May 18, 1998
H.R. 3039 would authorize VA to guarantee up to 15 loans, totaling as much
as $100 million, for non-profit organizations to construct or rehabilitate
multifamily transitional housing projects for homeless veterans.
The Administration is deeply concerned about the plight of homeless veterans. The Administration supports the goal of H.R. 3039 to increase the availability of transitional housing for homeless veterans. In fact, the President's FY 1999 Budget expands funding for homeless assistance, including a significant increase in funding for McKinney Act programs, which provide assistance to homeless veterans.
While the Administration has a number of concerns with H.R. 3039, the Administration is particularly concerned about: (1) how the bill's proposed loan program would be structured and implemented because the loan guarantee program in H.R. 3039 does not conform with the fundamental principles of Federal credit management; and (2) VA has no previous experience administering multi-family housing loan guarantees or guaranteeing debt incurred by non-profit organizations; therefore, H.R. 3039 would necessitate the establishment of a new office within VA to implement the program.
The Administration looks forward to working with the Congress to determine whether existing VA programs can be used and/or enhanced to meet the transitional housing needs of homeless veterans.
H.R. 3039 would affect direct spending; therefore, it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act (OBRA) of 1990. OMB's preliminary scoring estimate of this bill indicates that it would increase direct spending by approximately $3 million in FY 1999 and $48 million during FYs 1999-2003. The bill does not contain offsets for this increased spending. Therefore, if the bill were enacted and the FY 1999 costs were not offset during the remainder of this session of Congress, the bill's deficit effects could contribute to a sequester of mandatory programs.