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1 H.R. 4657, Veteran Home Energy Savings Act, as Ordered Reported by the House Committee on Veterans' Affairs on July 28, 2021 1 (August 13, 2021)

handle is hein.congrec/cbovheng0001 and id is 1 raw text is: \ Congressional Budget Office Cost Estimate August 13, 2021 By Fiscal Year Millions of Dollars 2021 2021- 20 21 2031 Direct Spending (Outlays) 0 3 9 Revenues Increase or Decrease (-) in the Deficit 0 0 0 3 0 9 The Department of Veterans Affairs (VA) provides guarantees to lenders for eligible borrowers to obtain better loan terms-such as lower interest rates or smaller down payments-when purchasing, constructing, or refinancing a home. VA typically pays lenders up to 25 percent of the outstanding mortgage balance if a borrower's home is foreclosed upon. Such payments, net of fees and recoveries, comprise the subsidy cost for VA loan guarantees, which is paid from mandatory appropriations; hence, changing the subsidy cost affects direct spending.1 To obtain a loan guarantee from VA, lenders must determine that each applicant satisfies the department's underwriting standards, including verifying that their income will be sufficient to repay the mortgage. H.R. 4657 would permit lenders to consider expected cost savings documented in an energy efficiency report prepared for a home in determining the sufficiency of an applicant's income. The bill would first require VA to prescribe regulations concerning how the energy-efficiency reports are prepared and how lenders should consider savings from energy efficiency features when evaluating income. 1. Under the Federal Credit Reform Act of 1990, the subsidy cost of a loan guarantee is the net present value of estimated payments by the government to cover defaults and delinquencies, interest subsidies, or other expenses offset by any payments to the government, including origination or other fees, penalties, and recoveries on defaulted loans. Such subsidy costs are calculated by discounting those expected cash flows using the rate on Treasury securities of comparable maturity. The resulting estimated subsidy costs are recorded in the budget when the loans are disbursed or modified. See also CBO's Cost Estimates Explained, www.cbo.gov/publication/54437; How CBO Prepares Cost Estimates, www.cbo.gov/publication/53519; and Glossary, www.cbo.gov/publication/42904.

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