A bill to amend title 38, United States Code, to make permanent the authority of the Secretary of Veterans Affairs to guarantee adjustable rate mortgages, to authorize the guarantee of hybrid adjustable rate mortgages, and for other purposes.

Authorizes the Secretary of Veterans Affairs to guarantee adjustable rate mortgages for veterans eligible for housing loan benefits through the Department of Veterans Affairs (replaces provisions that directed the Secretary to carry out a demonstration project to guaranty loans in a manner similar to the manner in which the Secretary of Housing and Urban Development insured adjustable rate mortgages under the National Housing Act). Includes within such guaranteed mortgages hybrid adjustable rate mortgages (mortgages whose interest rates are adjusted after as few as three years) which do not correspond to a specified national interest rate index approved by the Secretary.