To amend title 38, United States Code, to provide mortgage payment assistance to avoid foreclosure of home loans guaranteed under title 38, and for other purposes.

Authorizes the Secretary of Veterans Affairs to provide assistance to a veteran to avoid foreclosure of a housing loan made and guaranteed by the Secretary through the Department of Veterans Affairs. Requires such assistance to be in the form of a loan. Outlines loan conditions, including that: (1) the dwelling that secures the primary loan is the current residence of the veteran; (2) the veteran is at least six months delinquent in mortgage payments; (3) the veteran has lost employment or suffered a substantial reduction in household income; and (4) there is a reasonable prospect that the veteran will be able to resume payment on the mortgage loan within six months after receiving such assistance.

Authorizes the Secretary to make more than one loan to a veteran, with a per-veteran loan limitation of $10,000. Requires the veteran to execute an agreement with the Secretary to repay the loan within a reasonable period not to exceed 15 years.

Frees the veteran from the payment of discount points for such loan.

Revises the method of interest rate adjustment on mortgage loans guaranteed by the Secretary in a FY 1993 through 1995 demonstration project for guaranteeing loans in a manner similar to the manner in which the Secretary of Housing and Urban Development insures adjustable rate mortgages under the National Housing Act.