[USC10] 38 USC Ch. 37: HOUSING AND SMALL BUSINESS LOANS
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38 USC Ch. 37: HOUSING AND SMALL BUSINESS LOANS
From Title 38—VETERANS' BENEFITSPART III—READJUSTMENT AND RELATED BENEFITS

CHAPTER 37—HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER I—GENERAL

Sec.
3701.
Definitions.
3702.
Basic entitlement.
3703.
Basic provisions relating to loan guaranty and insurance.
3704.
Restrictions on loans.
3705.
Warranties.
3706.
Escrow of deposits and downpayments.
3707.
Adjustable rate mortgages.
3707A.
Hybrid adjustable rate mortgages.
3708.
Authority to buy down interest rates: pilot program.
3709.
Refinancing of housing loans.

        

SUBCHAPTER II—LOANS

3710.
Purchase or construction of homes.
3711.
Direct loans to veterans.
3712.
Loans to purchase manufactured homes and lots.
3713.
Release from liability under guaranty.
3714.
Assumptions; release from liability.

        

SUBCHAPTER III—ADMINISTRATIVE PROVISIONS

3720.
Powers of Secretary.
3721.
Incontestability.
3722.
Veterans Housing Benefit Program Fund.
[3723 to 3725. Repealed.]
3726.
Withholding of payments, benefits, etc.
3727.
Expenditures to correct or compensate for structural defects in mortgaged homes.
3728.
Exemption from State anti-usury provisions.
3729.
Loan fee.
3730.
Use of attorneys in court.
3731.
Appraisals.
3732.
Procedure on default.
3733.
Property management.
3734.
Annual submission of information on the Veterans Housing Benefit Program Fund and housing programs.
[3735.
Renumbered.]
3736.
Reporting requirements.

        

SUBCHAPTER IV—SMALL BUSINESS LOANS

3741.
Definitions.
3742.
Small business loan program.
3743.
Liability on loans.
3744.
Approval of loans by the Secretary.
3745.
Interest on loans.
3746.
Maturity of loans.
3747.
Eligible financial institutions.
3748.
Preference for disabled veterans.
3749.
Revolving fund.
3750.
Incorporation of other provisions by the Secretary.
3751.
Termination of program.

        

SUBCHAPTER V—DIRECT HOUSING LOANS FOR NATIVE AMERICAN VETERANS

3761.
Direct housing loans to Native American veterans; program authority.
3762.
Direct housing loans to Native American veterans; program administration.
3763.
Native American Veteran Housing Loan Program Account.
3764.
Qualified non-Native American veterans.
3765.
Definitions.

        

[SUBCHAPTER VI—TRANSFERRED]

[3771 to 3775. Repealed or renumbered.]

        

Amendments

2018Pub. L. 115–174, title III, §309(a)(4), May 24, 2018, 132 Stat. 1350, added item 3709.

2006Pub. L. 109–233, title I, §§103(f)(4), 104(c), June 15, 2006, 120 Stat. 401, 402, substituted "DIRECT HOUSING LOANS FOR NATIVE AMERICAN VETERANS" for "NATIVE AMERICAN VETERAN HOUSING LOAN PILOT PROGRAM" in item for subchapter V, "Direct housing loans to Native American veterans; program authority" for "Pilot program" in item 3761, "Direct housing loans to Native American veterans; program administration" for "Direct housing loans to Native American veterans" in item 3762, and "Qualified non-Native American veterans" for "Definitions" in item 3764 and added item 3765.

2002Pub. L. 107–330, title III, §303(b), Dec. 6, 2002, 116 Stat. 2826, added item 3707A.

2001Pub. L. 107–95, §5(g)(2), Dec. 21, 2001, 115 Stat. 918, struck out item 3735 "Housing assistance for homeless veterans", item for subchapter VI "LOAN GUARANTEE FOR MULTIFAMILY TRANSITIONAL HOUSING FOR HOMELESS VETERANS", and items 3771 "Definitions", 3772 "General authority", 3773 "Requirements", 3774 "Default", and 3775 "Audit".

1998Pub. L. 105–368, title VI, §§601(b), 602(e)(3)(C), Nov. 11, 1998, 112 Stat. 3345, 3347, added item 3722, struck out items 3723 "Direct loan revolving fund", 3724 "Loan Guaranty Revolving Fund", and 3725 "Guaranty and Indemnity Fund", substituted "Veterans Housing Benefit Program Fund and housing programs" for "Loan Guaranty Revolving Fund and the Guaranty and Indemnity Fund" in item 3734, substituted "Native American Veteran Housing Loan Program Account" for "Housing loan program account" in item 3763, and added item for subchapter VI and items 3771 to 3775.

1996Pub. L. 104–110, title II, §201(a)(2), Feb. 13, 1996, 110 Stat. 770, added item 3736.

