Detailed Information on the
Veterans Home Loans Assessment

Develop analyses of how results information from new measures are used and how this information impacts program performance.

Develop long-term performance measures focused on outcomes that meaningfully reflect the purpose of the program.

Develop capability to begin reporting on the new long-term performance measures focused on outcomes that meaningfully reflect the purpose of the program

Develop capability to report on mortgage delinquencies at a point earlier than current requirement of '105 days delinquent'.

Measure: Default Resolution Rate

Explanation:The Default Resolution Rate is Loan Guaranty Service's new Key Measure. It replaces the previous Key Measure, the Foreclosure Avoidance Through Servicing (FATS) ratio. The new measure gauges the effectiveness of the combined VA and private sector loan servicers' efforts to help veterans with VA-guaranteed loans avoid foreclosure and retain ownership of their homes. VALERI implementation is slated for completion by the end of calendar year 2008. In order to better assist veterans and capitalize on some of the servicing industry's best practices, VA underwent a complete business process redesign of how it conducts servicing of defaulted loans. This redesign effort included development of the VA Loan Electronic Reporting Interface (VALERI) system. With VALERI, servicing of delinquent VA-guaranteed loans is done in a more effective manner. With full implementation of the VALERI system, the FATS performance measure was replaced with the Default Resolution Rate. The Default Resolution Rate is calculated as follows: [Successful Repayment Plans + Successful Special Forbearances + Successful Loan Modifications + Refundings + Compromise Sales + Deeds-in-Lieu of Foreclosure] / [Successful Repayment Plans + Successful Special Forbearances + Successful Loan Modifications + Refundings + Compromise Sales + Deeds-in-Lieu of Foreclosure + Foreclosures]. Results are collected on a monthly basis from the VA Loan Event Reporting Interface (VALERI) system. VA staff currently reviews foreclosure and default and other significant events in VALERI and comparing to other industry sources and surveys to ensure accuracy. VA will evaluate data from this measure for potential use as part of the determination of servicer tier rankings, and also to determine incentive payments to servicers who appropriately service of VA-guaranteed loans.

Measure: Default Resolution Efficiency Ratio

Explanation:The Default Resolution Efficiency Ratio is Loan Guaranty Service's new Efficiency Measure. It replaces the previous Efficiency Measure, E-FATS. The new Default Resolution Efficiency Ratio is the ratio of dollars saved through successful loss mitigation options, to dollars spent by VA on Loan Administration. In order to better assist veterans and capitalize on some of the servicing industry's best practices, VA underwent a complete business process redesign of how it conducts servicing of defaulted loans. This redesign effort included development of the VA Loan Electronic Reporting Interface (VALERI) system. With VALERI, servicing of delinquent VA-guaranteed loans is done in a more effective manner. With full implementation of the VALERI system, the old E-FATS performance measure was replaced with the Default Resolution Efficiency Ratio. The transition of loan servicers to the VALERI system is slated for completion by the end of CY 2008. This measure will be base lined in FY 2009 and results reporting will begin in FY 2010. FY 2009 data will be used in developing appropriate targets for this measure. The new Default Resolution Efficiency Measure is calculated as follows: [Dollars saved in claims avoidance through the employ of successful loss mitigation options] / [Dollars spent by VA on Loan Administration]. VA will evaluate data from this measure for potential use as part of the determination of servicer tier rankings, and also to determine incentive payments to servicers who appropriately service of VA-guaranteed loans.

Measure: Veteran Satisfaction with the Housing Program

Explanation:Data has a one year lagtime due to survey administration and reporting procedures. "Actual" data for any FY represents the numbers collected during the previous FY. Data represents the percent of veterans who report they are Very or Somewhat Satisfied with the process of obtaining a VA Home Loan

Measure: Accuracy of Loan Guaranty Activities (Statistical Quality Index)

Explanation:Evaluates the quality of services performed by Housing field stations. Calculated by conducting 2-tiered review of a sample of loan files; review conducted in light of published guidelines.

Is the program purpose clear?

