VA Home Loan Program Reform Act

Bill: 119-hr-1815
Sponsor: full_name: Rep. Van Orden, Derrick [R-WI-3]
Introduced: 2025-03-03
Policy area: Armed Forces and National Security
Subjects: Accounting and auditing

Congressional oversight

Government lending and loan guarantees

Real estate business

Veterans' loans, housing, homeless programs
Latest action: action_date: 2025-07-30
text: Became Public Law No: 119-31.

Summaries:
action_date: 2025-03-03
action_desc: Introduced in House
text: <p><strong>VA Home Loan Program Reform Act</strong></p><p>This bill authorizes the Department of Veterans Affairs (VA) to take certain actions in cases of default on home loans under the VA home loan program and establishes a partial claim program.</p><p>First, the bill authorizes the VA to pay the holder of a loan guaranteed by the VA an amount necessary to avoid the foreclosure of the loan, provided that the holder of the loan and the veteran obligated on the loan execute documents to ensure the VA obtains a secured interest in the property covered by the loan.</p><p>The VA must prescribe loss mitigation procedures to help prevent the foreclosure of such a home loan. The VA may not take specified administrative actions (e.g., consent to the modification of loan terms) until the sequence of mitigation options has been completed.</p><p>Next, the bill establishes a five-year Partial Claim Program under which the VA may make a partial claim (purchase a&nbsp;portion of the indebtedness) on VA loans for primary residences that are in default or at imminent risk of default. Individuals who default on loans for which the VA has made a partial claim under this program must be liable to the VA for any loss resulting from the default.</p><p>Finally, the VA must report to Congress on its strategy to ensure that veterans who purchase homes under the VA home loan program are not at a disadvantage when attempting to secure representation by a real estate agent or broker.</p>

tv_txt: I One Hundred Nineteenth Congress of the United States of America At the First Session Begun and held at the City of Washington on Friday, the third day of January, two thousand and twenty-five H. R. 1815 AN ACT To amend title 38, United States Code, to authorize the Secretary of Veterans Affairs to take certain actions in the case of a default on a home loan guaranteed by the Secretary, and for other purposes.

