H.R. 7445, a bill to amend title 38, United States Code, to expand eligibility for home loans from the Secretary of Veterans Affairs to certain members of the reserve components of the Armed Forces, and for other purposes

H.R. 7445 would make two changes to the home loan guarantee program administered by the Department of Veterans Affairs (VA) that would affect net direct spending by an insignificant amount.

Under current law VA typically pays lenders up to 25 percent of the outstanding mortgage balance if a borrower defaults on a guaranteed loan. Those guarantees enable eligible borrowers to obtain better loan terms, such as lower interest rates or smaller down payments. Military personnel and veterans who have served at least 90 days on active duty or six years in the Selected Reserve are eligible for those loan guarantees. Most borrowers pay a fee to VA to participate, and they may use the benefit more than once after they have repaid a guaranteed mortgage. Fees are higher for subsequent uses of the benefit. The fees reduce the subsidy cost of the guarantees by partially offsetting the costs of defaults. The subsidy costs for VA loan guarantees are paid from mandatory appropriations; hence, changing the subsidy cost affects direct spending.