Pub. L. 104–106, div. B, title XXVIII, §2822(b)(2), Feb. 10, 1996, 110 Stat. 557, added item 3708.

1992Pub. L. 102–547, §§3(a)(2), 8(c), Oct. 28, 1992, 106 Stat. 3635, 3640, added item 3707, item for subchapter V, and items 3761 to 3764.

1991Pub. L. 102–83, §5(b)(1), Aug. 6, 1991, 105 Stat. 406, renumbered items 1801 to 1851 as 3701 to 3751, respectively.

Pub. L. 102–54, §9(b), June 13, 1991, 105 Stat. 273, added item 1835.

1989Pub. L. 101–237, title III, §§302(a)(3)(B), (b)(2), 313(b)(1), Dec. 18, 1989, 103 Stat. 2070, 2071, 2077, substituted "Secretary" for "Administrator" in items 1820, 1844, and 1850, "Loan Guaranty Revolving Fund" for "Loan guaranty revolving fund" in item 1824, and "Guaranty and Indemnity Fund" for "Waiver of discharge requirements for hospitalized persons" in item 1825, and added item 1834.

1988Pub. L. 100–322, title IV, §415(e), May 20, 1988, 102 Stat. 552, in item 1803 substituted "guaranty and insurance" for "guaranty", struck out item 1807 "Service after July 25, 1947, and prior to June 27, 1950", reenacted items 1810 and 1811 without change, redesignated item 1819 "Loans to purchase manufactured homes and lots" as item 1812, item 1817 "Release from liability under guaranty" as item 1813, and item 1817A "Assumptions; release from liability" as item 1814, struck out item 1815 "Insurance of loans" and item 1818 "Service after January 31, 1955, and prior to August 5, 1964, or after May 7, 1975", redesignated item 1816 "Procedure on default" as item 1832, struck out former item 1832 "Furnishing information to real estate professionals to facilitate the disposition of properties", and added item 1833.

1987Pub. L. 100–198, §10(a)(3), Dec. 21, 1987, 101 Stat. 1323, added item 1817A.

1986Pub. L. 99–576, title IV, §§407(b), 408(b), Oct. 28, 1986, 100 Stat. 3283, added items 1831 and 1832.

1984Pub. L. 98–369, div. B, title V, §2512(b)(2), July 18, 1984, 98 Stat. 1120, added item 1830.

1982Pub. L. 97–306, title IV, §406(c)(3), Oct. 14, 1982, 96 Stat. 1445, substituted "Loans to purchase manufactured homes and lots" for "Loans to purchase mobile homes and mobile home lots" in item 1819.

Pub. L. 97–253, title IV, §406(a)(2), Sept. 8, 1982, 96 Stat. 805, added item 1829.

1981Pub. L. 97–72, title III, §302(b)(1), (3), Nov. 3, 1981, 95 Stat. 1059, substituted "HOUSING AND SMALL BUSINESS LOANS" for "HOME, CONDOMINIUM, AND MOBILE HOME LOANS" in chapter heading and, in analysis of subchapters and sections, added item for subchapter IV and for sections 1841 to 1851.

1979Pub. L. 96–128, title IV, §401(b), Nov. 28, 1979, 93 Stat. 987, added item 1828.

1978Pub. L. 95–476, title I, §106(b), Oct. 18, 1978, 92 Stat. 1500, substituted "Service after January 31, 1955, and prior to August 5, 1964, or after May 7, 1975" for "Veterans who serve after January 31, 1955" in item 1818.

1976Pub. L. 94–324, §2(b), June 30, 1976, 90 Stat. 720, added item 1807.

1974Pub. L. 93–569, §§7(b), (c), Dec. 31, 1974, 88 Stat. 1866, substituted "HOME, CONDOMINIUM, AND MOBILE HOME LOANS" for "HOME, FARM, AND BUSINESS LOANS" in chapter heading, and struck out items 1812 "Purchase of farms and farm equipment", 1813 "Purchase of business property", 1814 "Loans to refinance delinquent indebtedness", and 1822 "Recovery of damages", from chapter analysis.

1970Pub. L. 91–506, §7, Oct. 23, 1970, 84 Stat. 1114, added item 1819.

1968Pub. L. 90–301, §5(b), May 7, 1968, 82 Stat. 116, added item 1827.

1966Pub. L. 89–358, §5(b), (f)(2), Mar. 3, 1966, 80 Stat. 26, 27, added items 1818 and 1826.

1960Pub. L. 86–665, §§6(b), 7(b), July 14, 1960, 74 Stat. 532, 533, added items 1806 and 1824 and renumbered former item 1824 as 1825.