1. Short title This Act may be cited as the VA Home Loan Program Reform Act . 2. Authority of the Secretary of Veterans Affairs to take certain actions in the case of a default on a home loan guaranteed by the Secretary (a) In general Section 3732 of title 38, United States Code, is amended— (1) in subsection (a)— (A) in paragraph (1), by striking obligation 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 determined by the Secretary— (i) pay the holder of a loan guaranteed under this chapter an amount necessary to avoid the foreclosure of such loan; (ii) require the holder of the loan and the veteran 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, including preparing, executing, transmitting, receiving, 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 inserting housing loan ; and (iii) by adding at the end the following 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 certification 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-sampling basis, post-payment audits to ensure compliance with all requirements described in clause (i). ; and (C) in paragraph (5), by striking obligation and inserting loan ; (2) in subsection (c)— (A) in paragraph (1), in the matter preceding subparagraph (A), by striking subsection— and inserting subsection: ; and (B) in paragraph (10)(B)(i), by striking forebearance each place it appears and inserting forbearance ; and (3) by adding at the end the following new subsection: (d) The Secretary shall prescribe loss mitigation procedures, including a mandatory sequence in which the holder of a loan guaranteed under this chapter shall offer loss mitigation options (including an option to enter into a partial claim agreement under the VA Home Loan Program Reform Act ) to a veteran, to help prevent the foreclosure of such loan. The Secretary may not purchase an entire such loan until the veteran has completed such sequence. . (b) Relationship to other powers of Secretary Section 3720 of such title is amended— (1) in subsection (a), by striking Notwithstanding and inserting Except as provided in subsection (h), notwithstanding ; (2) by redesignating subsections (f) through (h) as subsections (e) through (g), respectively; and (3) by adding at the end the following new subsection (h): (h) The Secretary may not take any action under paragraph (2), (3), (4), or (5) of subsection (a) with respect to a loan guaranteed under this chapter before the completion of the sequence of mitigation options offered to the veteran to whom the loan is made under section 3732(d) of this title. . 3. Partial Claim Program of the Department of Veterans Affairs (a) In general Subchapter III of chapter 37 of title 38, United States Code, is amended by adding at the end the following new section: 3737. Partial Claim Program (a) Establishment The Secretary 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 respect to a loan— (1) guaranteed under this chapter; (2) regarding the primary residence of the borrower; and (3) that the Secretary determines is in default or at imminent risk of default. (b) Partial claim described A partial claim described in this subsection, with respect to a loan described in subsection (a), is the purchase by the Secretary of a portion of indebtedness under the loan, through a transaction under which the Secretary— (1) pays to the holder of the loan the amount of indebtedness, subject to subsection (c), that the Secretary determines necessary to help prevent or resolve a default; and (2) receives a secured interest in the property that serves as collateral for the guaranteed loan, which is subordinate to the first lien guaranteed loan for such property. (c) Administration of partial claim (1) (A) Subject to subparagraph (B), the amount of a partial claim under this section with respect to a loan guaranteed described in subsection (a) may not exceed 25 percent of the unpaid principal balance of the loan on the date on which the partial claim is made. (B) In the case of an individual who failed to make a payment on a loan guaranteed under this chapter during the period beginning on March 1, 2020 and ending on May 1, 2025, the amount of a partial claim under this section may not exceed 30 percent of the unpaid principal balance of the guaranteed loan as of the date that the initial partial claim is made. (2) (A) Subject to subparagraph (B), the Secretary may make only one partial claim per loan. (B) The Secretary may make an additional partial claim on a loan guaranteed under this chapter in the case of an individual who failed to make a payment on such loan during— (i) a major disaster declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5170 ); or (ii) the period of 120 days following such a major disaster. (3) An amount paid to the holder of a loan as a partial claim— (A) shall not count against the amount of a loan that may otherwise be guaranteed under this chapter; and (B) may not be applied to the portion of the loan that is guaranteed under this chapter. (4) A holder of a loan guaranteed under such chapter for which the Secretary makes a partial claim under this section shall apply the amount paid by the Secretary for the partial claim first to arrearages, if any, on the guaranteed loan. Such arrearages may include any additional costs (such as taxes, insurance premiums, or homeowner’s dues) the Secretary determines necessary to prevent or resolve a default. (5) The Secretary may enter into a contract with an appropriate entity for the service of a partial claim made by the Secretary under this section. Any such contract shall provide that such entity shall provide quarterly statements to the holder of the loan for which the Secretary makes the partial claim. (d) Requirements of loan holder (1) The Secretary may require the holder of a loan for which the Secretary makes a partial claim under this section to take any actions necessary to establish the partial claim, including preparing, executing, transmitting, receiving, and recording loan documents. (2) The Secretary shall compensate the holder of such a loan appropriately, as determined by the Secretary, for the services required of such holder under this subsection. (3) 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 section that would otherwise govern the expenditure of public funds. (e) Default and foreclosure (1) (A) Notwithstanding section 3703(e) of this title, an individual who defaults on a loan for which the Secretary makes a partial claim made under this section shall be liable to the Secretary for any loss suffered by the Secretary resulting from such default. Such a loss may be recovered in the same manner as any other debt due the United States. (B) In the event of default by an individual on a loan for which the Secretary makes a partial claim made under this section, the Secretary may reduce the aggregate amount of guaranty or insurance housing loan entitlement available to the individual under this chapter. (2) Notwithstanding section 2410(c) of title 28, 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 located. (f) Decisions by the Secretary (1) Any partial claim made under this section shall be made in the sole discretion of the Secretary and on terms and conditions acceptable to the Secretary that are consistent with this section. (2) Any decision by the Secretary under this section is final and conclusive and is not subject to judicial review. (3) For purposes of section 511 of this title, any decision under this section shall not be treated as a decision under a law that affects the provision of benefits. (g) Compliance (1) The Secretary may establish standards for processing payments under this section based on a certification by a holder of a loan guaranteed under such chapter that the holder has complied with all applicable requirements established by the Secretary. (2) The Secretary shall carry out, on a random-sampling basis, post-payment audits to ensure compliance with all requirements under paragraph (1). (h) Guidance with respect to certain loans (1) With respect to a loan described 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, additional requirements applicable to such a partial claim. (2) A loan described in this paragraph is a loan that the Secretary determines was in default on the date of the enactment of this section. (i) Rule of construction Nothing in this section shall be construed to limit the authority of the Secretary under subsections (a) and (d) of section 3732 of this title. (j) Termination The Secretary may not make a partial claim under this section after the date that is five years after the date of the enactment of this section. . (b) Clerical amendment The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 3736 the following new item: 3737. Partial Claim Program. . 4. Strategy of the Secretary of Veterans Affairs regarding the effect of certain litigation Not later than 90 days after the date of the enactment of this Act, the Secretary of Veterans Affairs shall submit to the Committees on Veterans’ Affairs of the Senate 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 disadvantage when attempting to secure representation by a real estate agent or broker. Such strategy may include amendments to section 36.4313 of title 38, Code of Federal Regulations. 5. Increase of authorization of appropriations for comprehensive service programs for homeless veterans Section 2016 of title 38, United States Code, is amended— (1) in paragraph (7), by striking fiscal year 2015 and each subsequent fiscal year and inserting each of fiscal years 2015 through 2024 ; and (2) by adding at the end the following new paragraphs: (8) $344,000,000 for each of fiscal years 2025 and 2026. (9) $257,700,000 for each fiscal year thereafter through fiscal year 2030. .

