105TH CONGRESS
2D SESSION
H. R. 3039
AN ACT
To amend title 38, United States Code, to authorize the
Secretary of Veterans Affairs to guarantee loans to pro-
vide multifamily transitional housing for homeless veter-
ans, 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 ‘‘Veterans Transitional
Housing Opportunities Act of 1998’’.
SEC. 2. LOAN GUARANTEE FOR MULTIFAMILY TRANSI-
TIONAL HOUSING FOR HOMELESS VETERANS.
(a) IN GENERAL.—Chapter 37 of title 38, United
States Code, is amended by adding at the end the follow-
ing new subchapter:
‘‘SUBCHAPTER 
VI—LOAN 
GUARANTEE 
FOR
MULTIFAMILY 
TRANSITIONAL 
HOUSING
FOR HOMELESS VETERANS
‘‘§ 3771. Definitions
‘‘For purposes of this subchapter—
‘‘(1) the term ‘veteran’ has the meaning given
such term by paragraph (2) of section 101;
‘‘(2) the term ‘homeless veteran’ means a vet-
eran who is a homeless individual; and
‘‘(3) the term ‘homeless individual’ has the
same meaning as such term has within the meaning
of section 103 of the Stewart B. McKinney Home-
less Assistance Act (42 U.S.C. 11302).
‘‘§ 3772. General authority
‘‘(a) The Secretary may guarantee the full or partial
repayment of a loan that meets the requirements of this
subchapter.
‘‘(b)(1) Not more than 15 loans may be guaranteed
under subsection (a), of which not more than 5 such loans
may be guaranteed during the 3-year period beginning on
the date of enactment of the Veterans Transitional Hous-
ing Opportunities Act of 1998.
‘‘(2) A guarantee of a loan under subsection (a) shall
be in an amount that is not less than the amount nec-
essary to sell the loan in a commercial market.
‘‘(3) Not more than an aggregate amount of
$100,000,000 in loans may be guaranteed under sub-
section (a).
‘‘(c) A loan may not be guaranteed under this sub-
chapter unless, prior to closing such loan, the Secretary
has approved such loan.
‘‘(d)(1) The Secretary shall enter into contracts with
a qualified nonprofit organization to obtain advice in car-
rying out this subchapter, including advice on the terms
and conditions necessary for a loan that meets the require-
ments of section 3773.
‘‘(2) For purposes of paragraph (1), a qualified non-
profit organization is a nonprofit organization—
‘‘(A) described in paragraph (3) or (4) of sub-
section (c) of section 501 of the Internal Revenue
Code of 1986 and exempt from tax under subsection
(a) of such section; and
‘‘(B) that has experience in underwriting tran-
sitional housing projects.
‘‘(e) The Secretary may carry out this subchapter in
advance of the issuance of regulations for such purpose.
‘‘(f) The Secretary may guarantee loans under this
subchapter notwithstanding any requirement for prior ap-
propriations for such purpose under any provision of law.
‘‘§ 3773. Requirements
‘‘(a) A loan referred to in section 3772 meets the re-
quirements of this subchapter if—
‘‘(1) the loan is for—
‘‘(A) construction of, rehabilitation of, or
acquisition of land for a multifamily transi-
tional housing project described in subsection
(b), or more than one of such purposes;
‘‘(B) refinancing of an existing loan for
such a project;
‘‘(C) financing acquisition of furniture,
equipment, supplies, or materials for such a
project; or
‘‘(D) in the case of a loan made for pur-
poses of subparagraph (A), supplying such or-
ganization with working capital relative to such
a project;
‘‘(2) the loan is made in connection with fund-
ing or the provision of substantial property or serv-
ices for such project by either a State or local gov-
ernment or a nongovernmental entity, or both;
‘‘(3) the maximum loan amount does not exceed
the lesser of—
‘‘(A) that amount generally approved (uti-
lizing prudent underwriting principles) in the
consideration and approval of projects of simi-
lar nature and risk so as to assure repayment
of the loan obligation; and
‘‘(B) 90 percent of the total cost of the
project;
‘‘(4) the loan is of sound value, taking into ac-
count the creditworthiness of the entity (and the in-
dividual members of the entity) applying for such
loan;
‘‘(5) the loan is secured; and
‘‘(6) the loan is subject to such terms and con-
ditions as the Secretary determines are reasonable,
taking into account other housing projects with simi-
larities in size, location, population, and services pro-
vided.
‘‘(b) For purposes of this subchapter, a multifamily
transitional housing project referred to in subsection
(a)(1) is a project that—
‘‘(1)(A) provides transitional housing to home-
less veterans, which housing may be single room oc-
cupancy (as defined in section 8(n) of the United
States Housing Act of 1937 (42 U.S.C. 1437f(n)));
‘‘(B) provides supportive services and counsel-
ling services (including job counselling) at the
project site with the goal of making such veterans
self-sufficient;
‘‘(C) requires that the veteran seek to obtain
and keep employment;
‘‘(D) charges a reasonable fee for occupying a
unit in such housing;
‘‘(E) maintains strict guidelines regarding so-
briety as a condition of occupying such unit; and
‘‘(F) may include space for neighborhood retail
services or job training programs; and
‘‘(2) may provide transitional housing to veter-
ans who are not homeless and to homeless individ-
uals who are not veterans if—
‘‘(A) at the time of taking occupancy by
any such veteran or homeless individual, the
transitional housing needs of homeless veterans
in the project area have been met;
‘‘(B) the housing needs of any such vet-
eran or homeless individual can be met in a
manner that is compatible with the manner in
which the needs of homeless veterans are met
under paragraph (1); and
‘‘(C) the provisions of subparagraphs (D)
and (E) of paragraph (1) are met.
‘‘(c) In determining whether to guarantee a loan
under this subchapter, the Secretary shall consider—
‘‘(1) the availability of Department of Veterans
Affairs medical services to residents of the multifam-
ily transitional housing project; and
‘‘(2) the extent to which needs of homeless vet-
erans are met in a community, as assessed under
section 107 of Public Law 102–405.
‘‘§ 3774. Default
‘‘(a) The Secretary shall take such steps as may be
necessary to obtain repayment on any loan that is in de-
fault and that is guaranteed under this subchapter.
‘‘(b) Upon default of a loan guaranteed under this
subchapter and terminated pursuant to State law, a lender
may file a claim under the guarantee for an amount not
to exceed the lesser of—
‘‘(1) the maximum guarantee; or
‘‘(2) the difference between—
‘‘(A) the total outstanding obligation on
the loan, including principal, interest, and ex-
penses authorized by the loan documents,
through the date of the public sale (as author-
ized under such documents and State law); and
‘‘(B) the amount realized at such sale.
‘‘§ 3775. Audit
‘‘During each of the first 3 years of operation of a
multifamily transitional housing project with respect to
which a loan is guaranteed under this subchapter, there
shall be an annual, independent audit of such operation.
Such audit shall include a detailed statement of the oper-
ations, activities, and accomplishments of such project
during the year covered by such audit. The party respon-
sible for obtaining such audit (and paying the costs there-
for) shall be determined before the Secretary issues a
guarantee under this subchapter.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 37 of title 38, United States
Code, is amended by adding at the end the following new
items:
‘‘SUBCHAPTER VI—LOAN GUARANTEE FOR MULTIFAMILY
TRANSITIONAL HOUSING FOR HOMELESS VETERANS
‘‘3771. Definitions.
‘‘3772. General authority.
‘‘3773. Requirements.
‘‘3774. Default.
‘‘3775. Audit.’’.
Passed the House of Representatives May 19, 1998.
Attest:
Clerk.