Maximum Interest Rates for Mortgage Insurance Program

Consultation of Secretary of Housing and Urban Development with Administrator of Veterans' Affairs regarding interest rate considered necessary to meet mortgage market for guaranteed or insured home loans to veterans under this chapter, in determining rate for mortgage insurance program under section 1709(b)(5) of Title 12, see section 1709–1 of Title 12, Banks and Banking.

State Constitutional and Legal Limits Upon Interest Chargeable on Loan or Mortgage

Any loan or mortgage secured by a one- to four-family dwelling and insured, guaranteed, or made under this chapter not to be covered by any State constitutional and legal limit upon amount of interest charged, taken, etc., see section 1709–1a of Title 12, Banks and Banking.

SUBCHAPTER I—GENERAL

§3701. Definitions

(a) For the purpose of this chapter, the term "housing loan" means a loan for any of the purposes specified by sections 3710(a) and 3712(a)(1) of this title.

(b) For the purposes of housing loans under this chapter—

(1) The term "World War II" (A) means the period beginning on September 16, 1940, and ending on July 25, 1947, and (B) includes, in the case of any veteran who enlisted or reenlisted in a Regular component of the Armed Forces after October 6, 1945, and before October 7, 1946, the period of the first such enlistment or reenlistment.

(2) The term "veteran" includes the surviving spouse of any veteran (including a person who died in the active military, naval, or air service) who died from a service-connected disability, but only if such surviving spouse is not eligible for benefits under this chapter on the basis of the spouse's own active duty. The active duty or service in the Selected Reserve of the deceased spouse shall be deemed to have been active duty or service in the Selected Reserve by such surviving spouse for the purposes of this chapter.

(3) The term "veteran" also includes, for purposes of home loans, the spouse of any member of the Armed Forces serving on active duty who is listed, pursuant to section 556 of title 37, United States Code, and regulations issued thereunder, by the Secretary concerned in one or more of the following categories and has been so listed for a total of more than ninety days: (A) missing in action, (B) captured in line of duty by a hostile force, or (C) forcibly detained or interned in line of duty by a foreign government or power. The active duty of the member shall be deemed to have been active duty by such spouse for the purposes of this chapter. The loan eligibility of such spouse under this paragraph shall be limited to one loan guaranteed or made for the acquisition of a home, and entitlement to such loan shall terminate automatically, if not used, upon receipt by such spouse of official notice that the member is no longer listed in one of the categories specified in the first sentence of this paragraph.

(4) The term "veteran" also includes an individual serving on active duty.

(5)(A) The term "veteran" also includes an individual who is not otherwise eligible for the benefits of this chapter and (i) who has completed a total service of at least 6 years in the Selected Reserve and, following the completion of such service, was discharged from service with an honorable discharge, was placed on the retired list, was transferred to the Standby Reserve or an element of the Ready Reserve other than the Selected Reserve after service in the Selected Reserve characterized by the Secretary concerned as honorable service, or continues serving in the Selected Reserve, or (ii) who was discharged or released from the Selected Reserve before completing 6 years of service because of a service-connected disability.

(B) The term "Selected Reserve" means the Selected Reserve of the Ready Reserve of any of the reserve components (including the Army National Guard of the United States and the Air National Guard of the United States) of the Armed Forces, as required to be maintained under section 10143(a) of title 10.

(6) The term "veteran" also includes, for purposes of home loans, the surviving spouse of a veteran who died and who was in receipt of or entitled to receive (or but for the receipt of retired or retirement pay was entitled to receive) compensation at the time of death for a service-connected disability rated totally disabling if—

(A) the disability was continuously rated totally disabling for a period of 10 or more years immediately preceding death;

(B) the disability was continuously rated totally disabling for a period of not less than five years from the date of such veteran's discharge or other release from active duty; or

(C) the veteran was a former prisoner of war who died after September 30, 1999, and the disability was continuously rated totally disabling for a period of not less than one year immediately preceding death.


(c) Benefits shall not be afforded under this chapter to any individual on account of service as a commissioned officer of the National Oceanic and Atmospheric Administration (or predecessor entity), or of the Regular or Reserve Corps of the Public Health Service, unless such service would have qualified such individual for benefits under title III of the Servicemen's Readjustment Act of 1944.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1203, §1801; Pub. L. 91–584, §5(a), Dec. 24, 1970, 84 Stat. 1576; Pub. L. 94–324, §7(1), (2), June 30, 1976, 90 Stat. 721; Pub. L. 97–72, title III, §303(a), Nov. 3, 1981, 95 Stat. 1059; Pub. L. 97–295, §4(62), Oct. 12, 1982, 96 Stat. 1309; Pub. L. 100–322, title IV, §415(c)(1), May 20, 1988, 102 Stat. 551; Pub. L. 101–237, title III, §313(a), Dec. 18, 1989, 103 Stat. 2077; renumbered §3701 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 102–547, §2(a)(1), Oct. 28, 1992, 106 Stat. 3633; Pub. L. 103–446, title IX, §901, Nov. 2, 1994, 108 Stat. 4675; Pub. L. 104–106, div. A, title XV, §1501(e)(2)(B), Feb. 10, 1996, 110 Stat. 501; Pub. L. 112–154, title II, §206(a), Aug. 6, 2012, 126 Stat. 1178.)

