problems or concerns I have is overall the American 
public is not aware of homelessness among veterans. I have been 
working with NCHV for about a year and I have to say that most 
of the time when I tell people who I work for the comment is 
twofold. The first is ``I did not know there were any homeless 
veterans.'' And secondly, if there are, ``certainly the VA must 
take care of those people.'' From this hearing we know already 
that because of the resources and the number of homeless 
veterans, the second assumption is not true.
    But the other thing that is more frustrating is the 
perception of who the homeless veteran is. Oftentimes there is 
an assumption that the homeless veteran is only the panhandler 
on the street, the person who holds up the little cardboard 
sign asking for a handout. Some are, in fact, under the bridges 
and on the streets. When, in fact, there are so many out there 
who are living already in transitional housing.
    But there are those who are really striving to get their 
lives back in order in terms of getting the help they need, on 
health needs, on trying to get a job, on trying to find a 
house.
    And that is why I really appreciate that you are having 
this hearing, Senator, today to raise the American people's 
awareness of what this problem is today and what it is going to 
be in the future if we do not do something about it.
    Senator Menendez. I appreciate your statement.
    I will just tell you, from where I come from, the reality 
is that housing authorities that are at the tail end of--or at 
the frontlines, I should say, of providing, for example, some 
of these programs, they do not have the wherewithal--I will not 
even say they do not have the desire. But they certainty do not 
have the wherewithal to actively go out for veterans and 
proselytize them to the opportunities that exist because they 
are already overwhelmed with the housing challenges they meet.
    So to suggest that just by giving some type of recognition 
in a wide spectrum of those who need it, who need housing, and 
to say that veterans are part of that, that that is going to 
take care of the problem, that is not going to take care of the 
problem. The previous panel made some mention of that as one of 
the things. That has just adding more people to a very 
difficult and finite universe of opportunities for housing. 
That is not going to proactively help veterans at the end of 
the day.
    So I look forward to hopefully the Committee being 
advocates, Mr. Chairman, of trying to find out some efficient 
and effective ways in which we can expand the universe, and 
even looking at setting aside for veterans specifically within 
this housing opportunity.
    Thank you.
    Senator Allard. I have one more question and then we will 
go to other members. Maybe one more question area. And I want 
to ask a few questions myself about veterans rental housing.
    Ms. Beversdorf, you stated in your testimony that veterans, 
and I quote, ``Veterans of working age and without disabilities 
are not served through existing rental housing assistance 
programs due to the program designs.''
    How do you mean that? Is it because they do not give 
preference to veterans? Or are there some other flaws there?
    Ms. Beversdorf. It is really that there is no particular 
preference to veterans. That is what makes it so difficult. 
There are certainly other categories of homeless people who are 
equally as deserving with respect to looking for housing. 
Unfortunately, there is no special recognition as far as that 
veterans category is concerned. So that is what I had in mind.
    I do not know if you wanted to add something.
    Ms. Banaszynski. I would like to add, too, that one of the 
things that you will find, not just veterans, but if you look 
at the jurisdictions around the country there is not one 
community, State or city in the country where a person working 
full-time at minimum wage can afford housing in this country.
    So it should come as no shock to us that veterans who are 
coming back with some limited skills and who are trying to 
increase those skills would have difficulty gaining access to 
the private housing market. I want to know why subsidy has 
become a dirty word in this country. I got my college education 
subsidized. I got my mortgage subsidized. Veterans certainly 
have earned the right to subsidy in this country. And if it 
takes permanent housing rental subsidies to get people in--
there is not a lack in every market of affordable housing, 
although in many markets affordable housing is not available 
even if we had a subsidy to apply to the person's needs.
    But I think that we have to look at a whole host of things. 
My organization provides four homeless veterans reintegration 
projects, which are employment and training programs. It is 
kind of the chicken and the egg. Can you get them a job if they 
do not have a house to keep their clothes? It is one and the 
other. So we end up having to find places for people to live in 
order to stabilize their employment.
    And then, when they are full-time working persons and they 
earn less than the housing wage or the cost of housing in their 
area, they are not able to get into the housing market and we 
are not able to get for them the subsidies that they need to 
make rental housing affordable and for them to get it in many 
markets in the country.
    Senator Allard. Senator Reed.
    Senator Reed. I want to thank you both for very, very 
thoughtful testimony. I concur with your comment that most 
people do not see this as a big problem. They do not think in 
terms of homeless veterans.
    But one of the other revelations today is the number of 
very poor veterans. I think there is a presumption, 
particularly looking at the most recent generation of veterans 
who have to have a GED, high school, or college education to 
get in and then they are trained so well, et cetera, that there 
is a perception that they must be making enough money to at 
least rent an apartment or even get into the home ownership. So 
I think your testimony has been very revealing.
    Ms. Banaszynski, I think, too, we subsidize a lot of things 
around here. So I do not think we have to be necessarily toxic 
to subsidizing veterans. I think we should be doing that.
    So we can do more and we should do more. Thank you very 
much.
    Senator Allard. OK, once again, I would like to thank all 
of our witnesses for being here today. I found this opportunity 
to learn more about our veterans housing programs both 
interesting and informative.
    As Subcommittee Chairman, I intend to become more active in 
this area of our jurisdiction. Your testimony will be helpful 
as we continue to explore these programs.
    The record will be remain open for 10 days should members 
wish to submit any additional questions to the witnesses. 
Witnesses, we would appreciate your prompt response to the 
questions and would ask that you please respond to them within 
10 days.
    Thank you to everyone for attending the hearing of the 
Housing and Transportation Subcommittee. The Subcommittee is 
adjourned.
    [Whereupon, at 4:21 p.m., the hearing was adjourned.]
    [Prepared statements and response to written questions 
follow:]
             PREPARED STATEMENT OF SENATOR ROBERT MENENDEZ
    Chairman Allard, Ranking Member Reed, my fellow Colleagues, thank 
you for your leadership in holding this hearing and for offering the 
opportunity to discuss the housing needs of our nation's veterans.
    Today, as we brave men and women risking their lives in Iraq and 
Afghanistan, the need to reassess and understand how we can be more 
effective in helping these brave troops when they retire from active 
duty is all the more pertinent. I am disappointed that 25 percent of 
our country's homeless are the very men and women who so proudly served 
our country. Particularly upsetting is that in my State of New Jersey, 
there are about 8,000 homeless veterans.
    My State faces particularly challenging circumstances with less and 
less affordable housing and waiting lists for Section 8 vouchers. Over 
the past few years our food pantries and soup kitchens have seen a 
significant increase in demand by families and individuals who are 
spending more of their monthly income on housing leaving them with less 
to spend at the grocery store. Considering the unique needs of our 
nation's veterans and the difficulty to access affordable housing, it 
is no wonder that we have so many veterans struggling on the streets. 
Clearly we must refocus our efforts to ensure that we are doing our 
part for our veterans, especially after the sacrifice they have made 
for our country.
    As I've traveled around New Jersey, I've been hearing from troops 
about the confusion and challenges they face during the transition from 
receiving services at the Department of Defense to the Department of 
Veterans Affairs. In response, yesterday I introduced legislation to 
address the lapse in health care and access to services that many face 
during this difficult process. The bill would expand the important work 
done by Veteran Service Organizations and other non-governmental 
organizations by providing funding for ``navigators''--individuals who 
can assist in a serviceperson's transition between the DOD and VA 
healthcare systems to ensure a positive continuum of care.
    The ``navigator'' concept is not new. It is similar to the Patient 
Navigator demonstration program I introduced and which was subsequently 
enacted into law. Often those individuals most in need, particularly 
those service members who are seriously injured, suffering from 
psychological illnesses, female service members, and those in the 
National Guard and Reserves, have the hardest time accessing the care 
or services they deserve. Designating a specialist or ``Sherpa'' to 
help those who could fall through the cracks and get left without care, 
is the kind of preventive measure I hope will keep many veterans from 
becoming homeless in the first place. On any given night across the 
country, there are more than 200,000 homeless veterans. This is 
unacceptable. We need to be doing a better job of helping theses 
honorable Americans access housing resources and increase federal 
support for these services.
    I look forward to the testimony to learn more about what we are 
currently doing for our veterans and to find out where we can improve 
to ensure that no one goes without a place to call home. Thank you Mr. 
Chairman.
                                 ______
                                 
