[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1815 Referred in Senate (RFS)]
<DOC>
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``VA Home Loan Program Reform Act''.
SEC. 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.''.
SEC. 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:
``Sec. 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.''.
SEC. 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.
SEC. 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.
Attest:
KEVIN F. MCCUMBER,
Clerk.