Explanation: The program's purpose is to issue home loan guarantees to veterans, active-duty servicemembers, and reservists so that they will receive reasonable loan terms and a zero down payment option. The Housing program's purpose was originally established under the 1944 Servicemen's Readjustment Act (GI Bill) as a one-time transition benefit for veterans. However, the program and its scope of intent and purpose were modified by 60 years of legislation. These legislative modifications have lead to multiple, broad missions; such as, transitional assistance, personal interest, and economic stimulus. Thus, it is difficult to target the program and create adequate performance measures. As a result, the 2005 President's Budget proposes to move the program towards its original intent (i.e. transition benefit) by limiting the program to one-time use after leaving active duty. It would not change the active duty benefit. FHA loans are available for veterans and offer similar terms, including a proposed zero down payment option.

Evidence: The 1944 Servicememen's Readjustment Act can be found at P.L. 78-346, June 22, 1944. Applicable committee reports include: United States House of Representatives, Report No. 1418, 78th Congress, 2nd Session, May 5, 1944, p.2; United States Senate, Veterans' Housing Act of 1974, 93rd Congress, 2nd Session, Report No. 93-1334, December 11, 1974. p.9; United States Senate, Veterans Housing Amendments Act of 1976, 94th Congress, 2nd Session, Report No. 94-806, May 11, 1976, pp.9-10. Applicable regulations for the Housing Program are located at 38 USC chapter 37 and in 38 CFR part 36, but do not include a program purpose. The program purpose is also defined in the independent program evaluation conducted by Economic Systems Inc. (ESI ) Appendix C, Legislative History and Intent; ESI Legislative Intent Summary Document; Department of Veterans Affairs Performance and Accountability Report (2003) pp: 53,184; Department of Veterans Affairs FY2005 Congressional Justification; volume 1: pp 6.26-6.27. The program's internal mission is posted at homeloans.va.gov/mission.htm.

Does the program address a specific and existing problem, interest or need?

Explanation: The major interest that VA's Housing program addresses is the desire of veterans, active-duty servicemembers, and reservists to acquire a zero down payment housing loan. Ninety-one percent of the program's participants take advantage of this loan feature. Given the proposal in the FY 2005 President's Budget for a zero down payment feature in FHA's single family loan program where there are similar terms and income-to-debt ratio requirements, if enacted there will be another Federal vehicle to meet veterans' needs. VA's program was originally enacted to alleviate the credit issues presented to servicemembers who could not establish credit while serving. However, given the ease by which Americans can now establish credit and decreased length of time a person serves overseas in combat (compared to WWII), the original problem addressed by the program has diminished significantly. Additionally, 14.6% of participants are active duty, who either have housing allowances or housing in-kind.

Evidence: Liquid Assets data is from Guaranteed Insured Loan (GIL) system. Additionally, relevant evidence includes: ESI's Appendix C, Legislative History and Intent and Profile of Participants.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The Housing program can be compared to the Department of Housing and Urban Development's (HUD) Federal Housing Administration (FHA) Single Family Housing program and other loan products in the conventional and local government markets. As an example, FHA has an identical income to debt ratio of 29:41. Additionally, the President's 2005 Budget includes proposal to offer a no-downpayment option within the FHA program. However, FHA currently offers certain veterans a no down payment option. Moreover, the conventional market loan products are comparable to the Housing program, with options such as no-downpayment programs, including Fannie Mae's no-downpyament program. Finally, several states offer veterans housing programs, such as CalVet, a California program, which offers homebuying assistance similar to the VA Housing program, to veterans who are state residents. Additional state programs are offered by the states of Wisconsin, Oregon, and Texas.

Evidence: FHA's income to debt ratio is located at www.hud.gov. Fannie Mae's zero downpayment program can be found at www.fanniemae.com. The CalVet website is located at www.cdva.ca.gov/calvet, which outlines the CalVet program. Other applicable evidence concerning state veterans housing programs are located at dva.state.wi.us/Ben_mortgageloans.asp; www.odva.state.or.us/homeloan.htm; and www.glo.state.tx.us/vlb/vhab/index.html, respectively. Cost comparisons between VA, FHA and Conventional products can be found in the Product Comparisons Report.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: As stated in the Annual Performance and Accountability Report, an overall goal of the VA is to "ease the reentry of new veterans into civilian life by increasing awareness of, access to, and use of VA benefits." Under this goal, the Housing program's defined objective is to "improve the ability of veterans to purchase and retain a home by meeting or exceeding lending industry standards for quality, timeliness, and foreclosure avoidance." This objective is not met due to structural issues within the program. As prescribed by statute, VA is not notified by the lender of a veteran's missed mortgage payments until 105 days following delinquency. Therefore, it is more difficult to intervene and help the veteran this late. Furthermore, the design of the program allows "upside down" loans (i.e. loans in excess of the appraised value). These types of loans can put a veteran at increased risk of default. In addition, the program could increase its efficiency if it partnered with other Federal programs, such as HUD's FHA Single Family Housing Program.