                  PREPARED STATEMENT OF MARK JOHNSTON
Deputy Assistant Secretary for Special Needs, Department of Housing and 
                           Urban Development
                             August 2, 2006
    Chairman Allard, Ranking Member Reed, Members of the Subcommittee, 
I am pleased to be here today on behalf of Secretary Alphonso Jackson 
and the U.S. Department of Housing and Urban Development. The Secretary 
recognizes the responsibility America has to its veterans especially 
those who are homeless.
    It is estimated that veterans account for approximately one quarter 
of the homeless population. For the past 20 years HUD has served 
homeless veterans as well as the other homeless subpopulations in the 
United States. To better serve this population, in 1994 HUD developed 
the Continuum of Care planning and grant process, which calls for 
communities to develop local plans to solve homelessness. Continuum of 
Care is a community-led effort that involves a diverse group of 
organizations, including state and local governments, public housing 
agencies, non-profit providers, foundations, and homeless and formerly 
homeless persons. The Continuum identifies the community's housing and 
service needs, as well as the existing inventory to address those 
needs. The Continuum then assesses remaining needs and determines how 
to best address them by proposing a comprehensive plan and specific 
project requests for HUD funding. Since 1994, the Continuums have 
proven to be an effective coordinating body for fighting homelessness; 
among the reasons for their effectiveness are the broad-based 
partnerships they have forged at the local level. HUD is committed 
through this Continuum of Care to ending Chronic Homelessness.
    To underscore HUD's continued commitment to serve homeless 
veterans, this year's Continuum of Care application materials encourage 
organizations that represent homeless veterans to be at the planning 
table and require that communities identify the number of homeless 
persons who are veterans so that each community can more effectively 
address their needs. In collaboration with the Department of Veterans 
Affairs, HUD also strongly encourages grant applicants to use VA's 
CHALENG data in assessing the needs of homeless veterans within their 
community.
    In 2005, HUD awarded nearly $1.3 billion in targeted homeless 
assistance. Homeless veterans are eligible for all of the Department's 
homeless assistance programs, and HUD awarded funding to 90 percent of 
all of veteran-specific applications received. HUD has also established 
a Veteran Resource Center (HUDVET) in consultation with national 
veteran service organizations. HUDVET's goal is to provide veterans and 
their family members with information on HUD's community-based programs 
and services. It is the Department's hope that, equipped with this 
knowledge, armed forces personnel and veterans can become more involved 
in the community-based planning and decision-making process as well as 
utilization of services and local resources.
    HUD is involved with a number of interagency initiatives that focus 
on solving homelessness in this country. One of these initiatives is 
the VA's Secretarial Advisory Committee on Homeless Veterans, an 
important advisory group that has addressed chronic homelessness among 
veterans. HUD is also involved with the Collaborative Initiative to 
Help End Chronic Homelessness, a joint initiative with HUD, VA and HHS. 
HUD provided the housing needed for homeless persons, while the VA and 
HHS provided the needed supportive services to help them stabilize 
their lives.
    Another promising joint initiative between HUD and the Department 
of Labor that serves homeless veterans is a demonstration to provide 
housing and needed employment assistance. Local partners in this 
demonstration provide additional needed services such as health care, 
education, and life skills.
    In consultation with the U.S. Interagency Council on Homelessness, 
chaired by Secretary Alphonso Jackson, HUD developed a special 
initiative to help persons who have been homeless for years and are 
also chronically inebriated. HUD provided funding for permanent 
housing, and community partners provided needed supportive services. 
Twelve programs in eleven cities received funding. Homeless veterans 
are among those served by these homeless initiatives.
    In addition to these initiatives, HUD participates in national 
homeless conferences. For instance, as the Director of HUD's homeless 
programs, I was in Denver this week speaking at the Department of 
Labor's Veterans National Grantee Conference, along with my colleagues 
from the VA and Department of Labor. These conferences provide an 
opportunity to collaborate with other organizations that share the goal 
of solving homelessness.
    HUD has developed two technical assistance guidebooks to benefit 
homeless veterans. Coordinating Resources and Developing Strategies to 
Address the Needs of Homeless Veterans describes programs serving 
veterans that are effectively coordinating HUD homeless funding with 
other resources. The second guidebook, A Place at the Table: Homeless 
Veterans and Local Homeless Assistance Planning Networks, describes the 
successful participation of ten veterans organizations in their local 
Continuums of Care. Both of these guidebooks are available on HUD's 
website.
    The Administration is committed through the Continuum of Care 
process to ending chronic homelessness, as well as solving homelessness 
among veterans and all Americans. HUD will continue to work with 
federal, state and local partners to this commitment.
    Mr. Chairman, I will be glad to address any questions the 
Subcommittee may have.
                                 ______
                                 
                   PREPARED STATEMENT OF KEITH PEDIGO
       Director of Loan Guaranty, Department of Veterans Affairs
                             August 2, 2006

    Mr. Chairman and members of the Subcommittee, I appreciate the 
opportunity to appear before you today to discuss the VA Loan Guaranty 
Program. In my testimony I would like to highlight VA's commitment to 
meeting the housing needs of our nation's veterans. I am pleased to be 
accompanied by Mr. Pete Dougherty, Director, Homeless Veterans 
Programs. Mr. Dougherty will discuss issues pertaining to homeless 
veterans.
    The Department of Veterans Affairs home loan program serves a 
clientele which is diverse in many ways. The only common denominator of 
this clientele is service in the Armed Forces of the nation. Since the 
inception of these programs in 1944 the objective has been to assist 
eligible veterans to become homeowners. Veterans are assisted by 
increasing their competitiveness in the marketplace for credit. The VA 
programs are intended to benefit men and women because of their service 
to the country.
    The Loan Guaranty Program provides a guaranty to lenders making 
loans to veterans and servicemembers to purchase homes. Other important 
program benefits include making direct loans to Native American 
veterans living on trust lands, and providing Specially Adapted Housing 
(SAH) grants to severely disabled veterans. Additionally, services and 
assistance are provided in coordination with the Vocational 
Rehabilitation and Employment (VR&E) program for disabled veterans 
eligible for Independent Living Services and SAH benefits.
    Since the home loan guaranty program was enacted, as part of the 
original Servicemen's Readjustment Act of 1944 (the GI Bill), VA has 
guaranteed over 18 million home loans totaling almost $900 billion to 
veterans to purchase or construct a home, or refinance another home 
loan on more favorable terms. The VA home loan program has made 
mortgage credit available to many veterans whose loans otherwise would 
not have been made.
    VA guaranteed loans are made by private lenders, such as banks, 
savings & loans, or mortgage companies to eligible veterans for the 
purchase of a home which must be for their own personal occupancy. To 
get a loan, a veteran must apply to a lender. If the loan is approved, 
VA will guarantee a portion of it to the lender. This guaranty protects 
the lender against loss up to the amount guaranteed and allows a 
veteran to obtain favorable financing terms. There is no maximum VA 
loan, but lenders will generally limit VA loans to $417,000. This is 
because lenders sell VA loans in the secondary market, which currently 
places a $417,000 limit on the loans. In certain high cost areas, such 
as Hawaii and Alaska, Guam and the U.S. Virgin Islands, this 
conventional loan limit is currently $625,000. For loans up to this 
amount, it is usually possible for qualified veterans to obtain no 
downpayment financing. A veteran's basic entitlement is $36,000 (or up 
to $104,250 for certain loans over $144,000). Lenders will generally 
loan up to 4 times a veteran's available entitlement without a 
downpayment, provided the veteran is income and credit qualified and 
the property appraises for the asking price.
    Currently, eligible veterans and service personnel may obtain loans 
for the following purposes:

      To buy or build a home;

      To buy a residential unit in a condominium project;

      To repair, alter or improve a home;

      To refinance an existing home loan.

