I
119THCONGRESS
1
STSESSION H. R. 1815
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.
IN THE HOUSE OF REPRESENTATIVES
MARCH3, 2025
Mr. V
ANORDENintroduced 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.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘VA Home Loan Pro-4
gram Reform Act’’. 5
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SEC. 2. AUTHORITY OF THE SECRETARY OF VETERANS AF-1
FAIRS TO TAKE CERTAIN ACTIONS IN THE 2
CASE OF A DEFAULT ON A HOME LOAN GUAR-3
ANTEED BY THE SECRETARY. 4
(a) I
NGENERAL.—Section 3732 of title 38, United 5
States Code, is amended— 6
(1) in subsection (a)— 7
(A) in paragraph (1), by striking ‘‘obliga-8
tion’’ each place it appears and inserting 9
‘‘loan’’; 10
(B) in paragraph (2)— 11
(i) by amending subparagraph (A) to 12
read as follows: 13
‘‘(A) The Secretary may, under terms and conditions 14
as determined by the Secretary— 15
‘‘(i) pay the holder of a loan guaranteed under 16
this chapter an amount necessary to avoid the fore-17
closure of such loan; 18
‘‘(ii) require the holder of the loan and the vet-19
eran obligated on the loan to execute all documents 20
necessary to ensure the Secretary obtains a secured 21
interest in the property covered by the loan; and 22
‘‘(iii) require the holder of the loan to take any 23
actions necessary to carry out this paragraph, in-24
cluding preparing, executing, transmitting, receiving, 25
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and recording documents, and requiring the holder 1
of the loan to place the loan in forbearance.’’; 2
(ii) in subparagraph (B), by striking 3
‘‘obligation’’ each place it appears and in-4
serting ‘‘housing loan’’; and 5
(iii) by adding at the end the fol-6
lowing new subparagraphs: 7
‘‘(C)(i) Any decision by the Secretary under this 8
paragraph is final and is not subject to judicial review. 9
‘‘(ii) For purposes of section 511 of this title, any 10
decision under this paragraph shall not be treated as a 11
decision under a law that affects the provision of benefits. 12
‘‘(D)(i) The Secretary may establish standards for 13
processing payments under this paragraph based on a cer-14
tification by a holder of a loan guaranteed under this 15
chapter that the holder has complied with all applicable 16
requirements established by the Secretary. 17
‘‘(ii) The Secretary shall carry out, on a random-sam-18
pling basis, post-payment audits to ensure compliance 19
with all requirements described in clause (i).’’; and 20
(C) in paragraph (5), by striking ‘‘obliga-21
tion’’ and inserting ‘‘loan’’; 22
(2) in subsection (c)(10)(B)(i), by striking 23
‘‘forebearance’’ each place it appears and inserting 24
‘‘forbearance’’; and 25
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(3) by adding at the end the following new sub-1
section: 2
‘‘(d) The Secretary shall prescribe loss mitigation 3
procedures, including a mandatory sequence in which the 4
holder of a loan guaranteed under this chapter shall offer 5
loss mitigation options (including an option to enter into 6
a partial claim agreement under the VA Home Loan Pro-7
gram Reform Act) to a veteran, to help prevent the fore-8
closure of such loan. The Secretary may not purchase an 9
entire such loan until the veteran has completed such se-10
quence.’’. 11
(b) R
ELATIONSHIP TO OTHERPOWERS OF SEC-12
RETARY.—Section 3720 of such title is amended— 13
(1) in subsection (a), by striking ‘‘Notwith-14
standing’’ and inserting ‘‘Except as provided in sub-15
section (h), notwithstanding’’; 16
(2) by redesignating subsections (f) through (h) 17
as subsections (e) through (g), respectively; and 18
(3) by adding at the end the following new sub-19
section (h): 20
‘‘(h) The Secretary may not take any action under 21
paragraph (2),(3),(4), or (5) of subsection (a) with respect 22
to a loan guaranteed under this chapter before the comple-23
tion of the sequence of mitigation options offered to the 24
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veteran to whom the loan is made under section 3732(d) 1
