The House Veterans Affairs Committee didnt waste any time rushing a bill to fine-tune the VA loan guaranty program through the often- tedious legislative process, registering approvals at both the subcommittee and full committee levels July 21.
The committee introduced the bill July 12, and sources there expect it to be voted on by the full House by Aug. 1. The biggest effect for mortgage lenders is in a provision that will permit the conversion of adjustable-rate mortgages to fixed-rate mortgages, a stipulation mortgage bankers were quick to advocate during a hearing on the issue before the Housing and Memorial Affairs Subcommittee June 30.
The bill, H.R. 4724, is sponsored by Subcommittee Chairman George E. Sangmeister and would waive the two-year minimum service requirement for loan guaranty benefits for service members who were released from active duty due to a reduction in force, another potentially beneficial provision for lenders given the significant cutbacks in defense spending over the last several years.
The bill, however, did not include the two-step mortgage provision lenders had requested during the hearing. Nor has there been any movement on the increase in the VA loan guaranty limits, which was passed by the House Sept. 21, 1993, but has since languished in committee while the Senate debates unrelated veterans benefits issues. That provision would lift the guaranty level to $203,000 from its $184,000 level.
The bill would also:
*Waive the six-year minimum service requirement for reservists discharged because of a service-connected disability;
*Provide loan guaranty eligibility for surviving spouses or reservists who died while on active duty, or from service-related disabilities;
*Permit VA to guaranty newly constructed residences in areas not served by public or community waste and sewerage systems if individual water and sewage disposal systems meet federal, state and local requirements;
*Authorize the VA to include in interest rate reduction refinance loans an additional amount for energy efficient improvements;
*Provide that any manufactured home properly displaying a certificate of conformity with all applicable federal manufactured home construction and safety standards would be eligible for purchase with VA financing;
*Permit VA to accept conveyance of the property from a loan holder, notwithstanding the holders overbid at the liquidation sale.