Speaker of the House of Representatives. Vice President of the United States and President of the Senate.

tv_txt: IIB 119th CONGRESS 1st Session H. R. 1815 IN THE SENATE OF THE UNITED STATES May 20, 2025 Received; read twice and referred to the Committee on Veterans' Affairs AN ACT To amend title 38, United States Code, to authorize the Secretary of Veterans Affairs to take certain actions in the case of a default on a home loan guaranteed by the Secretary, and for other purposes.

1. Short title This Act may be cited as the VA Home Loan Program Reform Act . 2. Authority of the Secretary of Veterans Affairs to take certain actions in the case of a default on a home loan guaranteed by the Secretary (a) In general Section 3732 of title 38, United States Code, is amended— (1) in subsection (a)— (A) in paragraph (1), by striking obligation 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 determined by the Secretary— (i) pay the holder of a loan guaranteed under this chapter an amount necessary to avoid the foreclosure of such loan; (ii) require the holder of the loan and the veteran 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, including preparing, executing, transmitting, receiving, 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 inserting housing loan ; and (iii) by adding at the end the following 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 certification 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-sampling basis, post-payment audits to ensure compliance with all requirements described in clause (i). ; and (C) in paragraph (5), by striking obligation and inserting loan ; (2) in subsection (c)— (A) in paragraph (1), in the matter preceding subparagraph (A), by striking subsection— and inserting subsection: ; and (B) in paragraph (10)(B)(i), by striking forebearance each place it appears and inserting forbearance ; and (3) by adding at the end the following new subsection: (d) The Secretary shall prescribe loss mitigation procedures, including a mandatory sequence in which the holder of a loan guaranteed under this chapter shall offer loss mitigation options (including an option to enter into a partial claim agreement under the VA Home Loan Program Reform Act ) to a veteran, to help prevent the foreclosure of such loan. The Secretary may not purchase an entire such loan until the veteran has completed such sequence. . (b) Relationship to other powers of Secretary Section 3720 of such title is amended— (1) in subsection (a), by striking Notwithstanding and inserting Except as provided in subsection (h), notwithstanding ; (2) by redesignating subsections (f) through (h) as subsections (e) through (g), respectively; and (3) by adding at the end the following new subsection (h): (h) The Secretary may not take any action under paragraph (2), (3), (4), or (5) of subsection (a) with respect to a loan guaranteed under this chapter before the completion of the sequence of mitigation options offered to the veteran to whom the loan is made under section 3732(d) of this title. . 3. Partial Claim Program of the Department of Veterans Affairs (a) In general Subchapter III of chapter 37 of title 38, United States Code, is amended by adding at the end the following new section: 3737. Partial Claim Program (a) Establishment The Secretary 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 respect to a loan— (1) guaranteed under this chapter; (2) regarding the primary residence of the borrower; and (3) that the Secretary determines is in default or at imminent risk of default. (b) Partial claim described A partial claim described in this subsection, with respect to a loan described in subsection (a), is the purchase by the Secretary of a portion of indebtedness under the loan, through a transaction under which the Secretary— (1) pays to the holder of the loan the amount of indebtedness, subject to subsection (c), that the Secretary determines necessary to help prevent or resolve a default; and (2) receives a secured interest in the property that serves as collateral for the guaranteed loan, which is subordinate to the first lien guaranteed loan for such property. (c) Administration of partial claim (1) (A) Subject to subparagraph (B), the amount of a partial claim under this section with respect to a loan guaranteed described in subsection (a) may not exceed 25 percent of the unpaid principal balance of the loan on the date on which the partial claim is made. (B) In the case of an individual who failed to make a payment on a loan guaranteed under this chapter during the period beginning on March 1, 2020 and ending on May 1, 2025, the amount of a partial claim under this section may not exceed 30 percent of the unpaid principal balance of the guaranteed loan as of the date that the initial partial claim is made. (2) (A) Subject to subparagraph (B), the Secretary may make only one partial claim per loan. (B) The Secretary may make an additional partial claim on a loan guaranteed under this chapter in the case of an individual who failed to make a payment on such loan during— (i) a major disaster declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5170 ); or (ii) the period of 120 days following such a major disaster. (3) An amount paid to the holder of a loan as a partial claim— (A) shall not count against the amount of a loan that may otherwise be guaranteed under this chapter; and (B) may not be applied to the portion of the loan that is guaranteed under this chapter. (4) A holder of a loan guaranteed under such chapter for which the Secretary makes a partial claim under this section shall apply the amount paid by the Secretary for the partial claim first to arrearages, if any, on the guaranteed loan. Such arrearages may include any additional costs (such as taxes, insurance premiums, or homeowner’s dues) the Secretary determines necessary to prevent or resolve a default. (5) The Secretary may enter into a contract with an appropriate entity for the service of a partial claim made by the Secretary under this section. Any such contract shall provide that such entity shall provide quarterly statements to the holder of the loan for which the Secretary makes the partial claim. (d) Requirements of loan holder (1) The Secretary may require the holder of a loan for which the Secretary makes a partial claim under this section to take any actions necessary to establish the partial claim, including preparing, executing, transmitting, receiving, and recording loan documents. (2) The Secretary shall compensate the holder of such a loan appropriately, as determined by the Secretary, for the services required of such holder under this subsection. (3) 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 section that would otherwise govern the expenditure of public funds. (e) Default and foreclosure (1) (A) Notwithstanding section 3703(e) of this title, an individual who defaults on a loan for which the Secretary makes a partial claim made under this section shall be liable to the Secretary for any loss suffered by the Secretary resulting from such default. Such a loss may be recovered in the same manner as any other debt due the United States. (B) In the event of default by an individual on a loan for which the Secretary makes a partial claim made under this section, the Secretary may reduce the aggregate amount of guaranty or insurance housing loan entitlement available to the individual under this chapter. (2) Notwithstanding section 2410(c) of title 28, 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 located. (f) Decisions by the Secretary (1) Any partial claim made under this section shall be made in the sole discretion of the Secretary and on terms and conditions acceptable to the Secretary that are consistent with this section. (2) Any decision by the Secretary under this section is final and conclusive and is not subject to judicial review. (3) For purposes of section 511 of this title, any decision under this section shall not be treated as a decision under a law that affects the provision of benefits. (g) Compliance (1) The Secretary may establish standards for processing payments under this section based on a certification by a holder of a loan guaranteed under such chapter that the holder has complied with all applicable requirements established by the Secretary. (2) The Secretary shall carry out, on a random-sampling basis, post-payment audits to ensure compliance with all requirements under paragraph (1). (h) Guidance with respect to certain loans (1) With respect to a loan described 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, additional requirements applicable to such a partial claim. (2) A loan described in this paragraph is a loan that the Secretary determines was in default on the date of the enactment of this section. (i) Rule of construction Nothing in this section shall be construed to limit the authority of the Secretary under subsections (a) and (d) of section 3732 of this title. (j) Termination The Secretary may not make a partial claim under this section after the date that is five years after the date of the enactment of this section. . (b) Clerical amendment The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 3736 the following new item: 3737. Partial Claim Program. . 4. Strategy of the Secretary of Veterans Affairs regarding the effect of certain litigation Not later than 90 days after the date of the enactment of this Act, the Secretary of Veterans Affairs shall submit to the Committees on Veterans’ Affairs of the Senate 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 disadvantage when attempting to secure representation by a real estate agent or broker. Such strategy may include amendments to section 36.4313 of title 38, Code of Federal Regulations. 5. Increase of authorization of appropriations for comprehensive service programs for homeless veterans Section 2016 of title 38, United States Code, is amended— (1) in paragraph (7), by striking fiscal year 2015 and each subsequent fiscal year and inserting each of fiscal years 2015 through 2024 ; and (2) by adding at the end the following new paragraphs: (8) $344,000,000 for each of fiscal years 2025 and 2026. (9) $257,700,000 for each fiscal year thereafter through fiscal year 2030. .