Evidence: Applicable evidence includes: the FY 2003 Annual Performance and Accountability Report - Objective 2.3; 38 USC chapter 37; VA's Transitional Housing Subsidy Model; and 38 USC § 2051.

Is the program effectively targeted, so that resources will reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: The program targets all veterans, active-duty service members, and reservists over their entire lifetime. This is a broad target and difficult to manage or measure effectiveness. However, only 10% of veterans use the benefit. VA only ensures that eligible recipients receive the benefit by requiring a Certificate of Eligibility (COE) which is issued after a case-by-case review. Additionally, the program is subsidizing loans for those who can get other loans elsewhere and the program is competing with other governmental programs and commercial lenders. Furthermore, 14.6% of participants are active duty, who either have housing allowances or housing in-kind.

Evidence: Applicable evidence includes: 38 USC § 3702; VA Manual 26-1 Guaranteed Loan Processing; Chapter 2, Federal Credit Reform Act (FCRA) of 1990: P.L. 101-508 accessible at: www.fms.treas.gov/ussgl/creditreform/fcratoc.html. Additional evidence includes: ESI's Report, Chapter 4, Profile of Participants.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The program has one outcome measure under development: "Percent of active duty personnel and veterans that could not have purchased a home without VA assistance." While this measure is important, additional measures are required to capture the broad program purpose and strategic goals.

Evidence: Applicable evidence includes: Department of Veterans Affairs FY2003 Congressional Justification, pp. 2A-7; Department of Veterans Affairs FY2005 Congressional Justification, Benefit Programs, volume 1: pp. 6.26-6.27; Economic Systems Inc. (ESI) VA Home Loan Guaranty Program Evaluation Report, Chapters 2, 7, 12: (2004); and Department of Veterans Affairs Strategic Plan 2003-2008, pg. 38.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The program's outcome measure is still under development and requires a baseline and out year targets.

Evidence: Performance targets are cited in Department of Veterans Affairs FY2005 Congressional Justification, Benefit Programs, volume 1: pp. 6.26-6.27; Department of Veterans Affairs Performance and Accountability Report (2003), pp. 53, 184; and in the Department of Veterans Affairs Strategic Plan 2003-2008, pg. 38.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The Housing program does have examples of annual performance measures, such as the Foreclosure Avoidance Through Servicing (FATS), though the program lacks outcome measures that link to such performance measures. Additionally, the program does not have an efficiency measure.

Evidence: Performance measures are cited in the Department of Veterans Affairs FY2005 Congressional Justification, Benefit Programs, volume 1. pp. 6.26-6.30; in the Department of Veterans Affairs Performance and Accountability Report (2003), pp. 53, 184; and in the Loan Guaranty Balanced Scorecard.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: VA has not established baselines and ambitious targets for its annual measures. Many of the program's targets are under development and those that exist are not ambitious. For example, the FATS Ratio target for 2004 is 45% when the actual for 2003 was 44.5%. Furthermore, VA has achieved a 97% accuracy rate for the last few years and maintains that rate for its annual goals.

Evidence: Performance measures are cited in the Department of Veterans Affairs FY2005 Congressional Justification, Benefit Programs, volume 1. pp. 6.26-6.30; in the Department of Veterans Affairs Performance and Accountability Report (2003), pp. 53, 184, and in the Loan Guaranty Balanced Scorecard.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The program does not have sufficient long-term and annual goals. Thus, the program partners can not commit to working towards them.