      To buy a new or used manufactured home and/or lot;

      To buy and improve a manufactured home lot on which to 
place a unit owned and occupied by the veteran;

      To improve a home through installation of a solar heating 
and/or cooling system or other energy efficient improvements;

      To refinance a loan currently guaranteed, insured or made 
by the VA for the purpose of lowering the interest rate; and

      To refinance a manufactured home in order to purchase the 
lot on which the home is or will be placed.

    Like other homeowners, some veterans experience financial hardships 
that affect their ability to make loan payments. When this occurs, VA 
helps veterans retain their homes through supplemental loan servicing 
efforts. VA offers financial counseling, and may even intervene 
directly with the lender on behalf of the veteran to work out a 
repayment plan. In limited circumstances, VA buys the loan from the 
holder and allows the veteran to make payments directly to VA. In the 
event of foreclosure, VA usually acquires the property from the 
mortgage loan holder. The property is then transferred to a private 
contractor to be sold on VA's behalf.
    Successful interventions help veterans and save substantial amounts 
of money by avoiding claim payments. In 2005, VA avoided claim payments 
totaling $175 million through supplemental servicing efforts. It should 
be noted that while this savings is not part of the program's operating 
budget account, it exceeds the total amount requested for 2007.
    Mr. Chairman, this concludes my testimony. I greatly appreciate 
being here today and look forward to answering your questions.
                                 ______
                                 
                 PREPARED STATEMENT OF PETER DOUGHERTY
 Director of Homeless Veterans Programs, Department of Veterans Affairs
                             August 2, 2006

    Mr. Chairman, and Members of the Committee, I am pleased to be here 
today to discuss the Department of Veterans Affairs' programs and 
services that help homeless veterans achieve their housing needs. I am 
pleased to be with Mr. Keith Pedigo, Director of VA's Loan Guaranty 
Service. Thank you for inviting us to testify today.
    Homelessness for any person tugs at our conscience; however, for 
those who have honorably served our nation in the military, 
homelessness should be inconceivable. VA's commitment is, and remains, 
ending chronic homelessness among veterans. To meet that goal, VA has 
made, and continues to create opportunities to bring together those 
veterans in need of assistance with the wide range of services and 
treatment VA provides.
    As the largest provider of direct services to homeless people in 
the nation, VA provides health care and services to more than 100,000 
homeless veterans each year. We do this by aggressively reaching out 
and engaging veterans in shelters and in soup kitchens, on the streets 
and under bridges. By not waiting for veterans to contact us and by 
proactively offering services, VA helps some 40,000 more veterans each 
year than would otherwise know of their eligibility for assistance. We 
connect homeless veterans to a full complement of VA health care and 
benefits, including compensation and pension, vocational 
rehabilitation, loan guaranty and education services.
    We continually work to reach and identify homeless veterans and 
encourage their enrollment in VA's health care system. Once they are 
enrolled, we furnish timely access to psychiatric evaluations and 
treatment; engagement in treatment programs for substance use 
disorders; and, access to quality primary health care. Our performance 
measures help ensure that homeless veterans receive comprehensive 
follow-up health care. In addition, it is extremely important that 
these veterans are seen by mental health specialists and a case 
manager. Thus, our objective is to help these veterans receive 
coordinated needed care and other VA benefits, which, in turn, furthers 
their chances of obtaining and maintaining independent housing and 
gainful employment. At the least, the provision of such VA assistance 
should enable most to live as independently as possible given their 
individual circumstances.
    We work very closely with our partners at the Department of Labor's 
Veterans' Employment and Training Service to ensure those homeless 
veterans who want and need employment have an opportunity to become 
productive, tax-paying members of society. This is very important 
because we understand from many formerly homeless veterans that having 
an opportunity for gainful employment was vital to their being able to 
overcome psychological barriers that contributed to their homelessness.
    With the support of Congress, VA continues to make a significant 
investment in the provision of services for homeless veterans. We 
expect to spend $225 million this year (fiscal year 06). These costs 
cover homeless veterans treatments and programs to assist homeless 
veterans.
    The President's budget request for FY 2007 calls for a nearly $20 
million increase above that level. Services and treatment for mental 
health and substance use disorders are essential both to the already 
homeless veteran and to those at risk for homelessness. VA's overall 
mental health funding increased by $339 million this year, and we use 
those funds to enhance access to mental health services and substance 
use treatment programs. Increasing access to and availability of mental 
health and substance use treatment services is critical to ensure that 
those veterans who live far away from VA health care facilities are 
able to live successfully in their communities.
    Equally important is the work of the Veterans Benefits 
Administration (VBA). Mr. Pedigo will provide you with details of the 
Loan Guaranty Services programs including those that are of particular 
assistance to homeless veterans. I want to focus on the Compensation 
and Pension Service that strives to provide timely processing and 
payment of benefits claims to homeless veterans. As a result of VBA's 
concerted efforts, thousands of veterans entitled to benefits receive 
them.
    As part of VA's efforts to eradicate homelessness among veterans, 
we work in a variety of venues with multiple partners at the Federal, 
state, territorial, tribal and local government levels. We have 
hundreds of terrific community non-profit and faith-based service 
providers working in tandem with our health care and benefits staff to 
improve the lives of tens of thousands of homeless veterans each night. 
We have more than 4,000 beds for homeless veterans available under our 
domiciliary care and other VA operated residential rehabilitation 
programs.
    We are finalizing a one-year, follow-up study of 1,350 veterans 
discharged from VA's residential care programs. Results indicate that 
we are achieving long-term success for the well-being of these 
veterans, with four out of five veterans who have completed these 
programs remaining appropriately housed one year after discharge. 
Through such effective, innovative and extensive collaboration, VA is 
able to maximize the opportunities for success.
    We firmly believe that the best strategy to prevent homelessness is 
early intervention. As the Committee knows, veterans returning from the 
present conflicts in Iraq and Afghanistan have two years of eligibility 
for VA health care at no cost for conditions possibly related to their 
combat service. We believe that this eligibility policy allows our 
clinical staff to identify additional health problems that may, if left 
untreated, contribute to future homelessness among those veterans. This 
policy is the best option to treat those in need today and prevent more 
acute problems later.

