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[Congressional Record Volume 141, Number 78 (Thursday, May 11, 1995)]
[Extensions of Remarks]
[Page E1007]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

              THE MILITARY HOUSING ASSISTANCE ACT OF 1995

                                 ______

                       HON. G.V.(SONNY)MONTGOMERY

                             of mississippi

                    in the house of representatives

                         Thursday, May 11, 1995
  Mr. MONTGOMERY. Mr. Speaker, I am today introducing H.R. 1611, the 
Military Housing Assistance Act of 1995. The purpose of this measure is 
to enable active duty military personnel to purchase homes for 
themselves and their families in areas where the supply of suitable 
military housing is inadequate. As a result, the Department of 
Defense's on-base housing costs could be significantly reduced. This 
joint Department of Veterans' Affairs/Department of Defense [VA/DOD] 
program would be an excellent example of Federal agencies working 
together to enhance the lives of our armed services personnel while 
reducing DOD construction expenditures.
  Under this program, DOD would be authorized to buy down the interest 
rate for certain active duty personnel purchasing off-base housing 
using the VA guaranteed home loan. This buydown would lower the monthly 
mortgage payment during the first 3 years of the loan. Loans covered by 
this proposal would, as is currently the case with VA home loans, be 
made by private lenders. The escrowed funds needed for the buydown 
would be provided to the lender by the VA. DOD would then reimburse the 
VA. These loans would be processed in the same way as any other VA loan 
which includes a buydown except that these loans would be underwritten 
at the second-year rate rather than at the full note rate, thus 
enabling more individuals to qualify for the loans. Additionally, DOD 
would be authorized to indemnify mortgagees against any loss, thereby 
covering the difference between the VA guaranty and any actual loss on 
the sale of the property.
  Eligibility for these loans would be limited to all enlisted members 
and officers in the pay grade 0-3 or below who are first-time users of 
the VA home loan program. Application for participation in this program 
would be made within 12 months of assignment to a housing shortage 
area. The service Secretaries would designate those bases that have a 
housing shortage.
  An important component of this bill would require individuals 
participating in the program to participate in comprehensive prepurchas 
counseling. It has been demonstrated that counseling of this type 
results in borrowers who are better prepared to assume the 
responsibilities of homeownership. Additionally, VA would be authorized 
to assign qualified VA loan guaranty personnel to the bases designated 
as having housing shortages. These VA personnel would provide 
prepurchase counseling and loan servicing assistance and assist GI's 
with the purchase and subsequent sale of their homes.
  After consulting with and obtaining the agreement of the VA, DOD 
would be authorized to transfer its property management jurisdiction to 
the VA. Thirty VA FTEE would be authorized to fulfill these 
responsibilities.
  Under this bill, DOD would be authorized $104 million and $6 million 
would be authorized for the VA. VA estimates these amounts would 
provide for 32,000 loans per year.
  I believe the Military Housing Assistance Act of 1995 would establish 
an excellent program, and I urge my colleagues who would like to 
cosponsor this measure to contact Bo Maske at 225-5031 or Beth Kilker 
at 225-9756.

                          ____________________
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