119-hr1815

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1815 Enrolled Bill

    (ENR) ]

 H.R.1815

 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

 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.''.

 Speaker of the House of Representatives.

 Vice President of the United States and 
 President of the Senate.