Interagency Council on Homelessness, Intergovernmental and Local 
        Relationships
    VA is an active partner with nearly all Federal departments and 
agencies that provide services to homeless veterans. We participate in 
a variety of interagency collaborative efforts to assist homeless 
veterans and continue to actively participate in the United States 
Interagency Council on Homelessness (ICH). Secretary Nicholson is the 
immediate past chair of the ICH, and VA has participated in each of 
ICH's cabinet-secretary level meetings. During Secretary Nicholson's 
tenure as chair of the ICH, VA hosted regular meetings of the ICH 
Senior Policy Group. While Secretary Nicholson's term as ICH Chair 
ended last year, VA continues its participation in interagency and 
collaborative initiatives. As Director of the Homeless Veterans 
Programs, Secretary Nicholson asked me to serve as VA's representative 
to the Council's Senior Policy Working Group. These efforts have 
brought the level of veteran involvement in state and local plans to 
end homelessness to an unprecedented level.
    The ICH has worked closely with VA, and has also encouraged the 
development of state and local plans across the nation to address both 
the needs and services available to veterans. To date, this is 
demonstrating positive results as we increasingly see states and local 
communities include VA employees, state and county veteran service 
officers, veteran service organization members and veteran specific 
service providers in both the planning and implementation of local 
strategies to end chronic homelessness.
    As part of an ongoing initiative, VA has worked closely over the 
last three years with the Department of Housing and Urban Development 
(HUD) and the Department of Health and Human Services (HHS) to assist 
the chronically homeless with housing, health care and benefits 
coordination. Under this initiative, funding was provided to eleven 
communities that developed quality plans to house and provide 
wraparound services. As the result of our collaboration, nearly 1,500 
persons have been seen, and nearly 600 persons housed. Thirty percent 
of those receiving services under this initiative are veterans. This 
effort is based on the premise that housing and treating those who are 
chronically homeless will decrease total costs for health care, 
emergency housing, related social services and justice system costs. VA 
is pleased to be a partner in this effort. We are also pleased to lead 
the effort to evaluate this project and look forward to sharing our 
findings with you when they become available.
    Local communities are our front lines--the places where we meet and 
provide services to veterans. For that reason, VA has a long tradition 
of engaging and working with local providers in their communities. VA 
collaborates annually with communities across the United States in 
Project CHALENG (Community Homelessness Assessment, Local Education and 
Networking Groups) for veterans. At regularly scheduled CHALENG 
meetings, VA works with faith-based and community homeless service 
providers; representatives of Federal, state, territorial, tribal and 
local governments; and homeless veterans, themselves. Our meetings and 
our annual reports are designed to identify met and unmet needs for 
homeless veterans, aid in the community effort to aid homeless 
veterans, and to develop local action plans to address those identified 
needs.
    CHALENG is integral in enabling VA medical centers and regional 
offices to strengthen their partnerships with community service 
providers. This leads to better coordination of VA services as well as 
the development of innovative, cost-effective strategies to address the 
needs of homeless veterans at the local level. It shows us what is 
being done effectively and what pressing unmet needs remain. This also 
helps us to establish, as part of local needs, the number of veterans 
who are homeless on any given night. While there are still far too many 
veterans among the homeless, we are making progress, and their numbers 
are coming down. Ten years ago, based upon the best available 
estimates, there were as many as 250,000 veterans among the homeless on 
a given night. Last year we found there were less than 200,000. This 
year, we estimate the number of homeless veterans on any one day will 
be less than 195,000, which represents a decline of better than 20 
percent over the last six years. This progress demonstrates to us that 
this scourge is not unmanageable and that our collective efforts are 
realizing success. We are confident that our continued efforts will 
achieve our goal of ending chronic homelessness among veterans.
    During the past five years VA, the Departments of Housing and Urban 
Development, Health and Human Services and Labor, and the Interagency 
Council on Homelessness have sponsored a series of policy academies. 
The purpose of these academies is to bring together a broad group of 
professionals from a variety of disciplines who work with homeless 
populations in their respective states to improve the coordination of 
statewide efforts to aid all homeless. This effort has been very 
successful. And many states have translated this experience into 
concrete improvements in the coordination of their benefits and 
services at the local level, i.e., within, between, and among the 
cities and counties in their states. VA is pleased to have been an 
active partner in this effort. Senator Martinez chaired the US 
Interagency Council on Homelessness when this effort began and I would 
be remiss in not noting his leadership in getting this concept into 
concrete actions. This approach developed by the National Governor's 
Association has aided every state to develop a coordinated plan to 
address homelessness in their states.

VA Involvement in Stand-Downs
    VA's involvement in stand-downs is another avenue by which VA 
continues its collaborative outreach at the local level through 
coordination of our programs with other departments, agencies, and 
private sector programs. Our calendar year 2005 report was recently 
completed and last year VA recorded participation in approximately 100 
stand-down events in 36 states. In calendar year 2005, VA, along with 
hundreds of veteran service organization representatives, community 
homeless service providers, state and local government offices, faith-
based organizations, and health and social service providers, provided 
assistance to nearly 17,000 veterans. Of note is an increase in the 
number and percentage of veterans who attended these events. The latest 
information shows that more than 1,700 spouses, overwhelmingly women, 
and more than 1,100 children attended these events. More than 13,000 
volunteers and VA employees participated in these events last year.

Homeless Providers Grant and Per Diem Program
    VA's largest program involving local communities remains our 
Homeless Providers Grant and Per Diem Program. As you are aware, this 
highly successful program allows VA to provide grants to state and 
local governments, and faith-based and other non-profit organizations 
in developing supportive transitional housing programs and supportive 
service centers for homeless veterans. These organizations may also use 
VA funds to purchase vans to conduct outreach and provide 
transportation for homeless veterans to needed health care and 
employment services.
    Last year, this program achieved one important goal: to authorize 
funding for at least one transitional housing program in each state. We 
did this in part by targeted funding to states that had no or limited 
veteran-specific transitional housing program. We are continuing to 
reach out to tribal and territorial areas to ensure increased 
opportunities for these programs to operate in those locations. Since 
the program was authorized in 1992, VA has obligated more than $300 
million to the program. These funds have helped to develop close to 
10,000 transitional housing beds (of which 78 percent are operational) 
and 23 independent service centers and to purchase 180 vans to provide 
transportation for outreach and connections with services.
    We are reviewing applications based upon the latest Notice of 
Funding Availability and the Secretary will announce those selections 
in September. We are hopeful that with this latest round of funding we 
will be able to add between 500 and 1,000 new transitional housing beds 
across the nation.

Technical Assistance Grants
    With enactment of Public Law 107-95, VA was authorized to provide 
grants to entities with expertise in preparing grant applications. We 
have awarded funding to two entities that are providing technical 
assistance to non-profit community and faith-based groups that are 
interested in seeking VA and other grants relating to serving homeless 
veterans. We have awarded grants to the National Coalition for Homeless 
Veterans (NCHV) and Public Resources to aid us in this effort. We are 
hopeful that this effort, which we are evaluating regularly, is helping 
to connect veteran specific service providers to other governmental and 
non-government resources.

Grants for Homeless Veterans with Special Needs
    VA also provides grants to VA health care facilities and existing 
grant and per diem recipients to assist them in serving homeless 
veterans with special needs (women, including women who have care of 
dependent children, chronically mentally ill, frail elderly and 
terminally ill). We initiated this program in FY 2004 and provided 
special needs funding to 29 organizations totaling $15.7 million.

Grants to Meet National Fire and Safety Codes
    VA has awarded grants to existing grantees to assist them in 
meeting national fire and safety codes. VA has offered funding three 
times and awarded a total of $5.36 million for this program. These 
grants have been awarded to all existing transitional housing that 
applied for funding. VA Medical Centers' Fire and Safety Engineers have 
worked closely with existing grant recipients to identify any code 
violations and to estimate the cost of correcting any such 
deficiencies. We believe we have been able to address all requests to 
meet fire and safety needs.

Residential Rehabilitation and Treatment Programs (RRTPs)
    VA's Domiciliary Care for Homeless Veterans (DCHV) Program, which 
was recently renamed as the ``Residential Rehabilitation and Treatment 
Program,'' provides a full range of treatment and rehabilitation 
services to many homeless veterans. Over the past 17 years, VA has 
established 34 DCHV programs providing 1,873 beds. Since 1987, there 
have been over 71,000 episodes of treatment in the DCHV program. VA 
continues to improve access to the services offered through these 
programs. In FY 2005, DCHV programs treated 5,394 homeless veterans, 
while VA funded the development of nine new DCHV programs offering a 
total of 400 new beds. In FY 2006, VA funded the development of two 
additional DCHV programs totaling 100 beds. In addition to the DCHV 
program, homeless veterans receive treatment and rehabilitation 
services in the Psychosocial Residential Rehabilitation Treatment 
Program (PRRTP). Currently there are 72 PRRTP programs with a total of 
2,020 beds.

Staffing at VBA Regional Offices
    Homeless Veterans Outreach Coordinators (HVOCs) at all VBA regional 
offices work in their communities to identify eligible homeless 
veterans, advise them of VA benefits and services, and assist them with 
claims. The coordinators also network with other VA entities, veteran 
service, organizations, local governments, social service agencies and 
other service providers to inform homeless veterans about other 
benefits and services available to them. In FY 2005, VBA staff assisted 
homeless veterans in 34,631 instances. They contacted 4,247 shelters, 
made 4,803 referrals to community agencies, and made 7,416 referrals to 
the Veterans Health Administration (VHA) and the Department of Labor's, 
Homeless Veterans Reintegration Programs (HVRP).
    Since the beginning of FY 2003, regional offices maintain an active 
record of all compensation and pension claims received from homeless 
veterans. Procedures for the special handling and processing of these 
claims are in place. From FY 2003 through FY 2005, VBA received 13,833 
claims for compensation and pension from homeless veterans. Of those 
claims, 56 percent were for compensation and 44 percent were for 
pension. Of the compensation claims processed, 37 percent were granted, 
with an average disability rating of 44.20 percent. 9.9 percent of 
claimants were rated at 100 percent disabled. Of the total claims 
denied, 48 percent were due to the veteran's disability not being 
service connected. The average processing time for all compensation 
claims of homeless veterans was 151 days. Of the pension claims 
processed, 73 percent were granted. Twenty-one percent of the claims 
denied were due to the veteran's disability not being permanent and 
total. The average processing time for all pension claims of homeless 
veterans was 102 days.

