December 8, 2005

Congressional Action would Allow State to Continue Home Loans to Veterans
Ryan bill would prevent shut-down of state veterans home loan program

(MADISON) -- The U.S. House of Representatives today passed legislation authored by Congressman Paul Ryan (R-WI) that would allow the State of Wisconsin to continue to provide low-cost home mortgage loans to veterans.

Ryan’s measure, based on a bill he introduced earlier this year - the American Veterans Homeownership Act of 2005, was included in H.R. 4297 which passed the House 234-197. It would add new life to an ailing state veterans home loan program by renewing the state’s bond financing authority and removing restrictions that disallowed loans to veterans whose military service came after the Vietnam era.

“This home loan program has served Wisconsin’s veterans well over the years, and we want to keep it going,” Ryan said. “This legislation gives us the chance to extend the program and open it up to help more recent veterans achieve the dream of homeownership. Those serving with honor and bravery today deserve the same access to homeownership that earlier Wisconsin veterans have enjoyed. This is a solid step in the right direction.” Ryan said. 

“Congressman Ryan’s legislation is a great step forward for Wisconsin’s veterans,” said Wisconsin Department of Veterans Affairs Secretary John A. Scocos, “and if it becomes law, it will allow Wisconsin to continue to provide affordable veterans home loans to any state veteran – and now, no matter when he or she served.”

Current federal law allows five states including Wisconsin to provide veterans home loans from the proceeds of issuing tax-exempt bonds. However, the program has significant restrictions that prevent most home-buying veterans from qualifying for the program.

To be eligible for the federally authorized Qualified Veterans Mortgage Bond (QVMB) program, veterans’ military service must have begun prior to 1977.

This restriction has meant that post-Vietnam veterans can not qualify for the program, including veterans of Panama, the Persian Gulf War, Somalia, the Balkans, Iraq, and Afghanistan.

“Our newest returning veterans deserve the opportunity to buy their own home,” said Scocos. “This bill will allow Wisconsin to again offer affordable home loans to our newest returning veterans,” he said.

“As we welcome our newest veterans home, I believe that we should really welcome them home – to their own home,” said Scocos.

Federal law has prevented direct refinancing of the loans. As market interest rates tumbled and led to a wave of refinancing with private lenders, the fund’s cash balance fell sharply and the veterans loan program has looked unlikely to survive.

The state kept the veterans home loan program afloat with the loan program’s dwindling cash reserves, but in a “Stakeholders Conference” sponsored by the department in early November, Scocos announced that without prompt federal action, the veterans loan program would have to be shut down.

Ryan’s bill has received strong bipartisan support, with cosponsors including nearly every member of the Wisconsin Congressional delegation, including Representatives Tammy Baldwin (D-WI), Mark Green (R-WI), Ron Kind (D-WI), Gwen Moore (D-WI), Tom Petri (R-WI), and F. James Sensenbrenner (R-WI). A Senate version of the legislation was authored by U.S. Senator Gordon Smith (R-OR), and cosponsored by Wisconsin’s two U.S. Senators, Herb Kohl (D-WI) and Russ Feingold (D-WI).

The new program would be phased in over a five-year period, beginning in 2005 and sunsetting in 2010.