I 
118TH CONGRESS 
2D SESSION 
H. R. 8647 
To amend title 38, United States Code, to authorize the Secretary of Veterans 
Affairs to take certain actions to prevent or resolve a default of a 
housing loan guaranteed by the Secretary, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 5, 2024 
Mr. VAN ORDEN (for himself and Mr. ALFORD) introduced the following bill; 
which was referred to the Committee on Veterans’ Affairs 
A BILL 
To amend title 38, United States Code, to authorize the 
Secretary of Veterans Affairs to take certain actions 
to prevent or resolve a default of a housing loan guaran-
teed by the Secretary, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘VA Home Loan Pro-
gram Reform Act’’. 
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SEC. 2. AUTHORITY OF THE SECRETARY OF VETERANS AF-
FAIRS TO TAKE CERTAIN ACTIONS IN THE 
CASE OF A DEFAULT ON A HOME LOAN GUAR-
ANTEED BY THE SECRETARY. 
Section 3732 of title 38, United States Code, is 
amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by striking ‘‘obliga-
tion’’ each place it appears and inserting 
‘‘loan’’; 
(B) in paragraph (2)— 
(i) by amending subparagraph (A) to 
read as follows: 
‘‘(A) The Secretary may, under terms and conditions 
as determined by the Secretary— 
‘‘(i) pay the holder of a loan guaranteed under 
this chapter an amount necessary to avoid the fore-
closure of such loan; 
‘‘(ii) require the holder of the loan and the vet-
eran obligated on the loan to execute all documents 
necessary to ensure the Secretary obtains a secured 
interest in the property covered by the loan; and 
‘‘(iii) require the holder of the loan to take any 
actions necessary to carry out this paragraph, in-
cluding preparing, executing, transmitting, receiving, 
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and recording documents, and requiring the holder 
of the loan to place the loan in forbearance.’’; 
(ii) in subparagraph (B), by striking 
‘‘obligation’’ each place it appears and in-
serting ‘‘housing loan’’; and 
(iii) by adding at the end the fol-
lowing new subparagraphs: 
‘‘(C)(i) Any decision by the Secretary under this 
paragraph is final and is not subject to judicial review. 
‘‘(ii) For purposes of section 511 of this title, any 
decision under this paragraph shall not be treated as a 
decision under a law that affects the provision of benefits. 
‘‘(D)(i) The Secretary may establish standards for 
processing payments under this paragraph based on a cer-
tification by a holder of a loan guaranteed under this 
chapter that the holder has complied with all applicable 
requirements established by the Secretary. 
‘‘(ii) The Secretary shall carry out, on a random-sam-
pling basis, post-payment audits to ensure compliance 
with all requirements described in clause (i).’’; and 
(C) in paragraph (5), by striking ‘‘obliga-
tion’’ and inserting ‘‘loan’’; 
(2) in subsection (c)(10)(B)(i), by striking 
‘‘forebearance’’ each place it appears and inserting 
‘‘forbearance’’; and 
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(3) by adding at the end the following new sub-
section: 
‘‘(d) The Secretary may prescribe loss mitigation pro-
cedures, including a mandatory sequence in which the 
holder of a loan guaranteed under this chapter shall offer 
loss mitigation options to veterans, to help prevent the 
foreclosure of any such loan.’’. 
SEC. 3. PARTIAL CLAIM PROGRAM OF THE DEPARTMENT 
OF VETERANS AFFAIRS. 
(a) ESTABLISHMENT.—The Secretary of Veterans 
Affairs shall carry out a program, to be known as the 
‘‘Partial Claim Program’’, under which the Secretary may 
make a partial claim, described in subsection (b), with re-
spect to a loan guaranteed under chapter 37 of title 38, 
United States Code, if the Secretary determines that such 
loan is in default or at imminent risk of default. 
(b) PARTIAL CLAIM DESCRIBED.—A patrial claim 
described in this subsection is the purchase by the Sec-
retary of a portion of indebtedness under the guaranteed 
loan, under which— 
(1) the borrower of the guaranteed loan enters 
into an agreement under subsection (c); 
(2) the Secretary pays the holder of the guaran-
teed loan the amount of indebtedness the Secretary 
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determines necessary to help prevent or resolve a de-
fault; and 
(3) the Secretary receives a secured interest in 
the property, subordinate to the first lien guaranteed 
loan, serving as collateral for the guaranteed loan. 
(c) AGREEMENT BETWEEN BORROWER AND SEC-
RETARY.—An agreement under this subsection is an 
agreement by the borrower of the guaranteed loan to repay 
the Secretary the amount determined under subsection 
(b)(2) at the end of the period of such guaranteed loan, 
subject to the following annual interest: 
(1) If the borrower agrees to make monthly 
payments beginning not later than one year after the 
date on which the Secretary makes the payment 
under subsection (b)(2), 0 percent. 
(2) If the borrower does not agree to a repay-
ment plan under paragraph (1), or fails to comply 
with such a repayment plan, 0.5 percent. 
(d) ADMINISTRATION OF PARTIAL CLAIM.— 
(1) AMOUNT OF CLAIM.—The amount of a par-
tial claim under this section with respect to a loan 
guaranteed under such chapter may not exceed 20 
percent of the unpaid principal balance of the guar-
anteed loan on the date on which the partial claim 
is made. 
