38 U.S.C. § 3707: Adjustable rate mortgages

The Secretary shall carry out a project under this section for the purpose of guaranteeing loans in a manner similar to the manner in which the Secretary of Housing and Urban Development insures adjustable rate mortgages under section 251 of the National Housing Act. correspond to a specified national interest rate index approved by the Secretary, information on which is readily accessible to mortgagors from generally available published sources; be made by adjusting the monthly payment on an annual basis; be limited, with respect to any single annual interest rate adjustment, to a maximum increase or decrease of 1 percentage point; and be limited, over the term of the mortgage, to a maximum increase of 5 percentage points above the initial contract interest rate. the status of the interest rate index referred to in subsection (b)(1) and available at the time an underwriting decision is made, regardless of the actual initial rate offered by the lender; the maximum and likely amounts of increases in mortgage payments that the loans would require; the underwriting standards applicable to adjustable rate mortgages insured under title II of the National Housing Act; and such other factors as the Secretary finds appropriate. The Secretary shall require that the mortgagee make available to the mortgagor, at the time of loan application, a written explanation of the features of the adjustable rate mortgage, including a hypothetical payment schedule that displays the maximum potential increases in monthly payments to the mortgagor over the first five years of the mortgage term. the refinancing of fixed-rate mortgage loans to adjustable rate mortgage loans; whether veterans are informed of the risks and disclosures associated with that refinancing; and whether advertising materials for that refinancing are clear and do not contain misleading statements or assertions; and includes findings based on any complaints received by veterans and on an ongoing assessment of the refinancing market by the Secretary.”