References in Text

The Servicemen's Readjustment Act of 1944, referred to in subsec. (c), is act June 22, 1944, ch. 268, 58 Stat. 284, as amended. Title III of the Servicemen's Readjustment Act of 1944 was classified generally to subchapter II (§694 et seq.) of chapter 11C of former Title 38, Pensions, Bonuses, and Veterans' Relief, which was repealed and the provisions thereof reenacted as this chapter by Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1105.

Amendments

2012—Subsec. (b)(6). Pub. L. 112–154 added par. (6).

1996—Subsec. (b)(5)(B). Pub. L. 104–106 substituted "section 10143(a) of title 10" for "section 268(b) of title 10".

1994—Subsec. (b)(2). Pub. L. 103–446, §901(b), inserted "or service in the Selected Reserve" after "duty" in two places and substituted "deceased spouse shall" for "spouse shall".

Subsec. (b)(5)(A). Pub. L. 103–446, §901(a), inserted "(i)" before "who has" and substituted ", or" and cl. (ii) for the period at end.

1992—Subsec. (b)(5). Pub. L. 102–547 added par. (5).

1991Pub. L. 102–83, §5(a), renumbered section 1801 of this title as this section.

Subsec. (a). Pub. L. 102–83, §5(c)(1), substituted "3710(a) and 3712(a)(1)" for "1810(a) and 1812(a)(1)".

1989—Subsec. (b)(4). Pub. L. 101–237 added par. (4).

1988—Subsec. (a). Pub. L. 100–322 substituted "1812(a)(1)" for "1819(a)(1)".

1982—Subsec. (b)(3). Pub. L. 97–295 substituted "member shall be deemed" for "spouse shall be deemed", and "member is no longer listed" for "spouse is no longer listed".

1981—Subsec. (a). Pub. L. 97–72, §303(a)(2), added subsec. (a). Former subsec. (a) redesignated (b).

Subsec. (b). Pub. L. 97–72, §303(a)(1), (3), redesignated subsec. (a) as (b) and substituted "For the purposes of housing loans under this chapter" for "For the purposes of this chapter". Former subsec. (b) redesignated (c).

Subsec. (c). Pub. L. 97–72, §303(a)(1), (4), redesignated subsec. (b) as (c) and substituted "National Oceanic and Atmospheric Administration (or predecessor entity)" for "Coast and Geodetic Survey".

1976—Subsec. (a)(2). Pub. L. 94–324, §7(1), substituted "surviving spouse", "the spouse's own", and "the spouse" for "widow", "her own", and "her husband", respectively, wherever appearing.

Subsec. (a)(3). Pub. L. 94–324, §7(2), substituted "spouse" and "the spouse" for "wife" and "her husband", respectively, wherever appearing.

1970—Subsec. (a)(3). Pub. L. 91–584 added par. (3).

Effective Date of 2012 Amendment

Pub. L. 112–154, title II, §206(b), Aug. 6, 2012, 126 Stat. 1178, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to a loan guaranteed after the date of the enactment of this Act [Aug. 6, 2012]."

Effective Date of 1996 Amendment

Amendment by Pub. L. 104–106 effective as if included in the Reserve Officer Personnel Management Act, title XVI of Pub. L. 103–337, as enacted on Oct. 5, 1994, see section 1501(f)(3) of Pub. L. 104–106, set out as a note under section 113 of Title 10, Armed Forces.

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–72 effective at end of 180-day period beginning on Nov. 3, 1981, see section 305 of Pub. L. 97–72, set out as an Effective Date note under section 3741 of this title.

Effective Date of 1976 Amendment

Pub. L. 94–324, §9, June 30, 1976, 90 Stat. 723, provided that:

"(a) Except as provided in subsection (b), the provisions of this Act [see Tables for classification] shall become effective on the date of enactment [June 30, 1976].

"(b) Sections 2 [enacting section 1807 of this title] and 3 [amending section 1811 [now 3711] of this title] shall become effective on October 1, 1976. Section 5 [amending section 1819 [now 3712] of this title] shall become effective on July 1, 1976."

Clarification With Respect to Certain Fees

Pub. L. 112–154, title II, §206(c), Aug. 6, 2012, 126 Stat. 1179, provided that: "Fees shall be collected under section 3729 of title 38, United States Code, from a person described in paragraph (6) of section 3701(b) of such title, as added by subsection (a) of this section, in the same manner as such fees are collected from a person described in paragraph (2) of section 3701(b) of such title."