Multifamily Transitional Housing Loan Guaranty Program
    Public Law 105-368 authorized VA to establish a pilot program to 
guaranty up to 15 loans or $100 million, whichever first occurs, for 
multifamily transitional housing. Since September 2002, Claude 
Hutchison, Jr., Director of VA's Office of Asset Enterprise Management, 
has been the lead for the Department in implementing the program. Many 
complex issues, often varying from jurisdiction to jurisdiction, 
surround implementation, and VA has worked closely with veteran service 
organizations, veteran-specific housing providers, faith-based 
organizations, clinical support service programs, VA medical care 
staff, state, city and county agencies, homeless service providers, and 
finance and housing experts. We are also using consultants to assist us 
with our evaluation of potential sites and providers of housing 
services.
    VA has issued two final commitments for guaranteed loans for 
transitional housing projects that will, when completed, provide 285 
new beds for homeless veterans. Those projects are: Catholic Charities 
of Chicago, Chicago, Illinois, with 141 beds; and, Vietnam Veterans of 
San Diego, San Diego, California, with 144 beds. The Catholic 
Charities' project is under construction and is expected to open and be 
serving veterans some time this fall. Vietnam Veterans of San Diego is 
expected to close on its guaranteed loan by the end of the year, which 
leaves funding available for up to thirteen remaining program loans or 
until the remaining $92.1 million in program funds have been 
guaranteed.

Coordination of Outreach Services for Veterans At-Risk of Homelessness
    VA, together with DOL and with additional assistance from the 
Department of Justice (DOJ), has helped develop demonstration projects 
providing referral and counseling services for veterans who are at risk 
of homelessness and are currently incarcerated. Currently, VA and DOL 
have seven sites providing referral and counseling services to eligible 
veterans at risk of homelessness upon their release from correctional 
institutions. While the majority of these demonstration projects work 
with state prisons, our collaboration includes one demonstration 
project with a Federal Bureau of Prisons institution, and another with 
a county jail. Local staff from both the VHA and VBA are aiding 
veterans at each demonstration site receive information about available 
VA benefits and services.
    Our commitment to these demonstrations programs is strong. We 
believe that many of these veterans will, with assistance, return to 
productive lives. While the number of incarcerated veterans is 
approximately 10-15 percent of the prison population, it is expected 
that these joint Federal efforts will assist many veterans who would 
otherwise be at risk for homelessness upon their release. Moreover, 
after their release, we are providing a needed continuum of services to 
these veterans, chiefly through the provision of transitional housing 
made available through the Homeless Providers Grant and Per Diem 
Program or residential care in VA domiciliary care programs and other 
places as needed. DOL continues to provide funding under its Homeless 
Veterans Reintegration Programs (HVRP) for the Incarcerated Veterans' 
Transition Program (IVTP). VA and DOL are reviewing this program 
carefully and will provide a report on its effectiveness.

HUD-Veterans Affairs Supported Housing (HUD-VASH)
    VA recognizes HUD's long-standing support of the HUD-VASH program. 
This very successful partnership links the provision of VA clinical 
care with permanent housing in order to assist the recovery of 
chronically homeless, mentally ill veterans. HUD and VA hope to 
continue this valuable program, subject to the availability of 
resources.

Summary
    VA continues to make progress on addressing both prevention of, and 
treatment for, the homeless. Each year we provide our annual report to 
the Congress that outlines our activities for homeless veterans. VA is 
collaborating closely with other Federal agencies, state and local 
governments and community-based organizations to ensure that homeless 
veterans have access to a full range of health care, benefits and 
support services. We still have much to do to end chronic homelessness 
among veterans in America, and we are eager to work with you to meet 
that challenge. Developing appropriate links to health care, housing, 
benefits assistance, employment and transportation are all components 
that help bring these veterans out of despair and homelessness. We 
appreciate all of the assistance the Congress gives us to aid this 
noble effort.
    Mr. Chairman that concludes my statement, I am please to respond to 
any questions you or the Committee members may have.
                                 ______
                                 
                PREPARED STATEMENT OF CHERYL BEVERSDORF
   Chief Executive Officer, National Coalition for Homeless Veterans
                             August 2, 2006

Homelessness Among Veterans

      Nearly 200,000 veterans are homeless on any given night; 
more than 400,000 experience homelessness over the course of a year.

      Like their non-veteran counterparts, veterans are at high 
risk of homelessness due to a lack of access to comprehensive health 
care, extremely low or no livable income and an extreme lack of 
affordable housing.

      In addition to these shared factors, a large number of 
homeless veterans experience problems that are directly traceable to 
their experience before or during their military service or to their 
return to civilian society without appropriate transitional supports.

      Preventing and ending homelessness among veterans 
requires general responses of benefit to all homeless persons and 
persons at risk for homelessness and specialized responses targeted to 
homeless veterans.

Permanent Housing for Veterans

      VA and HUD homeless programs are woefully under-funded 
and many homeless veterans are not served by them.

      Missing altogether in the federal housing continuum are 
affordable housing strategies targeted to low-income veterans.

      Congress and HUD should immediately fill the backlog of 
2,000 authorized but not yet allocated vouchers to the HUD-Veterans 
Affairs Supported Housing (HUD-VASH) program, and ultimately increase 
to at least 20,000 the number of HUD-VASH vouchers.

      Congress should enact the Homes for Heroes Act (S. 3475/
H.R. 5561), legislation to develop and expand permanent housing 
opportunities for very low-income veterans.

Introduction
    The National Coalition for Homeless Veterans appreciates the 
opportunity to testify before the Senate Banking, Housing, and Urban 
Affairs Subcommittee on Housing and Transportation at its hearing on 
meeting the housing needs of veterans.
    The National Coalition for Homeless Veterans (NCHV), established in 
1990, is a nonprofit organization with the mission of ending 
homelessness among veterans by shaping public policy, promoting 
collaboration, and building the capacity of service providers. NCHV's 
over 250 member organizations in the states and territories provide 
housing and supportive services to homeless veterans and their 
families, such as street outreach, drop-in centers, emergency shelter, 
transitional housing, permanent housing, recuperative care, hospice 
care, food and clothing, primary health care, addiction and mental 
health services, employment supports, educational assistance, legal aid 
and veterans' and public benefit advocacy.
    The VA estimates that nearly 200,000 veterans are homeless on any 
given night; more than 400,000 experience homelessness over the course 
of a year. Conservatively, one of every three homeless adult males 
sleeping in a doorway, alley, box, car, barn or other location not fit 
for human habitation in our urban, suburban, and rural communities has 
served our nation in the Armed Forces. Homeless veterans are mostly 
males (2 percent are females). 54 percent are people of color. The vast 
majority are single, although service providers are reporting an 
increased number of veterans with children seeking their assistance. 45 
percent have a mental illness. 50 percent have an addiction.
    America's homeless veterans have served in World War II, Korea, the 
Cold War, Vietnam, Grenada, Panama, Lebanon, anti-drug cultivation 
efforts in South America, Afghanistan, and Iraq. 47 percent of homeless 
veterans served during the Vietnam Era. More than 67 percent served our 
nation for at least three years.
    Male veterans are 1.3 times as likely to become homeless as their 
non-veteran counterparts, and female veterans are 3.6 times as likely 
to become homeless as their non-veteran counterparts. A random survey 
of homeless veteran service providers conducted in November 2005 by 
NCHV suggests the homeless veteran population is changing in profile. 
Results of the survey identify three veteran subpopulations that may 
present significant increases in demand for services in the immediate 
future: aging Vietnam veterans, women veterans, and combat veterans of 
America's current operations in Iraq and Afghanistan.
    Like their non-veteran counterparts, veterans become homeless when 
their incomes are too low to obtain affordable housing in their 
community or when there is an insufficient stock of affordable housing 
available where they live. In some cases, their incomes may have 
diminished because of a disabling condition or injury--including 
service-connected disabilities--preventing them from holding a job. 
They may be ineligible for or have barriers to receiving public or 
veteran income assistance, or be unable to secure a job that pays a 
living wage because they lack appropriate job skills transferable to 
the civilian market. They may also have had issues before entering the 
military, including poverty, lack of educational opportunities, an 
unstable family background or a history of social problems. In addition 
to these shared factors, some veterans at risk of homelessness live 
with post traumatic stress disorders and addictions acquired during or 
exacerbated by their military service. These conditions can then 
interrupt their ability to keep a job, establish savings, and in some 
cases, maintain family harmony and remain in the family's housing. 
Veterans' social and professional networks may have been fractured due 
to extensive mobility while in service or lengthy periods away from 
their hometowns and their civilian jobs, leading to difficulty 
returning to work or in sharing the housing of others. These problems 
are directly traceable to their experience in military service or to 
their return to civilian society without appropriate transitional 
supports.
    Ending homelessness among veterans requires public commitment and 
action to ensure their access to permanent housing, livable incomes, 
and health security. This must be accomplished both through general 
responses of benefit to all homeless persons and persons at-risk of 
homelessness and through specialized responses targeted to homeless 
veterans.
    There is no more obvious a response to preventing homelessness 
among veterans than to ensure low-income veterans' access to permanent 
affordable housing so that they are never without a safe place to live 
in the first place.