of this title.’’. 2
SEC. 3. PARTIAL CLAIM PROGRAM OF THE DEPARTMENT 3
OF VETERANS AFFAIRS. 4
(a) E
STABLISHMENT.—The Secretary of Veterans 5
Affairs shall carry out a program, to be known as the 6
‘‘Partial Claim Program’’, under which the Secretary may 7
make a partial claim, described in subsection (b), with re-8
spect to a loan— 9
(1) guaranteed under chapter 37 of title 38, 10
United States Code; 11
(2) regarding the primary residence of the bor-12
rower; and 13
(3) that the Secretary determines is in default 14
or at imminent risk of default. 15
(b) P
ARTIALCLAIMDESCRIBED.—A partial claim 16
described in this subsection is the purchase by the Sec-17
retary of a portion of indebtedness under the guaranteed 18
loan, under which— 19
(1) the borrower of the guaranteed loan enters 20
into an agreement under subsection (c); 21
(2) the Secretary pays the holder of the guaran-22
teed loan the amount of indebtedness, subject to 23
subsection (d), that the Secretary determines nec-24
essary to help prevent or resolve a default; and 25
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(3) the Secretary receives a secured interest in 1
the property, subordinate to the first lien guaranteed 2
loan, serving as collateral for the guaranteed loan. 3
(c) A
GREEMENTBETWEENBORROWER AND SEC-4
RETARY.—An agreement under this subsection is an 5
agreement by the borrower of the guaranteed loan to repay 6
the Secretary the amount determined under subsection 7
(b)(2) at the end of the period of such guaranteed loan, 8
subject to the following annual interest: 9
(1) If the borrower agrees to make monthly 10
payments beginning not later than three years after 11
the date on which the Secretary makes the payment 12
under subsection (b)(2), 0 percent. 13
(2) If the borrower does not agree to a repay-14
ment plan under paragraph (1), or fails to comply 15
with such a repayment plan, 0.5 percent. 16
(d) A
DMINISTRATION OFPARTIALCLAIM.— 17
(1) A
MOUNT OF CLAIM.—The amount of a par-18
tial claim under this section with respect to a loan 19
guaranteed under such chapter may not exceed 20 20
percent of the unpaid principal balance of the guar-21
anteed loan on the date on which the partial claim 22
is made. 23
(2) O
NE PARTIAL CLAIM PER LOAN .—The Sec-24
retary may make only one partial claim per loan. 25
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(3) NOT AN ADVANCE.—The Secretary may not 1
structure a partial claim as an advance on a new 2
loan guaranteed under such chapter. 3
(4) A
PPLICATION OF CLAIM .—A holder of a 4
loan guaranteed under such chapter who receives a 5
partial claim under this section with respect to such 6
loan shall apply the payment first to arrearages, if 7
any, on the guaranteed loan, which may include any 8
additional costs (such as taxes, insurance premiums, 9
or homeowner’s dues) the Secretary determines nec-10
essary to prevent or resolve a default. 11
(5) A
UTHORITY TO CONTRACT .—The Secretary 12
may enter into a contract with an entity for service 13
of a partial claim under this section. Such entity 14
shall provide quarterly statements to the borrower. 15
(e) R
EQUIREMENTS OFLOANHOLDER.— 16
(1) E
STABLISHMENT OF CLAIM .—The Sec-17
retary may require the holder of a loan, regarding 18
which the Secretary makes a partial claim under this 19
section, to take any actions necessary to establish 20
the partial claim, including preparing, executing, 21
transmitting, receiving, and recording loan docu-22
ments. 23
(2) C
OMPENSATION OF HOLDER .—The Sec-24
retary shall compensate the holder of such a loan 25
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appropriately, as determined by the Secretary, for 1
the services required of such holder under this sub-2
section. 3
(3) E
XERCISE OF POWERS .—The Secretary 4
may exercise the authority of the Secretary under 5
this subsection without regard to any other provision 6
of law not enacted expressly in limitation of this sec-7
tion that would otherwise govern the expenditure of 8