Evidence: Applicable evidence includes: VA Handbook H26-94-1 VA Servicer's Guide; VA Pamphlet 26-7 VA Lender's Handbook; VA Manual 26-2 Construction and Valuation Policies, Requirements, Methods, and Procedures Manual; VA Loan Guaranty Service Monitoring Unit Operating Guide; PM Administrator Contract PO #101-Y37203; 08/27/2003; and Portfolio Loan Servicer Contract PO#101-Y17042; 11/14/2000.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: An evaluation of the Housing program was conducted by an independent contractor with a final report issued in July 2004. However, this is the first independent evaluation of wide scope and no future evaluations are planned. In addition, the evaluation was not sufficiently rigorous in its examination of the program's effectiveness. For example, the evaluation did not make a recommendation on the Adjustable Rate Mortgage option, as tasked in the Statement of Work. Furthermore, the report contains several inaccuracies.

Evidence: The scope of the ESI program evaluation is included in the contract Statement of Work; Field station survey reports; and Economic Systems Inc. (ESI) VA Home Loan Guaranty Program Evaluation Report (2004). VAOIG reports are accessible on the internet at www.va.gov/oig. The most recent OIG audit report touching on the Housing program is titled Combined Assessment Program review report, VA Regional Office Houston TX [03-02725-93] Deloitte and Touche Independent Auditor's Report November 2003. Additional resources include: Loan Guaranty Management and Accountability and Control Remediation Plan and Supporting Materials: Balance at Maturity Issue (2003) and Results of the Lender and Veteran Customer Satisfaction Surveys are available on the web at www.vbaw.vba.va.gov.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The relationship between VA's budget requests for the Housing program and whether such requests will impact the achievement of targeted goals is not clear.

Evidence: VA's 2005 Budget does not tie the budget request to improvements in performance.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The program has only a few measures that have a baseline, annual goals, and a strategic target. The final program evaluation report will make recommendations on how to revise current measures, or devise new more appropriate ones. However, VA does not plan to develop a more comprehensive long-term planning process until 2007.

Evidence: Applicable evidence includes: Economic Systems Inc. (ESI) VA Home Loan Guaranty Program Evaluation Report, Chapters 2, 12: (2004) and the VBA planning process document.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: VA needs to collect current loan performance information to effectively and consistently manage their portfolios. Currently, VA does not know whether a veteran has failed to make the mortgage payments until 105 days after a delinquent payment. Additionally, unlike other programs which are discretionary, there is a lack of incentive in this program because it is mandatory, to manage the program. As an example, in the Native American program, managers did not monitor the loans issued and exceeded the legal limit.

Evidence: Applicable evidence includes: Sample data collected on Lender performance: GPADS report from GINNIE MAE. VA Credit Standards are codified in Regulations and published in the Lenders Handbook, VA Pamphlet 26-7. Audit procedures are described in VA Loan Guaranty Service Monitoring Unit Operating Guide. FATS data available on Balanced Scorecard at http://vbaausdsf1.vba.va.gov. Additional evidence includes: Portfolio Loan Servicer Contract PO # 101-Y17042; 11/14/2000 PM Administrator Contract PO #101-Y37203; 08/27/2003. The relevant regulation pertaining to delinquency can be found at 38 CFR 36.4315.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Many of the Housing program's performance measures are under development and therefore, program partners can not be held accountable. Moreover, program managers were not held accountable for exceeding the legal limit in the Native American Loan program in 2003.

Evidence: VA Credit Standards are codified in Regulations and published in the Lenders Handbook, VA Pamphlet 26-7. Audit procedures are described in VA Loan Guaranty Service Monitoring Unit Operating Guide. Additional evidence includes: Portfolio Loan Servicer Contract PO # 101-Y17042, 11/14/2000; Property Management Administrator Contract PO #101-Y37203, 08/27/2003. Financial Quality Assurance Service, Financial Management Review, Native American Direct Loan Program, October 27, 2003 stated that the Anti-deficiency Act violation in the Native American Loan program was the fault of the subsidy model and the budget personnel. It further stated that OMB and VA were working together to eliminate the possibility of a negative subsidy in the future, which is untrue and conflicts with the Federal Credit Reform Act. The report did not hold the program managers responsible for not monitoring the loan activity nor exceeding the legal loan limit.

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: This question must receive a NO because the Native American Loan program had an Anti-Deficiency Act violation in 2003.