Permanent Housing for Veterans
    Over 60 years ago, when Congress passed the GI Bill, it provided an 
assurance of homeownership opportunities for veterans through the VA 
Home Loan Guaranty Program. However, Congress made no such comparable 
assurance to affordable rental housing opportunities for our nation's 
low-income veterans, and still has yet to do so.
    The VA Home Loan Guaranty Program is the principal federal 
veterans' housing program. It helps veterans finance the purchase of 
homes with favorable loan terms and at a rate of interest competitive 
with the rate charged on other types of mortgage loans. The Home Loan 
Program--effective as it is--does not meet and was not designed to meet 
the housing assistance needs of all veterans, especially veterans 
without resources to purchase a home such as veterans experiencing 
homelessness.
    At the other end of the federal housing continuum, VA and HUD 
homeless programs such as VA Homeless Provider Grant and Per Diem, HUD 
McKinney-Vento Homeless Assistance, and HUD-Veterans Affairs Supportive 
Housing (HUD-VASH) play vital roles in establishing a housing safety 
net for veterans whose living arrangements have tumbled to the depths. 
Each of these programs is woefully under-resourced and many homeless 
veterans are not served by them. Funding for these programs should be 
increased.
    Missing altogether in the federal housing continuum are affordable 
housing strategies targeted to low-income veterans.
    Congress has not yet granted the U.S. Department of Housing and 
Urban Development--or any federal department--the statutory authority 
to establish permanent affordable housing programs targeted to low-
income veterans. Accordingly, there is no national rental housing 
assistance program targeted to low-income veterans. Veterans are no 
longer a federal priority population for federally-subsidized housing 
assistance. (They once were.) Veterans of working age and without 
disabilities are not well-served through existing rental housing 
assistance programs due to their program designs.
    In those areas where it has discretion, HUD has underperformed when 
it comes to veterans. Of greatest consequence, HUD has discontinued its 
requests for or contribution of Housing Choice Vouchers to the HUD-VASH 
program, the only federal affordable housing assistance program 
targeted to any veteran population, in this case homeless veterans with 
disabilities.
    With all of these gaps in housing support for both low-income 
veterans and homeless veterans, it is apparent why many veterans are 
experiencing an affordable housing or homelessness crisis. It is 
imperative that Congress take immediate action to remedy the deficit in 
preventive and response strategies. Recommended steps include 
increasing the number of Housing Choice Vouchers allocated to the HUD-
VASH program and passing the Homes for Heroes Act.
    The Homeless Veterans Comprehensive Assistance Act of 2001 (P.L. 
107-95) codified the HUD-Veterans Affairs Supported Housing (VASH) 
program (at 42 U.S.C. 1437f (o)(19), which heretofore had existed via a 
Memorandum of Agreement between HUD and VA. The HUD-VASH program 
provides permanent housing subsidies and case management services to 
homeless veterans with mental and addictive disorders. Under the 
program, VA screens homeless veterans for program eligibility and 
provides case management services to enrollees. HUD allocates rental 
subsidies from its Housing Choice Voucher program to the VA, which then 
distributes them to the enrollees. Rigorous evaluation of the program 
indicates it significantly reduces days of homelessness for veterans 
with mental and addictive disorders.
    Under the Homeless Veterans Comprehensive Assistance Act of 2001, 
Congress authorized HUD to allocate 500 additional HUD-VASH vouchers in 
each of FY 2003 through FY 2006. By 2006, this would have amounted to 
2,000 additional vouchers targeted to chronically homeless veterans. 
Regrettably, HUD did not request funding for, and Congress did not 
appropriate funds for, these additional HUD-VASH vouchers in any of its 
budget submissions for those fiscal years. Nor did it request funding 
for the vouchers in its FY 2007 budget.
    Accordingly, we call Congress to immediately fund the entire 
backlog of 2,000 HUD-VASH vouchers. Ultimately, we recommend Congress 
authorize and appropriate funds for a dramatic increase in HUD-VASH 
program to 20,000 vouchers, which while a significant increase is still 
only a mere five percent of the number of veterans who experience 
homelessness annually. When growing the program, Congress should add 
budget authority explicitly for these vouchers so that they truly add 
affordable housing capacity rather than merely displace other needy 
persons with homeless veterans.
    Beyond HUD-VASH, we call on Congress to take bold steps and 
establish new affordable housing initiatives targeted to low-income 
veterans as well as to increase such veterans' access to existing 
housing programs. The establishment of low-income veteran-specific 
permanent affordable housing initiatives is entirely consistent with 
the long history of our nation to establish programs and benefits 
unique to veterans in recognition of their service to the nation.
    We are pleased to support the Homes for Heroes Act (S. 3475/H.R. 
5561), legislation with the purpose of developing and expanding 
permanent housing opportunities for very low-income veterans. The Homes 
for Heroes Act would establish new programs pertaining to veterans 
within the Department of Housing and Urban Development. All federal 
departments--not solely the Department of Veterans Affairs--bear 
responsibility for supporting our nation's veterans. The Homes for 
Heroes Act would give HUD the tools to do so.
    The Homes for Heroes Act consists of seven substantive sections. 
Section 2 establishes a position of Special Assistant for Veterans 
Affairs within HUD. Section 3 authorizes the HUD Secretary to establish 
a supportive housing program for very low-income veteran families. HUD 
would provide housing assistance to such veteran families via planning 
grants, capital advances, project rental assistance, and technical 
assistance to nonprofit organizations and consumer cooperatives 
proposing to develop such housing. VA would provide funding for 
supportive services to residents. Section 4 authorizes an increase in 
budget authority under the project rental assistance component of the 
Housing Choice Voucher program to finance 20,000 rental assistance 
vouchers for homeless veterans. Section 5 requires states and 
localities to include veterans as a special needs population in their 
public housing agency plans and their comprehensive housing 
affordability strategies. Section 6 exempts from calculation of a 
family's rental payment for federally assisted housing the amount of 
income the family receives from VA compensation and benefits. Section 7 
authorizes the HUD Secretary to establish a technical assistance 
program to assist veteran service providers on federally assisted 
housing matters. Section 8 requires HUD to issue an annual report on 
its programs and activities pertaining to veterans.
    Each of these provisions responds to either: an obvious deficit in 
affordable housing stock or access to such stock for low-income or 
homeless veterans; a practical barrier to veterans' access to 
affordable rental housing intended to serve all Americans; or a missed 
leadership opportunity by HUD. We urge Congress to pass this path-
breaking legislation.
Conclusion
    Every one of our nation's military heroes deserves the opportunity 
for a safe, affordable, and permanent place to call home. The National 
Coalition for Homeless Veterans looks forward to continuing to work 
with Congress, the Administration, and other stakeholders to ensure 
that our nation does everything necessary to make this goal a reality 
for each veteran.
                                 ______
                                 