public funds. 9
(f) D
EFAULT ANDFORECLOSURE.— 10
(1) D
EFAULT.— 11
(A) I
N GENERAL.—Notwithstanding sec-12
tion 3703(e) of title 38, United States Code, an 13
individual who defaults under a partial claim 14
made under this section shall be liable to the 15
Secretary for any loss suffered by the Secretary 16
resulting from such default, and such loss may 17
be recovered in the same manner as any other 18
debt due the United States. 19
(B) R
EDUCTION OF ENTITLEMENT .—In 20
the event of default by an individual under a 21
partial claim made under this section, the Sec-22
retary may reduce the aggregate amount of 23
guaranty or insurance housing loan entitlement 24
available to the individual under such chapter. 25
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(2) FORECLOSURE.—Notwithstanding section 1
2410(c) of title 28, United States Code, an action to 2
foreclose a lien held by the United States arising 3
under a partial claim made under this section shall 4
follow foreclosure procedures in accordance with 5
State or local law where the property involved is lo-6
cated. 7
(g) D
ECISIONS BY THESECRETARY.— 8
(1) S
OLE DISCRETION.—Any partial claim 9
under this section shall be made in the sole discre-10
tion of the Secretary and on terms and conditions 11
acceptable to the Secretary that are consistent with 12
this section. 13
(2) F
INAL AND CONCLUSIVE .—Any decision by 14
the Secretary under this section is final and conclu-15
sive and is not subject to judicial review. 16
(3) E
FFECT ON PROVISION OF BENEFITS .—For 17
purposes of section 511 of title 38, United States 18
Code, any decision under this section shall not be 19
treated as a decision under a law that affects the 20
provision of benefits. 21
(h) C
OMPLIANCE.— 22
(1) P
ROCESSING PAYMENTS .—The Secretary 23
may establish standards for processing payments 24
under this section based on a certification by a hold-25
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er of a loan guaranteed under such chapter that the 1
holder has complied with all applicable requirements 2
established by the Secretary. 3
(2) A
UDITS.—The Secretary shall carry out, on 4
a random-sampling basis, post-payment audits to en-5
sure compliance with all requirements described in 6
paragraph (1). 7
(i) G
UIDANCE WITHRESPECT TO CERTAIN 8
L
OANS.— 9
(1) I
N GENERAL.—With respect to a loan de-10
scribed in paragraph (2), the Secretary may— 11
(A) before prescribing regulations, issue 12
administrative guidance regarding the making 13
of a partial claim relating to such loan; and 14
(B) establish, through such guidance, addi-15
tional requirements applicable to such a partial 16
claim. 17
(2) L
OAN DESCRIBED.—A loan described in this 18
paragraph is a loan that the Secretary determines 19
was in default on the date of the enactment of this 20
Act. 21
(j) R
ULE OFCONSTRUCTION.—Nothing in this sec-22
tion shall be construed to limit the authority of the Sec-23
retary under subsections (a) and (d) of section 3732 of 24
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title 38, United States Code, as amended by section 2 of 1
this Act. 2
(k) T
ERMINATION.—The Secretary may not make a 3
partial claim under this section after September 30, 2027. 4
SEC. 4. STRATEGY OF THE SECRETARY OF VETERANS AF-5
FAIRS REGARDING THE EFFECT OF CERTAIN 6
LITIGATION. 7
Not later than 90 days after the date of the enact-8
ment of this Act, the Secretary of Veterans Affairs shall 9
submit to the Committees on Veterans’ Affairs of the Sen-10
ate and House of Representatives a report on the strategy 11
of the Secretary to ensure that a veteran who seeks to 12
purchase a home with a loan guaranteed under chapter 13
37 of title 38, United States Code, is not at a disadvan-14
tage when attempting to secure representation by a real 15
estate agent or broker. Such strategy may include amend-16
ments to section 36.4313 of title 38, Code of Federal Reg-17
ulations. 18
Æ
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