Statement of Administration Policy: H.R. 5002 - Veterans' Housing and Homeless Amendments of 1990

(House)
(Staggers (D) WV and 5 others)

The Administration opposes H.R. 5002, because it contains the following seriously objectionable provisions:

—  Authorization of a new program of direct loans of up to $10,00 for certain veterans who are at least six months in default on their VA guaranteed home loans. A new Federal assistance program for chronically delinquent borrowers is not warranted and would drain resources from the home loan guaranty program. In addition, VA's current refunding program already provides relief to qualified veterans.

—  Extension of home loan guaranty benefits to persons whose only service was in the Reserves, including the National Guard. This readjustment benefit should not be provided to persons already in civilian life whose military service did not limit their ability to finance the purchase of a home.

—  Prohibition on the sale of certain vendee loans. (These are loans to finance the purchase of foreclosed properties from VA.) VA should have flexibility to administer its loan portfolio in the most cost-effective manner.

—  Authorization of a VA demonstration program for adjustable rate mortgages (ARMs). Default rates for ARMs exceed the default rates for fixed interest rate loans. Introduction of ARMs, therefore, would increase Federal costs.

—  Authorization of a new loan program for nonprofit organizations to lease group residences for veterans recovering from substance abuse. This authority is unnecessary because the Anti-Drug Abuse Act of 1988 contains authority for States to make such loans. These loans are also objectionable because they would be made from a Fund intended to be used for hospitalized veterans.