[119th Congress Public Law 31]
[From the U.S. Government Publishing Office]



[[Page 139 STAT. 475]]

Public Law 119-31
119th Congress

                                 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. <<NOTE: July 30, 2025 -  [H.R. 1815]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: VA Home Loan 
Program Reform Act.>> 
SECTION 1. <<NOTE: 38 USC 101 note.>>  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) <<NOTE: Determination.>>  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) <<NOTE: Records.>>  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.

[[Page 139 STAT. 476]]

    ``(D)(i) <<NOTE: Standards. Certification. Compliance.>>  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) <<NOTE: Audits.>>  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) <<NOTE: Procedures. Contracts.>>  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. <<NOTE: 38 USC 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) <<NOTE: Determination.>>  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

[[Page 139 STAT. 477]]

(a), is the purchase by the Secretary of a portion of indebtedness under 
the loan, through a transaction under which the Secretary--
            ``(1) <<NOTE: Payment. Determination.>>  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) <<NOTE: Time period.>> 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) <<NOTE: Time period.>>  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) <<NOTE: Applicability.>>  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. <<NOTE: Determination.>>  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) <<NOTE: Contracts.>>  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. <<NOTE: Time period. Statements.>>  
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) <<NOTE: Records.>>  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) <<NOTE: Determination.>>  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

[[Page 139 STAT. 478]]

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) <<NOTE: Standards. Certification.>>  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) <<NOTE: Audits.>>  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) <<NOTE: Determination.>>  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 <<NOTE: 38 USC prec. 3701.>>  is amended by inserting after 
the item relating to section 3736 the following new item:

``3737. Partial Claim Program.''.

[[Page 139 STAT. 479]]

SEC. 4. <<NOTE: Reports.>>  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.''.

    Approved July 30, 2025.

LEGISLATIVE HISTORY--H.R. 1815:
---------------------------------------------------------------------------

HOUSE REPORTS: No. 119-104 (Comm. on Veterans' Affairs).
CONGRESSIONAL RECORD, Vol. 171 (2025):
            May 19, considered and passed House.
            July 15, considered and passed Senate.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2025):
            July 30, Presidential remarks.

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