§3702. Basic entitlement

(a)(1) The veterans described in paragraph (2) of this subsection are eligible for the housing loan benefits of this chapter. In the case of any veteran who served on active duty during two or more of the periods specified in paragraph (2) for which eligibility for the housing loan benefits under this chapter may be granted, entitlement derived from service during the most recent such period (A) shall cancel any unused entitlement derived from service during any earlier such period, and (B) shall be reduced by the amount by which entitlement from service during any earlier such period has been used to obtain a direct, guaranteed, or insured housing loan—

(i) on real property which the veteran owns at the time of application; or

(ii) as to which the Secretary has incurred actual liability or loss, unless in the event of loss or the incurrence and payment of such liability by the Secretary the resulting indebtedness of the veteran to the United States has been paid in full.


(2) The veterans referred to in the first sentence of paragraph (1) of this subsection are the following:

(A) Each veteran who served on active duty at any time during World War II, the Korean conflict, or the Vietnam era and whose total service was for 90 days or more.

(B) Each veteran who after September 15, 1940, was discharged or released from a period of active duty for a service-connected disability.

(C) Each veteran, other than a veteran described in clause (A) or (B) of this paragraph, who—

(i) served after July 25, 1947, for a period of more than 180 days and was discharged or released therefrom under conditions other than dishonorable; or

(ii) has served more than 180 days in active duty status and continues on active duty without a break therein.


(D) Each veteran who served on active duty for 90 days or more at any time during the Persian Gulf War, other than a veteran ineligible for benefits under this title by reason of section 5303A(b) of this title.

(E) Each veteran described in section 3701(b)(5) of this title.

(F) Each veteran who was discharged or released from a period of active duty of 90 days or more by reason of a sole survivorship discharge (as that term is defined in section 1174(i) of title 10).


(3) Any unused entitlement of World War II or Korean conflict veterans which expired under provisions of law in effect before October 23, 1970, is hereby restored and shall not expire until used.

(4) A veteran's entitlement under this chapter shall not be reduced by any entitlement used by the veteran's spouse which was based upon the provisions of paragraph (3) of section 3701(b) of this title.

(b) In computing the aggregate amount of guaranty or insurance housing loan entitlement available to a veteran under this chapter, the Secretary may exclude the amount of guaranty or insurance housing loan entitlement used for any guaranteed, insured, or direct loan under the following circumstances:

(1)(A) The property which secured the loan has been disposed of by the veteran or has been destroyed by fire or other natural hazard; and

(B) the loan has been repaid in full, or the Secretary has been released from liability as to the loan, or if the Secretary has suffered a loss on such loan, the loss has been paid in full.

(2) A veteran-transferee has agreed to assume the outstanding balance on the loan and consented to the use of the veteran-transferee's entitlement, to the extent that the entitlement of the veteran-transferor had been used originally, in place of the veteran-transferor's for the guaranteed, insured, or direct loan, and the veteran-transferee otherwise meets the requirements of this chapter.

(3)(A) The loan has been repaid in full; and

(B) the loan for which the veteran seeks to use entitlement under this chapter is secured by the same property which secured the loan referred to in subparagraph (A) of this paragraph.

(4) In a case not covered by paragraph (1) or (2)—

(A) the loan has been repaid in full and, if the Secretary has suffered a loss on the loan, the loss has been paid in full; or

(B) the Secretary has been released from liability as to the loan and, if the Secretary has suffered a loss on the loan, the loss has been paid in full.


The Secretary may, in any case involving circumstances the Secretary deems appropriate, waive one or more of the conditions prescribed in paragraph (1). The authority of the Secretary under this subsection to exclude an amount of guaranty or insurance housing loan entitlement previously used by a veteran may be exercised only once for that veteran under the authority of paragraph (4).

(c) An honorable discharge shall be deemed to be a certificate of eligibility to apply for a guaranteed loan. Any veteran who does not have a discharge certificate, or who received a discharge other than honorable, may apply to the Secretary for a certificate of eligibility. Upon making a loan guaranteed or insured under this chapter, the lender shall forthwith transmit to the Secretary a report thereon in such detail as the Secretary may, from time to time, prescribe. Where the loan is guaranteed, the Secretary shall provide the lender with a loan guaranty certificate or other evidence of the guaranty. The Secretary shall also endorse on the veteran's discharge, or eligibility certificate, the amount and type of guaranty used, and the amount, if any, remaining. Nothing in this chapter shall preclude the assignment of any guaranteed loan or the security therefor.