Passed the House of Representatives May 19, 2025. Kevin F. McCumber, Clerk.

tv_txt: I 119th CONGRESS 1st Session H. R. 1815 IN THE HOUSE OF REPRESENTATIVES AN ACT To amend title 38, United States Code, to authorize the Secretary of Veterans Affairs to take certain actions in the case of a default on a home loan guaranteed by the Secretary, and for other purposes.

1. Short title This Act may be cited as the VA Home Loan Program Reform Act . 2. Authority of the Secretary of Veterans Affairs to take certain actions in the case of a default on a home loan guaranteed by the Secretary (a) In general Section 3732 of title 38, United States Code, is amended— (1) in subsection (a)— (A) in paragraph (1), by striking obligation 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 determined by the Secretary— (i) pay the holder of a loan guaranteed under this chapter an amount necessary to avoid the foreclosure of such loan; (ii) require the holder of the loan and the veteran 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, including preparing, executing, transmitting, receiving, 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 inserting housing loan ; and (iii) by adding at the end the following 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 certification 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-sampling basis, post-payment audits to ensure compliance with all requirements described in clause (i). ; and (C) in paragraph (5), by striking obligation and inserting loan ; (2) in subsection (c)— (A) in paragraph (1), in the matter preceding subparagraph (A), by striking subsection— and inserting subsection: ; and (B) in paragraph (10)(B)(i), by striking forebearance each place it appears and inserting forbearance ; and (3) by adding at the end the following new subsection: (d) The Secretary shall prescribe loss mitigation procedures, including a mandatory sequence in which the holder of a loan guaranteed under this chapter shall offer loss mitigation options (including an option to enter into a partial claim agreement under the VA Home Loan Program Reform Act ) to a veteran, to help prevent the foreclosure of such loan. The Secretary may not purchase an entire such loan until the veteran has completed such sequence. . (b) Relationship to other powers of Secretary Section 3720 of such title is amended— (1) in subsection (a), by striking Notwithstanding and inserting Except as provided in subsection (h), notwithstanding ; (2) by redesignating subsections (f) through (h) as subsections (e) through (g), respectively; and (3) by adding at the end the following new subsection (h): (h) The Secretary may not take any action under paragraph (2), (3), (4), or (5) of subsection (a) with respect to a loan guaranteed under this chapter before the completion of the sequence of mitigation options offered to the veteran to whom the loan is made under section 3732(d) of this title. . 3. Partial Claim Program of the Department of Veterans Affairs (a) In general Subchapter III of chapter 37 of title 38, United States Code, is amended by adding at the end the following new section: 3737. Partial Claim Program (a) Establishment The Secretary 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 respect to a loan— (1) guaranteed under this chapter; (2) regarding the primary residence of the borrower; and (3) that the Secretary determines is in default or at imminent risk of default. (b) Partial claim described A partial claim described in this subsection, with respect to a loan described in subsection (a), is the purchase by the Secretary of a portion of indebtedness under the loan, through a transaction under which the Secretary— (1) pays to the holder of the loan the amount of indebtedness, subject to subsection (c), that the Secretary determines necessary to help prevent or resolve a default; and (2) receives a secured interest in the property that serves as collateral for the guaranteed loan, which is subordinate to the first lien guaranteed loan for such property. (c) Administration of partial claim (1) (A) Subject to subparagraph (B), the amount of a partial claim under this section with respect to a loan guaranteed described in subsection (a) may not exceed 25 percent of the unpaid principal balance of the loan on the date on which the partial claim is made. (B) In the case of an individual who failed to make a payment on a loan guaranteed under this chapter during the period beginning on March 1, 2020 and ending on May 1, 2025, the amount of a partial claim under this section may not exceed 30 percent of the unpaid principal balance of the guaranteed loan as of the date that the initial partial claim is made. (2) (A) Subject to subparagraph (B), the Secretary may make only one partial claim per loan. (B) The Secretary may make an additional partial claim on a loan guaranteed under this chapter in the case of an individual who failed to make a payment on such loan during— (i) a major disaster declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5170 ); or (ii) the period of 120 days following such a major disaster. (3) An amount paid to the holder of a loan as a partial claim— (A) shall not count against the amount of a loan that may otherwise be guaranteed under this chapter; and (B) may not be applied to the portion of the loan that is guaranteed under this chapter. (4) A holder of a loan guaranteed under such chapter for which the Secretary makes a partial claim under this section shall apply the amount paid by the Secretary for the partial claim first to arrearages, if any, on the guaranteed loan. Such arrearages may include any additional costs (such as taxes, insurance premiums, or homeowner’s dues) the Secretary determines necessary to prevent or resolve a default. (5) The Secretary may enter into a contract with an appropriate entity for the service of a partial claim made by the Secretary under this section. Any such contract shall provide that such entity shall provide quarterly statements to the holder of the loan for which the Secretary makes the partial claim. (d) Requirements of loan holder (1) The Secretary may require the holder of a loan for which the Secretary makes a partial claim under this section to take any actions necessary to establish the partial claim, including preparing, executing, transmitting, receiving, and recording loan documents. (2) The Secretary shall compensate the holder of such a loan appropriately, as determined by the Secretary, for the services required of such holder under this subsection. (3) 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 section that would otherwise govern the expenditure of public funds. (e) Default and foreclosure (1) (A) Notwithstanding section 3703(e) of this title, an individual who defaults on a loan for which the Secretary makes a partial claim made under this section shall be liable to the Secretary for any loss suffered by the Secretary resulting from such default. Such a loss may be recovered in the same manner as any other debt due the United States. (B) In the event of default by an individual on a loan for which the Secretary makes a partial claim made under this section, the Secretary may reduce the aggregate amount of guaranty or insurance housing loan entitlement available to the individual under this chapter. (2) Notwithstanding section 2410(c) of title 28, 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 located. (f) Decisions by the Secretary (1) Any partial claim made under this section shall be made in the sole discretion of the Secretary and on terms and conditions acceptable to the Secretary that are consistent with this section. (2) Any decision by the Secretary under this section is final and conclusive and is not subject to judicial review. (3) For purposes of section 511 of this title, any decision under this section shall not be treated as a decision under a law that affects the provision of benefits. (g) Compliance (1) The Secretary may establish standards for processing payments under this section based on a certification by a holder of a loan guaranteed under such chapter that the holder has complied with all applicable requirements established by the Secretary. (2) The Secretary shall carry out, on a random-sampling basis, post-payment audits to ensure compliance with all requirements under paragraph (1). (h) Guidance with respect to certain loans (1) With respect to a loan described 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, additional requirements applicable to such a partial claim. (2) A loan described in this paragraph is a loan that the Secretary determines was in default on the date of the enactment of this section. (i) Rule of construction Nothing in this section shall be construed to limit the authority of the Secretary under subsections (a) and (d) of section 3732 of this title. (j) Termination The Secretary may not make a partial claim under this section after the date that is five years after the date of the enactment of this section. . (b) Clerical amendment The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 3736 the following new item: 3737. Partial Claim Program. . 4. Strategy of the Secretary of Veterans Affairs regarding the effect of certain litigation Not later than 90 days after the date of the enactment of this Act, the Secretary of Veterans Affairs shall submit to the Committees on Veterans’ Affairs of the Senate 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 disadvantage when attempting to secure representation by a real estate agent or broker. Such strategy may include amendments to section 36.4313 of title 38, Code of Federal Regulations. 5. Increase of authorization of appropriations for comprehensive service programs for homeless veterans Section 2016 of title 38, United States Code, is amended— (1) in paragraph (7), by striking fiscal year 2015 and each subsequent fiscal year and inserting each of fiscal years 2015 through 2024 ; and (2) by adding at the end the following new paragraphs: (8) $344,000,000 for each of fiscal years 2025 and 2026. (9) $257,700,000 for each fiscal year thereafter through fiscal year 2030. .

