The House voted last week to extend government guarantees of home mortgages to more than a million members of the military reserves and the National Guard, including thousands who never served on active duty, but the measure faces a cool reception in the Senate and opposition from the Bush administration.

Mortgage fees paid by reservists would provide a much-needed infusion of cash for the Department of Veterans Affairs' home loan guaranty fund and the change would recognize the larger role reservists now play in U.S. defense, supporters say. Real estate industry groups also are pushing for the change.

The Senate is not considering any similar legislation, however, because of concern "about the impact on the solvency of the revolving fund that supports VA's loan guaranty program," Sen. Alan Cranston (D-Calif.), chairman of the Committee on Veterans' Affairs, said in a statement. The fund has had heavy losses in recent years, requiring $2.2 billion in congressional appropriations since 1984 to keep it solvent.

Sen. Frank Murkowski (R-Alaska) opposes a change.

"The situation with the VA home loan program is almost as serious as the S&L problem and it's disguised because it's a government program," Murkowski said. "We have had to go in each year with special appropriations to meet the deficit."

"My interest ... is to honestly look at a program that needs restructuring," he said, adding that it would be irresponsible for the real estate industry to back expansion of the program without supporting its restructuring.

Bush administration officials said a law passed is November already has produced changes intended to stem losses from the loan fund and should be given a chance to work before the rules are changed again.

The measure, a major restructuring of the VA loan program, requires veterans to pay fees of up to 1.25 percent on loans. The money goes into a mortgage indemnity fund to reimburse the VA for paying off loans when veterans default.

The loan fund, which has helped 13.1 million veterans buy homes since its beginning in 1944, has been losing money for several years. Economic downturns, particularly in the western and southwest regions of the country, have been a major factor in thousands of defaults by veterans.

Loan fees paid by reservists would bring in about $36 million during the first four years, according to Congressional Budget Office estimates. But after four years of making money for the VA, the new program would then begin to cost the government money as some reservists start defaulting on loans, the CBO said. Losses in the fifth year would be about $1 million, according to the estimates.

The CBO said about 7,700 reserve members could be expected to take out VA-guaranteed mortgages each year.

If the House proposal becomes law, reservists with six years of service, who make up an estimated 60 percent of the reserve forces, would be eligible for VA loan guarantees and would pay higher fees than veterans are charged.

Reserve members would have to pay 2 percent of the mortgage amount when they buy a home, compared with the 1.25 percent veterans must pay.

These are the costs for vets who don't make down payments, and the fees would go down for borrowers who put down 5 percent or 10 percent.

A report by the House Veterans' Affairs Committee predicted that reservists will be better credit risks because they are "generally an older, more mature and more stable group with longtime civilian job histories" and may already have owned a home.

"Therefore this group may help to financially stabilize the program through an influx of loan fees with fewer claims to be paid on their behalf," according to the report.

More than 1.5 million Americans now are members of reserve units or the National Guard, and about 2 million are on active duty.

Giving reservists access to the loan guaranty program "is needed ... to recognize their changing role ... in the United States military defense," the report said.

The VA guarantee covers 50 percent of a mortgage of $45,000 or less. For loans of more than $45,000 the VA guarantees 40 percent of the total or $36,000, whichever is less.

Veterans' organizations support the legislation.

"We're favorably disposed to it because reserve components are an integral part of the armed forces," said Richard W. Johnson Jr., legislative director of the Non-Commissioned Officers Association.

Johnson said many reservists were among units taking part in U.S. military actions in Panama, Grenada and the Persian Gulf in the past decade.

Alan Schneider, deputy director of the VA loan fund, said "giving reservists and the guard loan benefits strays from the original purpose of the program {which was} as a readjustment benefit for veterans returning from active duty."

The loans were intended to compensate veterans for their inability to save money while they were away, said Schneider.

The mortgage guaranty is not the first benefit broadened to include reservists. In 1984, Congress voted to extend VA education benefits to some reservists.