(d) Housing loans will be automatically guaranteed under this chapter only if made (1) by any Federal land bank, national bank, State bank, private bank, building and loan association, insurance company, credit union, or mortgage and loan company, that is subject to examination and supervision by an agency of the United States or of any State, or (2) by any State, or (3) by any lender approved by the Secretary pursuant to standards established by the Secretary. Any housing loan proposed to be made to a veteran pursuant to this chapter by any lender not of a class specified in the preceding sentence may be guaranteed by the Secretary if the Secretary finds that it is in accord otherwise with the provisions of this chapter.

(e) The Secretary may at any time upon thirty days' notice require housing loans to be made by any lender or class of lenders to be submitted to the Secretary for prior approval. No guaranty or insurance liability shall exist with respect to any such loan unless evidence of guaranty or insurance is issued by the Secretary.

(f) Any housing loan at least 20 percent of which is guaranteed under this chapter may be made by any national bank or Federal savings and loan association, or by any bank, trust company, building and loan association, or insurance company, organized or authorized to do business in the District of Columbia. Any such loan may be so made without regard to the limitations and restrictions of any other law relating to—

(1) ratio of amount of loan to the value of the property;

(2) maturity of loan;

(3) requirement for mortgage or other security;

(4) dignity of lien; or

(5) percentage of assets which may be invested in real estate loans.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1203, §1802; Pub. L. 86–73, §1, June 30, 1959, 73 Stat. 156; Pub. L. 87–84, §1(b), July 6, 1961, 75 Stat. 201; Pub. L. 90–19, §25(1), May 25, 1967, 81 Stat. 28; Pub. L. 90–77, title IV, §403(a), Aug. 31, 1967, 81 Stat. 190; Pub. L. 91–506, §2(a), Oct. 23, 1970, 84 Stat. 1108; Pub. L. 91–584, §5(b), Dec. 24, 1970, 84 Stat. 1576; Pub. L. 93–569, §2(a), (b), Dec. 31, 1974, 88 Stat. 1863; Pub. L. 94–324, §7(3)–(5), June 30, 1976, 90 Stat. 721; Pub. L. 95–476, title I, §102, Oct. 18, 1978, 92 Stat. 1497; Pub. L. 97–72, title III, §303(b), Nov. 3, 1981, 95 Stat. 1060; Pub. L. 97–295, §4(61), Oct. 12, 1982, 96 Stat. 1309; Pub. L. 98–223, title II, §204, Mar. 2, 1984, 98 Stat. 42; Pub. L. 100–322, title IV, §415(a)(1), (2), May 20, 1988, 102 Stat. 549, 550; Pub. L. 101–237, title III, §§310, 313(b)(1), Dec. 18, 1989, 103 Stat. 2075, 2077; Pub. L. 102–25, title III, §341, Apr. 6, 1991, 105 Stat. 92; Pub. L. 102–40, title IV, §402(d)(1), May 7, 1991, 105 Stat. 239; renumbered §3702 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 102–547, §2(a)(2), Oct. 28, 1992, 106 Stat. 3633; Pub. L. 103–446, title IX, §902, title XII, §1201(f)(4), Nov. 2, 1994, 108 Stat. 4676, 4687; Pub. L. 105–368, title VI, §603(a), Nov. 11, 1998, 112 Stat. 3348; Pub. L. 106–117, title VII, §711, Nov. 30, 1999, 113 Stat. 1584; Pub. L. 107–103, title IV, §405(a), Dec. 27, 2001, 115 Stat. 993; Pub. L. 108–183, title IV, §403, Dec. 16, 2003, 117 Stat. 2664; Pub. L. 110–317, §6(a), Aug. 29, 2008, 122 Stat. 3528.)

Amendments

2008—Subsec. (a)(2)(F). Pub. L. 110–317 added subpar. (F).

2003—Subsec. (a)(2)(E). Pub. L. 108–183 substituted "Each" for "For the period beginning on October 28, 1992, and ending on September 30, 2009, each".

2001—Subsec. (a)(2)(E). Pub. L. 107–103 substituted "September 30, 2009" for "September 30, 2007".

1999—Subsec. (a)(2)(E). Pub. L. 106–117 substituted "September 30, 2007" for "September 30, 2003".

1998—Subsec. (a)(2)(E). Pub. L. 105–368 substituted "September 30, 2003" for "October 27, 1999".

1994—Subsec. (a)(2)(E). Pub. L. 103–446, §1201(f)(4), substituted "For the period beginning on October 28, 1992, and ending on October 27, 1999," for "For the 7-year period beginning on the date of enactment of this subparagraph,".

Subsec. (b). Pub. L. 103–446, §902(1), (6), (7), in introductory provisions, substituted "loan under the following circumstances:" for "loan, if—", and in concluding provisions, substituted "paragraph (1)" for "clause (1) of the preceding sentence" and inserted at end "The authority of the Secretary under this subsection to exclude an amount of guaranty or insurance housing loan entitlement previously used by a veteran may be exercised only once for that veteran under the authority of paragraph (4)."

