H.R. 1815 — VA Home Loan Program Reform Act

This section revises default procedures for loans guaranteed under the Department of Veterans Affairs (VA) home loan guaranty program (i.e., provides eligible veterans, servicemembers, and certain surviving spouses with partial loan guarantees to facilitate homeownership). Specifically, it replaces 38 U.S.C. §3732(a)(2)(A) to authorize the Secretary, under terms and conditions set by the Secretary, to (1) pay the lender an amount necessary to avoid foreclosure, (2) require the lender and veteran to execute documents ensuring the Secretary obtains a secured interest in the property, and (3) require the lender to take necessary actions, including placing the loan in forbearance; adds subparagraphs (C) making such decisions final and not subject to judicial review (and exempt from review under 38 U.S.C. §511 as a benefits decision) and (D) allowing payment processing based on lender certification with random post-payment audits for compliance. It further adds §3732(d) requiring the Secretary to prescribe loss mitigation procedures, including a mandatory sequence of options offered by the lender to the veteran (e.g., a partial claim agreement under the VA Home Loan Program Reform Act), which must be completed before the Secretary purchases the entire loan. (Thus, these changes prioritize foreclosure avoidance for veterans while streamlining VA intervention.) Finally, it amends 38 U.S.C. §3720 to prohibit the Secretary from exercising certain default-related powers—such as acquiring loans or property—prior to completion of the §3732(d) mitigation sequence.

This section establishes the Partial Claim Program, under which the Secretary of Veterans Affairs may purchase a portion of the unpaid principal balance—up to 25% generally or 30% for borrowers delinquent from March 1, 2020, through May 1, 2025—on VA-guaranteed loans for borrowers' primary residences that are in default or at imminent risk of default. (The program provides payments to loan holders to resolve delinquencies, including arrearages such as taxes and insurance; in exchange, VA receives a subordinate lien on the property, with payments not counting against guaranty limits or applied to the guaranteed portion.) The Secretary may make only one partial claim per loan but authorizes a second if the borrower missed payments during a major disaster declared under the Stafford Act (42 U.S.C. 5170) or within 120 days afterward; all decisions are at the Secretary's sole discretion, final, and not subject to judicial review. On borrower default of the partial claim, VA may recover losses as a debt due the United States or reduce the borrower's future VA loan guaranty entitlement, with foreclosure of VA's lien following state or local law.

This section directs the Secretary of Veterans Affairs to submit to the Committees on Veterans’ Affairs of the Senate and House of Representatives, not later than 90 days after enactment, a report on the Secretary's strategy to ensure that veterans purchasing a home with a loan guaranteed under the VA home loan program (chapter 37 of title 38, U.S. Code) are not disadvantaged in securing real estate agent or broker representation. Such strategy may include amendments to Department of Veterans Affairs regulations at 38 CFR 36.4313.

This section revises the authorization of appropriations for comprehensive service programs for homeless veterans (i.e., VA grants and per diem payments to provide housing, treatment, and supportive services to homeless veterans and at-risk veterans) as follows: (1) limits the $257.7 million annual amount for FY2015 and subsequent fiscal years to FY2015 through FY2024; (2) authorizes $344 million (increased from $257.7 million) for each of FY2025 and FY2026; and (3) authorizes $257.7 million for each fiscal year thereafter through FY2030 (previously perpetual after FY2015).