Passed the House of Representatives May 19, 2025. Kevin F. McCumber, Clerk.

tv_txt: IB Union Calendar No. 77 119th CONGRESS 1st Session H. R. 1815 [Report No. 119–104] IN THE HOUSE OF REPRESENTATIVES March 3, 2025 Mr. Van Orden introduced the following bill; which was referred to the Committee on Veterans' Affairs May 19, 2025 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed Strike out all after the enacting clause and insert the part printed in italic For text of introduced bill, see copy of bill as introduced on March 3, 2025 A BILL To amend title 38, United States Code, to authorize the Secretary of Veterans Affairs to take certain actions in the case of a default on a home loan guaranteed by the Secretary, and for other purposes.

1. Short title This Act may be cited as the VA Home Loan Program Reform Act . 2. Authority of the Secretary of Veterans Affairs to take certain actions in the case of a default on a home loan guaranteed by the Secretary (a) In general Section 3732 of title 38, United States Code, is amended— (1) in subsection (a)— (A) in paragraph (1), by striking obligation 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 determined by the Secretary— (i) pay the holder of a loan guaranteed under this chapter an amount necessary to avoid the foreclosure of such loan; (ii) require the holder of the loan and the veteran 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, including preparing, executing, transmitting, receiving, 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 inserting housing loan ; and (iii) by adding at the end the following 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 certification 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-sampling basis, post-payment audits to ensure compliance with all requirements described in clause (i). ; and (C) in paragraph (5), by striking obligation and inserting loan ; (2) in subsection (c)— (A) in paragraph (1), in the matter preceding subparagraph (A), by striking subsection— and inserting subsection: ; and (B) in paragraph (10)(B)(i), by striking forebearance each place it appears and inserting forbearance ; and (3) by adding at the end the following new subsection: (d) The Secretary shall prescribe loss mitigation procedures, including a mandatory sequence in which the holder of a loan guaranteed under this chapter shall offer loss mitigation options (including an option to enter into a partial claim agreement under the VA Home Loan Program Reform Act ) to a veteran, to help prevent the foreclosure of such loan. The Secretary may not purchase an entire such loan until the veteran has completed such sequence. . (b) Relationship to other powers of Secretary Section 3720 of such title is amended— (1) in subsection (a), by striking Notwithstanding and inserting Except as provided in subsection (h), notwithstanding ; (2) by redesignating subsections (f) through (h) as subsections (e) through (g), respectively; and (3) by adding at the end the following new subsection (h): (h) The Secretary may not take any action under paragraph (2), (3), (4), or (5) of subsection (a) with respect to a loan guaranteed under this chapter before the completion of the sequence of mitigation options offered to the veteran to whom the loan is made under section 3732(d) of this title. . 3. Partial Claim Program of the Department of Veterans Affairs (a) In general Subchapter III of chapter 37 of title 38, United States Code, is amended by adding at the end the following new section: 3737. Partial Claim Program (a) Establishment The Secretary 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 respect to a loan— (1) guaranteed under this chapter; (2) regarding the primary residence of the borrower; and (3) that the Secretary determines is in default or at imminent risk of default. (b) Partial claim described A partial claim described in this subsection, with respect to a loan described in subsection (a), is the purchase by the Secretary of a portion of indebtedness under the loan, through a transaction under which the Secretary— (1) pays to the holder of the loan the amount of indebtedness, subject to subsection (c), that the Secretary determines necessary to help prevent or resolve a default; and (2) receives a secured interest in the property that serves as collateral for the guaranteed loan, which is subordinate to the first lien guaranteed loan for such property. (c) Administration of partial claim (1) (A) Subject to subparagraph (B), the amount of a partial claim under this section with respect to a loan guaranteed described in subsection (a) may not exceed 25 percent of the unpaid principal balance of the loan on the date on which the partial claim is made. (B) In the case of an individual who failed to make a payment on a loan guaranteed under this chapter during the period beginning on March 1, 2020 and ending on May 1, 2025, the amount of a partial claim under this section may not exceed 30 percent of the unpaid principal balance of the guaranteed loan as of the date that the initial partial claim is made. (2) (A) Subject to subparagraph (B), the Secretary may make only one partial claim per loan. (B) The Secretary may make an additional partial claim on a loan guaranteed under this