Subsec. (b)(1). Pub. L. 103–446, §902(2), substituted "The property" for "the property" in subpar. (A) and a period for the semicolon at end of subpar. (B).

Subsec. (b)(2). Pub. L. 103–446, §902(3), substituted "A veteran-transferee" for "a veteran-transferee" and a period for "; or" at end.

Subsec. (b)(3)(A). Pub. L. 103–446, §902(4), substituted "The loan" for "the loan".

Subsec. (b)(4). Pub. L. 103–446, §902(5), added par. (4).

1992—Subsec. (a)(2)(E). Pub. L. 102–547 added subpar. (E).

1991Pub. L. 102–83, §5(a), renumbered section 1802 of this title as this section.

Subsec. (a)(2)(D). Pub. L. 102–40 substituted "5303A(b)" for "3103A(b)".

Pub. L. 102–25 added subpar. (D).

Subsec. (a)(4). Pub. L. 102–83, §5(c)(1), substituted "3701(b)" for "1801(b)".

1989—Subsecs. (a)(1)(ii), (b). Pub. L. 101–237, §313(b)(1), substituted "Secretary" for "Administrator" wherever appearing.

Subsec. (b)(3). Pub. L. 101–237, §310, added par. (3).

Subsecs. (c) to (e). Pub. L. 101–237, §313(b)(1), substituted "Secretary" for "Administrator" wherever appearing.

1988—Subsec. (a)(1). Pub. L. 100–322, §415(a)(1)(A)–(E), designated existing provisions as par. (1), substituted "The veterans described in paragraph (2) of this subsection are eligible for the housing loan benefits of this chapter" for "Each veteran who served on active duty at any time during World War II, the Korean conflict, or the Vietnam era and whose total service was for ninety days or more, or who was discharged or released from a period of active duty, any part of which occurred during World War II, the Korean conflict, or the Vietnam era, for a service-connected disability, shall be eligible for the housing loan benefits of this chapter", substituted "in paragraph (2)" for "in the preceding sentence, or in section 1818 of this title," and redesignated former cls. (1) and (2) as cls. (A) and (B), respectively, and former cls. (A) and (B) as subcls. (i) and (ii), respectively.

Subsec. (a)(2), (3). Pub. L. 100–322, §415(a)(1)(F), added pars. (2) and (3).

Subsec. (a)(4). Pub. L. 100–322, §415(a)(2), redesignated subsec. (g) as (a)(4) and substituted "1801(b)" for "1801(a)".

Subsec. (g). Pub. L. 100–322, §415(a)(2)(B), redesignated subsec. (g) as (a)(4).

1984—Subsec. (b)(2). Pub. L. 98–223 substituted "a" for "an immediate".

1982—Subsec. (f). Pub. L. 97–295 substituted "percent" for "per centum".

1981—Subsec. (a). Pub. L. 97–72, §303(b)(1), (2), substituted "the housing loan benefits" for "the benefits" in two places and "insured housing loan" for "insured loan".

Subsec. (b). Pub. L. 97–72, §303(b)(3), substituted "insurance housing loan entitlement" for "insurance entitlement" in two places.

Subsec. (d). Pub. L. 97–72, §303(b)(4), (5), substituted "Housing loans will be automatically guaranteed" for "Loans will be automatically guaranteed" and "Any housing loan proposed" for "Any loan proposed".

Subsec. (e). Pub. L. 97–72, §303(b)(6), substituted "require housing loans" for "require loans".

Subsec. (f). Pub. L. 97–72, §303(b)(7), substituted "Any housing loan at least" for "Any loan at least".

1978—Subsec. (a). Pub. L. 95–476, §102(a), inserted provisions entitling Vietnam era veterans to the benefits of this chapter and including such veterans in the cancellation of unused entitlement derived from earlier service and the reduction of current entitlement provisions of this subsection.

Subsec. (b). Pub. L. 95–476, §102(b), redesignated cl. (1) as (1)(A), cl. (2) as (B), cl. (3) as (2), and struck out reference to cl. (2) in provision authorizing the Administrator to waive certain conditions prescribed in this subsection.

1976—Subsec. (b). Pub. L. 94–324, §7(3), substituted "the Administrator deems" for "he deems" and "the veteran-transferee's entitlement" for "his entitlement".

Subsec. (c). Pub. L. 94–324, §7(4), substituted "The Administrator" for "He".

Subsec. (d). Pub. L. 94–324, §7(4), substituted "the Administrator" for "him" and "he".

Subsec. (e). Pub. L. 94–324, §7(5), substituted "the Administrator" for "him" in first sentence.

Subsec. (g). Pub. L. 94–324, §7(5), substituted "the veteran's spouse" for "his wife".

