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Modifies 38 U.S.C. 3710 by removing a five-year temporal limitation from subsection (a)(12) and replacing subsection (h) with a new provision that prohibits guarantees under (a)(12) until the Secretary prescribes required regulations and requires those regulations to be, to the extent suitable, consistent with Federal National Mortgage Association requirements.
Amends 38 U.S.C. 3729(b) to except loans guaranteed under 38 U.S.C. 3710(a)(12) from the general phrasing of paragraph (1) and adds a new paragraph (5) specifying the fee calculation for such loans (loan-fee-table amount plus 3.25 percent of the total loan amount or unpaid principal balance on assumption).
Amends 38 U.S.C. 3703(a)(1)(A)(i)(IV) to include subsection (12) in the list of qualifying items by inserting '(12)' alongside '(8)'.
Adds a new paragraph (3) to 38 U.S.C. 3704(c) treating stock or membership in a cooperative housing corporation (as defined in section 216(b) of the Internal Revenue Code) that entitles occupancy of a single-family residential unit as 'residential property' for purposes of that subsection.
Adds a new subsection (i) to 38 U.S.C. 3714 treating stock or membership in a cooperative housing corporation (as defined in section 216(b) of the Internal Revenue Code) that entitles occupancy of a single-family residential unit as 'residential property' for purposes of that section.
Expands the VA Home Loan program so eligible veterans and service members can use a VA-guaranteed loan to buy shares in a housing cooperative (a “co‑op”) tied to a specific dwelling unit. It directs the Department of Veterans Affairs to write regulations before these guarantees begin and sets a distinct VA funding fee structure for these loans. It treats co‑op shares like residential property for key VA rules, authorizes the VA to advertise the new benefit, and allows the VA to issue guidance to lenders and borrowers before final regulations are published. This aims to open more homeownership options for veterans, especially in markets where co‑ops are common.
Amend 38 U.S.C. 3710: In subsection (a)(12), change the introductory language by replacing a time-limited phrase with the word “To,” removing the five-year limitation language that previously qualified the paragraph.
Replace subsection (h) of 38 U.S.C. 3710 with a new provision that prohibits guaranteeing a loan under 3710(a)(12) until the Secretary prescribes regulations setting requirements for underwriting, loan processing, project standards, share eligibility, valuation, and other necessary criteria. The Secretary must ensure those regulations are, to the extent suitable, consistent with Federal National Mortgage Association requirements for purchase or securitization of cooperative housing loans.
Amend 38 U.S.C. 3729(b) to change the lead phrase of paragraph (1) to read “Except as provided in paragraph (5), the amount” and add a new paragraph (5) that specifies the fee for loans guaranteed under 3710(a)(12) shall be the amount from the loan fee table under paragraph (2) plus 3.25 percent of the total loan amount (or, for a loan assumption, 3.25 percent of the unpaid principal balance at transfer).
Amend 38 U.S.C. 3703(a)(1)(A)(i)(IV) by inserting “(12)” into the list so that loans under 3710(a)(12) are included in the referenced provision.
Amend 38 U.S.C. 3704(c) by adding a new paragraph (3) stating that stock or membership in a cooperative housing corporation (as defined in the Internal Revenue Code) that entitles a person to occupy a single-family residential unit shall be treated as residential property for purposes of that subsection.
Veterans and service members gain another pathway to homeownership by allowing VA-backed financing for co‑op units, which can be common in some urban markets. Lenders benefit from clear authority and guidance to originate and service these loans, but will need to update underwriting, documentation, and collateral procedures for share-secured, proprietary-lease structures. Cooperative housing corporations and boards may see a broader pool of veteran buyers and should expect VA-related documentation and occupancy compliance checks. The VA will undertake rulemaking, outreach, and potentially interim guidance, adding near-term administrative work but improving awareness and consistent practices. Overall fiscal impact is limited because the program uses the existing guaranty framework and funding fees to manage risk, while potentially modestly increasing veteran homeownership opportunities.
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Referred to the House Committee on Veterans' Affairs.
Introduced March 3, 2025 by Grace Meng · Last progress March 3, 2025
Forwarded by Subcommittee to Full Committee by Voice Vote.
Subcommittee Consideration and Mark-up Session Held
Subcommittee Hearings Held
Referred to the Subcommittee on Economic Opportunity.