chapter in the case of an individual who failed to make a payment on such loan during— (i) a major disaster declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5170 ); or (ii) the period of 120 days following such a major disaster. (3) An amount paid to the holder of a loan as a partial claim— (A) shall not count against the amount of a loan that may otherwise be guaranteed under this chapter; and (B) may not be applied to the portion of the loan that is guaranteed under this chapter. (4) A holder of a loan guaranteed under such chapter for which the Secretary makes a partial claim under this section shall apply the amount paid by the Secretary for the partial claim first to arrearages, if any, on the guaranteed loan. Such arrearages may include any additional costs (such as taxes, insurance premiums, or homeowner’s dues) the Secretary determines necessary to prevent or resolve a default. (5) The Secretary may enter into a contract with an appropriate entity for the service of a partial claim made by the Secretary under this section. Any such contract shall provide that such entity shall provide quarterly statements to the holder of the loan for which the Secretary makes the partial claim. (d) Requirements of loan holder (1) The Secretary may require the holder of a loan for which the Secretary makes a partial claim under this section to take any actions necessary to establish the partial claim, including preparing, executing, transmitting, receiving, and recording loan documents. (2) The Secretary shall compensate the holder of such a loan appropriately, as determined by the Secretary, for the services required of such holder under this subsection. (3) 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 section that would otherwise govern the expenditure of public funds. (e) Default and foreclosure (1) (A) Notwithstanding section 3703(e) of this title, an individual who defaults on a loan for which the Secretary makes a partial claim made under this section shall be liable to the Secretary for any loss suffered by the Secretary resulting from such default. Such a loss may be recovered in the same manner as any other debt due the United States. (B) In the event of default by an individual on a loan for which the Secretary makes a partial claim made under this section, the Secretary may reduce the aggregate amount of guaranty or insurance housing loan entitlement available to the individual under this chapter. (2) Notwithstanding section 2410(c) of title 28, 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 located. (f) Decisions by the Secretary (1) Any partial claim made under this section shall be made in the sole discretion of the Secretary and on terms and conditions acceptable to the Secretary that are consistent with this section. (2) Any decision by the Secretary under this section is final and conclusive and is not subject to judicial review. (3) For purposes of section 511 of this title, any decision under this section shall not be treated as a decision under a law that affects the provision of benefits. (g) Compliance (1) The Secretary may establish standards for processing payments under this section based on a certification by a holder of a loan guaranteed under such chapter that the holder has complied with all applicable requirements established by the Secretary. (2) The Secretary shall carry out, on a random-sampling basis, post-payment audits to ensure compliance with all requirements under paragraph (1). (h) Guidance with respect to certain loans (1) With respect to a loan described 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, additional requirements applicable to such a partial claim. (2) A loan described in this paragraph is a loan that the Secretary determines was in default on the date of the enactment of this section. (i) Rule of construction Nothing in this section shall be construed to limit the authority of the Secretary under subsections (a) and (d) of section 3732 of this title. (j) Termination The Secretary may not make a partial claim under this section after the date that is five years after the date of the enactment of this section. . (b) Clerical amendment The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 3736 the following new item: 3737. Partial Claim Program. . 4. Strategy of the Secretary of Veterans Affairs regarding the effect of certain litigation Not later than 90 days after the date of the enactment of this Act, the Secretary of Veterans Affairs shall submit to the Committees on Veterans’ Affairs of the Senate 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 disadvantage when attempting to secure representation by a real estate agent or broker. Such strategy may include amendments to section 36.4313 of title 38, Code of Federal Regulations. 5. Increase of authorization of appropriations for comprehensive service programs for homeless veterans Section 2016 of title 38, United States Code, is amended— (1) in paragraph (7), by striking fiscal year 2015 and each subsequent fiscal year and inserting each of fiscal years 2015 through 2024 ; and (2) by adding at the end the following new paragraphs: (8) $344,000,000 for each of fiscal years 2025 and 2026. (9) $257,700,000 for each fiscal year thereafter. .

