Homeowners Assistance Program Improvement Act

Homeowners Assistance Program Improvement Act - Makes members of the armed forces involuntarily separated from active duty before October 1, 1995, eligible for homeowners assistance provided under the Demonstration Cities and Metropolitan Development Act of 1966 if such member: (1) is the owner-occupant of a dwelling on the date of separation or vacated such dwelling as a result of being ordered into on-post housing within six months before such date; (2) relocates beyond normal commuting distance of the owned dwelling within five years after such separation or is unemployed during all or part of such period and unable to meet mortgage payments and related expenses; and (3) applies for the assistance within the period established by the Secretary of Defense. Requires the member, in order to be eligible for such assistance, to offer the property for sale in the open market for at least six months at a price equal to the fair market value of the property. Requires the Secretary to use the fair market value of the property at the time of involuntary separation in determining the amount of assistance to be provided.

Amends Federal veterans' benefits provisions to automatically guarantee a loan made to a veteran who is involuntarly separated before October 1, 1995, for a down payment on the purchase or construction of a dwelling or farm residence. Places: (1) conditions on the guarantee of such loan, including restrictions setting a specified ceiling on the interest rate of such loan, requiring the loan to be secured by the dwelling or farm residence; and (2) limits on the extension of such loan. Authorizes identical loan guaranty entitlement to involuntarily separated veterans receiving a loan to refinance an existing loan that was made for the purchase of, and was secured by, a manufactured home and to purchase the lot on which the home is placed.

Authorizes the Secretary of Veterans Affairs, in the case of either type of loan guarantee, to provide a preliminary loan guaranty certificate or other evidence of guaranty up to 60 days before settlement, and to extend such guaranty in 60-day increments such that the total period covered by such guaranty does not exceed one year.