Lenders will see a somewhat wider field of options available through their veterans affairs loan programs now that the full House has passed legislation that "cleans up" portions of the program.
The House, as expected, quickly passed H.R. 4724 by voice vote Aug. 1, sending it to the senate where approval will probably have to wait until after Congress finishes with Whitewater proceedings and health care reform. Senate staffers said approval could come shortly after the recess.
The House bill, which was put on a fast-track after being approved by both the housing subcommittee and veterans affairs committee in the same day, will permit the conversion of adjustable-rate mortgages to fixed-rate mortgages and waives the six-year minimum service requirement for reservists discharged because of service-related disabilities.
While progress on the VA housing legislation has been remarkably quick, movement on the VA loan guaranty increase hasn't been as rapid.
The House passed legislation Sept. 21 to increase the guaranty limit to $50,750 from $46,000, pushing the maximum allowable loan for veterans from $184,000 to $203,000. The bill, H.R. 949, is an amendment to the U.S. Code and was unanimously approved in the House and the Senate.
The original bill was passed by the Senate Veterans Affairs Committee in May 1993, and was later incorporated into S. 1510, the Unified Service Employment and Reemployment Act, where it has languished ever since. House and Senate conferees disagree on provisions related to veterans' reemployment rights and only recently has the Senate even put the issue on its calendar. And while it has been recognized, no new date has been set.
Some mortgage industry insiders have speculated the bill, now nearly a year in conference, could be supplanted into the faster-moving housing legislation. But a staffer in the Senate Veterans Affairs Committee said that scenario was unlikely since the legislation has several controversial tax revenue implications and other Senate committees, including the Budget Committee also have jurisdiction, a point that could delay the legislation further. A Senate staffer said an agreement may not be likely before the end of the year.