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(2) APPLICATION
OF
CLAIM.—A holder of a 
loan guaranteed under such chapter who receives a 
partial claim under this section with respect to such 
loan shall apply the payment first to arrearages, if 
any, on the guaranteed loan, which may include any 
additional costs (such as taxes, insurance premiums, 
or homeowner’s dues) the Secretary determines nec-
essary to prevent or resolve a default. 
(e) REQUIREMENTS OF LOAN HOLDER.— 
(1) AGENT
OF
SECRETARY.—The Secretary 
may require the holder of a loan guaranteed under 
such chapter who receives a partial claim under this 
section to service the partial claim as an agent of 
the Secretary. 
(2) ESTABLISHMENT
OF
CLAIM.—The Sec-
retary may require the holder of a loan guaranteed 
under such chapter who receives a partial claim 
under this section to take any actions necessary to 
establish the partial claim, including preparing, exe-
cuting, transmitting, receiving, and recording loan 
documents. 
(3) COMPENSATION
OF
HOLDER.—The Sec-
retary shall compensate the holder of a loan guaran-
teed under such chapter who receives a partial claim 
under this section appropriately, as determined by 
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the Secretary, for the services required of such hold-
er under this subsection. 
(4) EXERCISE
OF
POWERS.—The Secretary 
may exercise the authority of the Secretary under 
this subsection without regard to any other provision 
of law not enacted expressly in limitation of this sec-
tion that would otherwise govern the expenditure of 
public funds. 
(f) DEFAULT AND FORECLOSURE.— 
(1) DEFAULT.— 
(A) IN
GENERAL.—Notwithstanding sec-
tion 3703(e) of title 38, United States Code, an 
individual who defaults under a partial claim 
made under this section shall be liable to the 
Secretary for any loss suffered by the Secretary 
resulting from such default, and such loss may 
be recovered in the same manner as any other 
debt due the United States. 
(B) REDUCTION
OF
ENTITLEMENT.—In 
the event of default by an individual under a 
partial claim made under this section, the Sec-
retary may reduce the aggregate amount of 
guaranty or insurance housing loan entitlement 
available to the individual under such chapter. 
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(2) FORECLOSURE.—Notwithstanding section 
2410(c) of title 28, United States Code, an action to 
foreclose a lien held by the United States arising 
under a partial claim made under this section shall 
follow foreclosure procedures in accordance with 
State or local law where the property involved is lo-
cated. 
(g) DECISIONS BY THE SECRETARY.— 
(1) SOLE
DISCRETION.—Any partial claim 
under this section shall be made in the sole discre-
tion of the Secretary and on terms and conditions 
acceptable to the Secretary that are consistent with 
this section. 
(2) FINAL AND CONCLUSIVE.—Any decision by 
the Secretary under this section is final and conclu-
sive and is not subject to judicial review. 
(3) AFFECT ON PROVISION OF BENEFITS.—For 
purposes of section 511 of title 38, United States 
Code, any decision under this section shall not be 
treated as a decision under a law that affects the 
provision of benefits. 
(h) COMPLIANCE.— 
(1) PROCESSING
PAYMENTS.—The Secretary 
may establish standards for processing payments 
under this section based on a certification by a hold-
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er of a loan guaranteed under such chapter that the 
holder has complied with all applicable requirements 
established by the Secretary. 
(2) AUDITS.—The Secretary shall carry out, on 
a random-sampling basis, post-payment audits to en-
sure compliance with all requirements described in 
paragraph (1). 
(i) 
GUIDANCE
WITH
RESPECT
TO
CERTAIN 
LOANS.— 
(1) IN GENERAL.—With respect to a loan de-
scribed in paragraph (2), the Secretary may— 
(A) before prescribing regulations, issue 
administrative guidance regarding the making 
of a partial claim relating to such loan; and 
(B) establish, through such guidance, addi-
tional requirements applicable to such a partial 
claim. 
(2) LOAN DESCRIBED.—A loan described in this 
paragraph is a loan that the Secretary determines 
was in default on the date of the enactment of this 
Act. 
(j) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to limit the authority of the Sec-
retary under subsections (a) and (d) of section 3732 of 
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title 38, United States Code, as amended by section 2 of 
this Act. 
(k) TERMINATION.—The Secretary may not make a 
partial claim under this section after September 30, 2026. 
SEC. 4. STRATEGY OF THE SECRETARY OF VETERANS AF-
FAIRS REGARDING HOME LOANS IN LIGHT OF 
CERTAIN LITIGATION. 
Not later than 90 days after the date of the enact-
ment of this Act, the Secretary of Veterans Affairs shall 
submit to the Committees on Veterans’ Affairs of the Sen-
ate and House of Representatives a report on the strategy 
of the Secretary to ensure that a veteran who seeks to 
purchase a home with a loan guaranteed under chapter 
37 of title 38, United States Code, is not at a disadvan-
tage, arising from the decision in Burnett v. The National 
Association of Realtors (4:19–cv–00332–SRB (W.D. Mo. 
Dec. 16, 2022)), when attempting to secure representation 
by a real estate agent or broker. Such strategy may in-
clude amendments to section 36.4313 of title 38, Code of 
Federal Regulations. 
Æ 
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