               PREPARED STATEMENT OF BARBARA BANASZYNSKI
         Director of Program Development, Volunteers of America
                             August 2, 2006

    Chairman Allard, Ranking Member Reed, and Members of the 
Subcommittee--thank you for inviting me to testify this afternoon. My 
name is Barbara Banaszynski, and I serve as the Director for Program 
Development for Volunteers of America. I am the daughter of a World War 
II veteran, now deceased--and the mother of a son serving in the 3rd 
Infantry Division, currently stationed at Fort Stewart, Georgia. As a 
child, my family benefited greatly from Veterans Administration (VA) 
assistance--my father completed his college education thanks to the GI 
Bill and purchased our family home with VA benefits.
    Since January, 2006, I have worked with the national office of 
Volunteers of America. During the previous thirteen years, I worked at 
the local office of Volunteers of America that serves Kentucky, 
Tennessee, and West Virginia. This portion of Appalachia is home to 
many veterans in need. Let me describe these veterans to you.
    Almost all the veterans we serve have honorable discharges, but 
after extended periods of homelessness or living in sub-standard 
housing they have lost their proof of discharge status. Most have not 
been receiving medical treatment from the VA--nor are they receiving VA 
benefits to which they are often entitled. Veterans from more urban 
areas typically experience relatively long periods of homelessness, 
while those from rural areas have more often been living in sub-
standard housing or in makeshift outdoor encampments.
    Our veterans programs provide the housing and supportive services 
necessary to prevent and end homelessness. To ensure a strong rapport 
with residents, we hire mostly veterans as program staff. We provide a 
range of supportive services, including case management, job training 
and job referrals, education, legal assistance, transportation, mental 
health and substance abuse treatment, and HIV/AIDS screening.
    However, our veterans programs can only provide transitional 
housing--due to program and funding limitations. I am pleased to be 
here today, to offer some thoughts on how government and nonprofit 
agencies can partner to provide permanent housing opportunities for our 
nation's veterans.

Introduction to Volunteers of America
    Volunteers of America is a national, nonprofit, faith-based 
organization dedicated to helping those in need rebuild their lives and 
reach their full potential. Through thousands of human service 
programs, including housing and healthcare, Volunteers of America helps 
nearly 2 million people in over 400 communities. Since 1896, our 
ministry of service has supported and empowered America's most 
vulnerable groups, including at-risk youth, the frail elderly, men and 
women returning from prison, homeless individuals and families, people 
with disabilities, and those recovering from addictions. Our work 
touches the mind, body, heart--and ultimately the spirit--of those we 
serve, integrating our deep compassion with highly effective programs 
and services.

Volunteers of America Housing and Services for Veterans
    Around the country, Volunteers of America is a leader in providing 
housing and supportive services for homeless and other low income 
veterans. Our activities focus on both preventing and ending 
homelessness among veterans. We believe that government and nonprofit 
agencies have a special obligation to assist veterans who are in need--
based on the service that they have provided to our country.
    We wish to thank the Veterans' Administration, and Secretary Jim 
Nicholson, for their leadership in helping to end homelessness among 
veterans. Secretary Nicholson is a former Board Chair for the 
Volunteers of America--Colorado Branch, and a long-time supporter of 
our organization. We are particularly appreciative of the VA's focus on 
partnerships with Volunteers of America and other nonprofits--we 
believe that these partnerships are a necessary component of any effort 
to meet this country's affordable housing needs.
    To meet these needs, we work in tandem with several federal 
agencies. Through the Department of Labor's Incarcerated Veterans 
Transition Program, Volunteers of America offices in Louisville, 
Kentucky, and Los Angeles, California prevent homelessness by meeting 
veterans right at the prison gate--and helping them find housing, 
obtain health care and jobs, link up with Veterans' Administration (VA) 
benefits and other community resources, and obtain transportation.
    We also reach homeless veterans through street outreach programs, 
including our VA funded Florida Veterans Mobile Service Center, which 
travels the state seeking out homeless veterans living in rural areas. 
When the Center finds a homeless veteran, he or she is immediately 
provided with food, clothing, a primary care medical examination, a 
determination of eligibility for VA and other government benefits, and 
an assessment of housing needs. Often, veterans are referred directly 
to Volunteers of America housing programs in Florida. In addition, 
Volunteers of America serves homeless veterans as the largest grantee 
of the Department of Labor's Homeless Veteran Reintegration Program 
(HVRP). We operate 11 such programs, in cities around the country.
    Volunteers of America also provides direct housing assistance to 
veterans. Through the VA's Grant and Per Diem Transitional Housing 
Program, we operate 27 transitional housing programs in areas ranging 
from Key West, Florida to Sheridan, Wyoming. Also, many of our 
Department of Housing and Urban Development (HUD) funded transitional 
and permanent housing programs for homeless persons serve a significant 
number of veterans. And finally, Volunteers of America operates 8,133 
units of HUD subsidized Section 202 Housing for the Elderly, in 113 
properties--along with 900 units of Section 811 Housing for Persons 
with Disabilities, in 62 properties. A number of these units provide 
quality permanent housing opportunities for elderly or veterans.

HUD's Role in Serving Veterans
    The Subcommittee's invitation to testify this afternoon requested 
that I ``review HUD's programs designed to assist our nation's 
veterans.'' So as not to duplicate HUD's own testimony, I will do this 
only briefly.
    I will then conclude my remarks with three recommendations that 
this Subcommittee and the full Congress can and should implement, to 
increase HUD's ability to meet the housing needs of veterans. According 
to the U.S. Census bureau, one and a half million veterans have incomes 
that fall below the federal poverty level, including 634,000 living 
below 50 percent of the federal poverty level. And the VA estimates 
that about 200,000 veterans are homeless on any given night, with more 
than 400,000 veterans experiencing homelessness over the course of a 
year. HUD should be authorized to take additional steps to help address 
the housing problems faced by these veterans.
    HUD has one program that is directly targeted to veterans--the HUD-
Veterans Affairs Supportive Housing (HUD-VASH) program. Beginning in 
1992, HUD-VASH has provided a changing population of approximately 
2,000 hard to house homeless mentally ill veterans with a combination 
of HUD Section 8 vouchers and VA community based clinical case 
management. The program is intended to provide veterans with long-term 
assistance. Consequently, due to expected low turnover, only 4,600 
veterans have been able to participate in HUD-VASH.
    According to a VA evaluation, the HUD-VASH program works extremely 
well. After both 18 month and 3 year intervals, 95 percent of veterans 
remain stably housed. In addition, 40 percent of veterans improve their 
employment status, 60 percent improve their financial status, and 65 
percent improve their independent living skills. This is a promising 
program that should be expanded to meet additional need.
    Although there are no other HUD programs specifically for veterans, 
other federal housing programs do serve veterans. We know, for example, 
that veterans receive ``regular'' Section 8 vouchers due to old age, 
disability, or membership in a low income family. HUD's McKinney-Vento 
homeless assistance programs also serve many veterans. In addition, 
veterans live in HUD funded elderly and disabled housing, along with 
housing for persons with AIDS funded through the Housing Opportunities 
for Persons With AIDS (HOPWA) program. And veterans live in housing 
developed with funds that HUD provides to state and local governments, 
such as HOME or Community Development Block Grants (CDBG).
    However, HUD does not know the extent to which veterans are 
represented in these programs--because the Department does not collect 
information on the military service status of tenants assisted through 
HUD programs. We recommend that Congress instruct HUD to make military 
service history a standard data element across its housing assistance 
programs. And given the continuing need for housing that is affordable 
to low income veterans, we believe that Congress should authorize HUD 
to take additional steps to help Volunteers of America and other 
nonprofits meet the demand.