Evidence: VA Credit Standards are codified in Regulations and published in the Lenders Handbook, VA Pamphlet 26-7. Audit procedures are described in VA Loan Guaranty Service Monitoring Unit Operating Guide. Additional evidence includes: Regional Office Director's Performance Appraisal Plan (2004); Loan Guaranty Service Director's Performance Standards and Appraisal Plan (2004); Portfolio Loan Servicer Contract PO # 101-Y17042, 11/14/2000; and the Property Management Administrator Contract PO #101-Y37203, 08/27/2003

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: VA uses various procedures to achieve efficient cost-effective program execution, including implementation of management study recommendations. The recently conducted Property Management (PM) A-76 Study concluded that the program would achieve greater efficiencies through contracting out the property management function, and subsequently, a private-sector firm was awarded the contract. Additional IT-related efficiencies are achieved through participation with the Department of Treasury on the Funding Fee Payment System (FFPS), and with Department of Education, the Small Business Administration, the Department of Housing and Urban Development, and the Department of Agriculture on the e-Gov initiative. The Automated Certificate of Eligibility (ACE) system also provides increased efficiency and effectiveness by improving timeliness of eligibility data and determinations, and providing cost-savings. However, the program needs to continue development of cost efficiency measures.

Evidence: Relevant evidence includes: Automated Certificate of Eligibility (ACE) Milestone IV: Post Implementation Review Report; VA Circular 26-02-6 VA Funding Fee Payment System (FFPS) (2002); Property Management A-76 Cost Comparison; Property Management Administrator Contract PO #101-Y37203; 08/27/2003; Loan Guaranty Balanced Scorecard and Loan Guaranty Balanced Scorecard Handbook; Department of Veterans Affairs Performance and Accountability Report (2003), pp. 53, 184; and OMB Exhibit 300 Loans Capital Asset Plan and Business Case.

Does the program collaborate and coordinate effectively with related programs?

Explanation: While VA collaborates with many entities, there is no evidence that the collaboration has led to meaningful actions in management and resource allocation. For example, the Housing Consortium disbanded before a federal data warehouse was created. In addition, the Departments of Housing and Urban Development and Agriculture have similar programs and could have a joint property management contract or implement "best practices."

Evidence: Relevant evidence includes: OMB Exhibit 300 eLoans Capital Asset Plan and Business Case; Economic Systems Inc. (ESI) VA Home Loan Guaranty Program Evaluation Report, Chapter 8, (2004); Department of Veterans Affairs FY2005 Congressional Justification, Benefit Programs, volume 1; Template for Memorandum of Understanding Between The U.S. Department of Veterans Affairs and a Native American Nation, available at www.homeloans.va.gov.

Does the program use strong financial management practices?

Explanation: Although strong financial management practices have resulted in an unqualified (clean) financial audit opinion on its Consolidated Financial Statements for the last five years, two material weaknesses require long-term corrective action. The audit cited deficiencies which were classified under VA 'Information Technology Security Controls' and under 'Integrated Financial Management System'.

Evidence: The credit programs are audited every fiscal year as part of the Financial Statement Audit and the Housing program continues to receive an unqualified (clean) audit opinion: Deloitte and Touche Independent Auditor's Report November 2003.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The Loan Guaranty Quality Control system conducts annual on-site management audits of all Regional Loan Centers, and monthly SQC reviews of work products. Each audit report details corrective actions required, and stations must provide acceptable remediation plans, which are verified in subsequent site visits. VA also conducts regular Internal Control Reviews to identify vulnerability to waste, fraud, and abuse. The most recent study, System Security Plan and Risk Assessment of Loan Guaranty Computer Systems by Bearing Point, has identified security vulnerabilities in certain IT systems, and actions are being initiated to remedy these.

Evidence: The Loan Guaranty Quality Control program is described in detail in VA Manual M26-9, available at www.warms.vba.va.gov. Internal Control Reviews mandated by VBA Circular 20-87-1. Additional evidence includes: Report by Bearing Point: Veterans Information Portal, VIP/ITC Discovery Report.

Is the program managed on an ongoing basis to assure credit quality remains sound, collections and disbursements are timely, and reporting requirements are fulfilled?

Explanation: The Housing program does not maximize collections and recoveries. This is due to the current process by which VA is notified of delinquency, which does not occur until 105 days after the late payment. Additionally, legislation passed in December 1989 (P.L. 101-237) restricts VA from establishing a debt for foreclosure against a veteran unless malfeasance is involved.