May 19, 2025 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

tv_txt: I 119th CONGRESS 1st Session H. R. 1815 IN THE HOUSE OF REPRESENTATIVES March 3, 2025 Mr. Van Orden 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 in the case of a default on a home loan guaranteed by the Secretary, and for other purposes.

1. Short title This Act may be cited as the VA Home Loan Program Reform Act . 2. Authority of the Secretary of Veterans Affairs to take certain actions in the case of a default on a home loan guaranteed by the Secretary (a) In general Section 3732 of title 38, United States Code, is amended— (1) in subsection (a)— (A) in paragraph (1), by striking obligation 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 foreclosure of such loan; (ii) require the holder of the loan and the veteran 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, including preparing, executing, transmitting, receiving, 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 inserting housing loan ; and (iii) by adding at the end the following 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 certification 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-sampling basis, post-payment audits to ensure compliance with all requirements described in clause (i). ; and (C) in paragraph (5), by striking obligation and inserting loan ; (2) in subsection (c)(10)(B)(i), by striking forebearance each place it appears and inserting forbearance ; and (3) by adding at the end the following new subsection: (d) The Secretary shall prescribe loss mitigation procedures, including a mandatory sequence in which the holder of a loan guaranteed under this chapter shall offer loss mitigation options (including an option to enter into a partial claim agreement under the VA Home Loan Program Reform Act ) to a veteran, to help prevent the foreclosure of such loan. The Secretary may not purchase an entire such loan until the veteran has completed such sequence. . (b) Relationship to other powers of Secretary Section 3720 of such title is amended— (1) in subsection (a), by striking Notwithstanding and inserting Except as provided in subsection (h), notwithstanding ; (2) by redesignating subsections (f) through (h) as subsections (e) through (g), respectively; and (3) by adding at the end the following new subsection (h): (h) The Secretary may not take any action under paragraph (2),(3),(4), or (5) of subsection (a) with respect to a loan guaranteed under this chapter before the completion of the sequence of mitigation options offered to the veteran to whom the loan is made under section 3732(d) of this title. . 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 respect to a loan— (1) guaranteed under chapter 37 of title 38, United States Code; (2) regarding the primary residence of the borrower; and (3) that the Secretary determines is in default or at imminent risk of default. (b) Partial claim described A partial claim described in this subsection is the purchase by the Secretary 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 guaranteed loan the amount of indebtedness, subject to subsection (d), that the Secretary determines necessary to help prevent or resolve a default; 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 Secretary 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 three years 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 repayment 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 partial 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 guaranteed loan on the date on which the partial claim is made. (2) One partial claim per loan The Secretary may make only one partial claim per loan. (3) Not an advance The Secretary may not structure a partial claim as an advance on a new loan guaranteed under such chapter. (4) 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 necessary to prevent or resolve a default. (5) Authority to contract The Secretary may enter into a contract with an entity for service of a partial claim under this section. Such entity shall provide quarterly statements to the borrower. (e) Requirements of loan holder (1) Establishment of claim The Secretary may require the holder of a loan, regarding which the Secretary makes a partial claim under this section, to take any actions necessary to establish the partial claim, including preparing, executing, transmitting, receiving, and recording loan documents. (2) Compensation of holder The Secretary shall compensate the holder of such a loan appropriately, as determined by the Secretary, for the services required of such holder under this subsection. (3) 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 section that would otherwise govern the expenditure of public funds. (f) Default and foreclosure (1) Default (A) In general Notwithstanding section 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 Secretary may reduce the aggregate amount of guaranty or insurance housing loan entitlement available to the individual under such chapter. (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 located. (g) Decisions by the Secretary (1) Sole discretion Any partial claim under this section shall be made in the sole discretion 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 conclusive and is not subject to judicial review. (3) Effect 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 holder 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 ensure compliance with all requirements described in paragraph (1). (i) Guidance with respect to certain loans (1) In general With respect to a loan described 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, additional 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 section shall be construed to limit the authority of the Secretary under subsections (a) and (d) of section 3732 of 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, 2027. 4. Strategy of the Secretary of Veterans Affairs regarding the effect of certain litigation Not later than 90 days after the date of the enactment of this Act, the Secretary of Veterans Affairs shall submit to the Committees on Veterans’ Affairs of the Senate 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 disadvantage when attempting to secure representation by a real estate agent or broker. Such strategy may include amendments to section 36.4313 of title 38, Code of Federal Regulations.