Recommendations: Congress Should Expand HUD's Role in Helping 
        Nonprofits Meet the Affordable Housing Needs of Low Income 
        Veterans
    With increased authority from Congress, we believe that HUD could 
take significant new steps to help Volunteers of America and other 
nonprofits meet the housing needs of low income veterans. Our country 
has a moral duty to do no less.

1. Congress Should Pass S. 3475--The Homes for Heroes Act of 2006
    The Homes for Heroes Act contains several important provisions that 
would help government and nonprofit agencies better collaborate to 
increase the supply of affordable housing for veterans. First, the bill 
would create a new housing production program, modeled on Section 202 
elderly housing. Under this program, nonprofits could receive funds for 
acquisition, construction, reconstruction, or rehabilitation of 
property to be used as housing for low income veterans. Project based 
rental assistance would also be available, so that tenants would pay no 
more than 30 percent of income as rent--the standard percentage for HUD 
subsidized housing. VA would also partner with nonprofit housing 
operators, by providing funding for supportive services such as case 
management, transportation, and job training.
    Next, the bill would increase the authority for HUD-VASH Section 8 
vouchers from 2,000 to 20,000. Vouchers could be used for two 
purposes--to provide housing assistance to additional severely disabled 
homeless veterans who need housing and case management assistance 
identical to that provided under the current HUD-VASH program, and to 
aid homeless veterans who need stable permanent housing with much less 
significant supportive services--some of who are leaving VA funded 
transitional housing with no place to go.
    The Homes for Heroes Act also makes some important technical 
changes to HUD programs. It mandates that Public Housing Agencies 
(PHA's) consider the needs of veterans in creating their local housing 
plans, and requires local officials to consider the housing needs of 
veterans in preparing their Consolidated Plan.
    As a major provider of HUD 202 housing, we believe that the program 
is working well in helping elderly Americans, and expect that a similar 
program to assist veterans would work equally well. In some cases, it 
is likely that Volunteers of America or other nonprofits would develop 
permanent housing specifically for veterans. This would be appropriate 
where there is significant demand for such housing, and many of the 
veterans to be served have similar social service needs. However, we 
would more often use this funding to set aside a certain number of 
housing units for veterans, within a larger multifamily housing 
development. Construction or rehabilitation of a building to provide 
affordable housing requires nonprofit housing developers to pull 
together multiple funding streams. This program would be a welcome 
addition.
    Volunteers of America views the multifamily housing program as a 
tool to help prevent homelessness among veterans, while the increased 
authority for HUD-VASH vouchers would provide additional units of 
permanent supportive housing to end homelessness among veterans--
without imposing additional permanent housing costs on HUD's McKinney-
Vento homeless assistance grant programs.

2. Congress Should Pass an Affordable Housing Fund as Part of S. 190--
        The Federal Housing Enterprise Regulatory Reform Act
    Housing legislation targeted to veterans is important, but the 
housing needs of low income veterans can also be met through 
legislation that provides Volunteers of America and other nonprofits 
with the tools we need to provide quality affordable housing for all 
Americans who need it.
    Recognizing the need to increase our nation's housing supply, the 
House-passed bill to re-regulate Fannie Mae and Freddie Mac included 
language creating an affordable housing fund, to be funded with a 
percentage of profits from both Fannie and Freddie. We estimate that 
this bill could provide up to one billion dollars a year for 
construction and rehabilitation of affordable housing. And given our 
difficult fiscal times, it is important to note that these funds would 
not come from the federal treasury.
    The full Senate Banking Committee has already passed a version of 
this bill--S. 190--The Federal Housing Enterprise Regulatory Reform 
Act. Unfortunately, the legislation does not yet contain an affordable 
housing fund. We understand that there are outstanding regulatory 
issues to be resolved through negotiation before the bill can reach the 
Senate floor. We call on Senators to resolve those regulatory issues--
and as part of any agreement, we ask that a manager's amendment be 
submitted on the Senate floor that would include an affordable housing 
fund. These new resources are needed as quickly as possible.

3. Congress Should Preserve Funding for New Housing to Help End 
        Homelessness
    This Subcommittee is currently considering S. 1801, legislation 
crafted by Chairman Allard and Ranking Member Reed that would 
consolidate and reform HUD's McKinney-Vento homeless assistance grant 
programs. We thank these Senators, and other members of the 
Subcommittee, for your interest in homelessness issues.
    In a March 30, 2006 hearing on McKinney-Vento reauthorization, 
Volunteers of America National President Charles W. Gould provided this 
Subcommittee with our recommendations for program changes. I would like 
to highlight one of those recommendations today.
    McKinney-Vento funds permanent housing through two programs--the 
Shelter Plus Care program (SPC)--which provides funds to state and 
local governments and the Supportive Housing Program (SHP)--which 
provides funds to nonprofits. SHP also provides significant funds for 
transitional housing and supportive services. In recent years, HUD has 
devoted an increasing proportion of SPC and SHP funds to permanent 
housing--over 50 percent in the most recent grant awards. Many of these 
permanent supportive housing units are used by Volunteers of America 
and other nonprofits to help end homelessness for veterans.
    When HUD funds permanent housing through any program, all housing 
subsidies must be renewed on an annual basis. In the case of McKinney-
Vento, recent projections show that within several years, renewal of 
existing permanent housing subsidies will take up such a significant 
proportion of McKinney-Vento funds that local communities will have 
little to no money available to undertake new homeless services 
programs. This will make it considerably more difficult for communities 
to meet the goals being specified in local Ten Year Plans to End 
Homelessness--plans that are being required by HUD.
    To solve this problem, we ask that a dedicated account be set up, 
and funded annually, to cover the cost of all McKinney-Vento permanent 
housing renewals. This will ensure that new funding continues to be 
available as we work to end homelessness for veterans and all other 
Americans.
    Thank you again for inviting me to testify today. I look forward to 
answering your questions.
                                 ______
                                 
    RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED FROM MARK 
                            JOHNSTON

Q.1 Since one and a half million veterans have incomes at or 
below the poverty level, and almost 650,000 have incomes 50 
percent below the area median income, hundreds of thousands of 
veterans will have difficulties accessing affordable housing. 
Has HUD collected data on the housing needs of low-income vets? 
For example, do we know how many veterans are receiving a HUD 
housing subsidy, how many are on waiting lists for such 
subsidies, and how many live in substandard housing?

A.1. Of the approximately 24.3 million veterans who are living 
in America today, it is estimated that about 5.3% have incomes 
at or below the poverty level. The Department does not 
currently collect specific data on the housing needs of low-
income veterans as an independent category; nor do we track the 
number of veterans that are in HUD-subsidized housing. Local 
public housing agencies have the authority to establish local 
preferences to address local needs and can choose to establish 
a preference for veterans.
    While it is not known how many public housing agencies have 
established a veterans' preference for a housing subsidy, 
approximately 1,300 veterans are currently using rental 
subsidies through the HUD Veterans Affairs Supportive Housing 
(HUDV ASH) initiative nationwide. Additionally, approximately 
8,832 veterans are currently being served in permanent housing 
projects funded under HUD's homeless assistance programs.
    In addition, HUD's Office of Housing has two Asset Control 
Area (ACA) Agreements in effect whereby the program 
participants have committed to giving Iraqi War veterans 
preference for purchasing fully rehabilitated properties at a 
discount sales price (i.e., sales price cannot exceed 115% of 
the program participant's net development cost). The program 
participants are New York City's Department of Housing 
Preservation and Development (HPD) and Camden City, NJ. These 
ACA Agreements were entered into on January 11, 2006, and 
November 22, 2005, respectively.
    Although not a new benefit, Mortgagee Letter 2004-24 
reminds lenders that veterans are eligible for reduced 
downpayments under FHA programs, when the veteran has less than 
a full VA eligibility. The FHA formula for cash requirement is 
adjusted, for high closing cost states vis-a-vis low closing 
costs states. Also, cash requirements are based on sales price, 
ranging from 1.25% to 2.25%.
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