Evidence: The credit programs are audited every fiscal year as part of the Financial Statement Audit. The audit process includes substantive testing of the programs financial reporting and no material problems have been reported. VA Lenders Handbook (VA Pamphlet 26-7) available at www.homeloans.va.gov.

Do the program's credit models adequately provide reliable, consistent, accurate and transparent estimates of costs and the risk to the Government?

Explanation: Over the past couple of years, VA has made significant progress in updating and improving all of the credit models. These models more accurately project cash flows and simplify the process for users and auditors. The method of computing default projections for the guaranteed loan program was recently updated to link to current economic conditions. That update resulted in significant downward re-estimates, but will improve future subsidy estimates by stabilizing cash flows computed by the model and thereby reducing future re-estimates. The model uses actual historical data entered during every re-estimate cycle which results in projections made within the model being based on the most recent data available. Additionally, the models for vendee and acquired loans are under development to better reflect trends.

Evidence: The credit programs are audited every fiscal year as part of the Financial Statement Audit. The audit process includes a through review of the models by the auditors and VA's Actuarial Staff. No problems have been reported: Deloitte and Touche Independent Auditors' Report on Internal Control Over Financial Reporting (11/11/2003).

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The program only has one outcome measure and it is still under development. VA needs to develop this measure and a couple more outcome measures with baselines, annual targets, and a strategic targets.

Evidence: Relevant evidence includes: the Loan Guaranty Balanced Scorecard and Loan Guaranty Balanced Scorecard Handbook; the Monthly Performance Report; Department of Veterans Affairs Strategic Plan 2003-2008, pg. 38; Department of Veterans Affairs FY2005 Congressional Justification, Benefit Programs, volume 1, pp. 6.26-6.30; Department of Veterans Affairs Performance and Accountability Report (2003), pp. 53, 184, Performance Measures Tables.

Does the program (including program partners) achieve its annual performance goals?

Explanation: The program only has a few measures that have a baseline, annual goals, and a strategic target. VA is currently in the process of developing more measures; however, VA does not expect to implement them until 2007.

Evidence: Relevant evidence includes: the Loan Guaranty Balanced Scorecard and Loan Guaranty Balanced Scorecard Handbook; the Monthly Performance Report; Department of Veterans Affairs Strategic Plan 2003-2008, pg. 38; Department of Veterans Affairs FY2005 Congressional Justification, Benefit Programs, volume 1, pp 6.26-6.30; and the Department of Veterans Affairs Performance and Accountability Report (2003), pp. 53, 184, Performance Measures Tables.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: VA recently completed an A-76 study of the Property Management operation. The study determined that increased efficiency and cost effectiveness would be achieved by contracting the operation out. VA estimates net savings of $14M over the course of the 4 ?? year contract. Since FY95, Loan Guaranty has consistently decreased field staffing levels while overall loan volume has remained steady, and often has increased. Nevertheless, quality and performance have not been negatively impacted. The program has achieved performance goals - FATS, Statistical Quality Index and Veteran Customer Satisfaction. FY03 figures for those goals are 44.9%, 97% and 95% respectively. However, VA needs to continue development of its cost efficiency measures.

Evidence: Relevant evidence includes: Property Management A-76 Cost Comparison and the Field FTE and Loan Volume graph.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: The Housing program is comparable to HUD's FHA Single Family Housing program and other loan products in the conventional and local government markets. FHA and VA have identical income to debt ratios and under the 2005 President's Budget, the FHA Single Family Housing Program includes a no-downpayment requirement. A thorough comparison has not been done through an independent evaluation; however, default and recovery rates compare favorably to FHA's single family program.

Evidence: Applicable evidence includes: Economic Systems Inc. (ESI) VA Home Loan Guaranty Program Evaluation Report (2004).

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: An evaluation of the Housing program was conducted by an independent contractor with a final report issued in July 2004. However, the evaluation did not provide a rigorous analysis of the program's effectiveness. For example, it did not identify areas of improvement, such as the electronic transfer of data from lenders to VA in order to improve foreclosure avoidance.

Evidence: Applicable evidence includes: Economic Systems Inc. (ESI) VA Home Loan Guaranty Program Evaluation Report (2004) and the Executive Summary, VA Loan Guaranty Veteran Customer Satisfaction Survey, (FY2003).