1974—Subsec. (b). Pub. L. 93–569, §2(a), expanded provisions so as to permit restoration of a veteran's entitlement to a guaranteed, insured, or direct loan provided any prior loan has been paid in full, and the property has been disposed of by the veteran, or any immediate veteran-transferee has agreed to the use of his veteran's entitlement.

Subsec. (d)(3). Pub. L. 93–569, §2(b), substituted provisions relating to any lender approved by Administrator pursuant to standards established by him, for provisions relating to approval of mortgagees by Secretary of Housing and Urban Development and designated by him as certified agent.

1970—Subsec. (b). Pub. L. 91–506 struck out loan eligibility expiration dates for World War II and Korean conflict veterans.

Subsec. (g). Pub. L. 91–584 added subsec. (g).

1967—Subsec. (b). Pub. L. 90–77 extended loan program for certain World War II veterans from July 26, 1967 to July 26, 1970.

Subsec. (d). Pub. L. 90–19 substituted "mortgagee approved by the Secretary of Housing and Urban Development and designated by him" for "Federal Housing Administration approved mortgagee designated by the Federal Housing Commissioner".

1961—Subsec. (b). Pub. L. 87–84 substituted in last sentence "by a World War II veteran at any time before July 26, 1967, and by a Korean conflict veteran at any time before February 1, 1975" for "at any time before February 1, 1965".

1959—Subsec. (d)(3). Pub. L. 86–73 added cl. (3).

Effective Date of 2008 Amendment

Amendment by Pub. L. 110–317 applicable with respect to any sole survivorship discharge granted after Sept. 11, 2001, see section 10 of Pub. L. 110–317, set out as a note under section 2108 of Title 5, Government Organization and Employees.

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–368 effective Oct. 1, 1998, see section 602(f) of Pub. L. 105–368, set out as a note under section 2106 of this title.

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–72 effective at end of 180-day period beginning on Nov. 3, 1981, see section 305 of Pub. L. 97–72, set out as an Effective Date note under section 3741 of this title.

Effective Date of 1978 Amendment

Pub. L. 95–476, title I, §108, Oct. 18, 1978, 92 Stat. 1502, provided that:

"(a) Except as provided in subsection (b) of this section, the amendments made by this title [see Tables for classification] shall take effect on October 1, 1978.

"(b) The amendment made by clause (1) of section 104 of this title [amending section 1810 [now 3710] shall take effect on July 1, 1979, except with respect to the authority to prescribe regulations for the implementation of such amendment, which shall be effective on the date of the enactment of this Act [Oct. 18, 1978]."

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–324 effective June 30, 1976, see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.

Effective Date of 1974 Amendment

Pub. L. 93–569, §10, Dec. 31, 1974, 88 Stat. 1867, provided that: "The provisions of this Act [see Tables for classification] shall become effective on the date of enactment [Dec. 31, 1974] except that the amendments made by sections 2(a)(3) [amending section 1802 [now 3702] of this title] and 2(b) [amending section 1802 [now 3702] of this title] and section 3(2) [amending section 1810 [now 3710] of this title] and 3(4) [amending section 1810 [now 3710] of this title] shall become effective ninety days after such date of enactment [Dec. 31, 1974]."

Effective Date of 1967 Amendment

Amendment by Pub. L. 90–77 effective first day of first calendar month which begins more than ten days after Aug. 31, 1967, see section 405 of Pub. L. 90–77, set out as a note under section 101 of this title.

Annual Reports on Veterans Receiving Guaranteed Mortgage Loans as Result of Amendments by Pub. L. 102–547

Pub. L. 102–547, §2(c), Oct. 28, 1992, 106 Stat. 3634, directed Secretary of Veterans Affairs to transmit report on selected reserve veterans receiving guaranteed mortgage loans to Committees on Veterans' Affairs of Senate and House of Representatives no later than Dec. 31, 1994, and annually thereafter, prior to repeal by Pub. L. 104–110, title II, §201(b), Feb. 13, 1996, 110 Stat. 770.

References in Other Laws

Pub. L. 100–322, title IV, §415(c)(7), May 20, 1988, 102 Stat. 551, provided that: "Any reference, in effect on the date of the enactment of this Act [May 20, 1988], in any law, rule, or regulation to any of the sections, or parts thereof, which are redesignated or transferred by this section [sections 1802(a), (g), 1815, 1816(a) to (c), 1816(d) to (f), 1817, 1817A, 1819, and 1832 of this title were redesignated as sections 1802(a)(1), (4), 1803(a)(2), 1832(a) to (c), 1833(a) to (c), 1813, 1814, 1812, and 1833(d) [now 3702(a)(1), (4), 3703(a)(2), 3732(a) to (c), 3733(a) to (c), 3713, 3714, 3712, and 3733(d)], respectively, of this title] shall be construed to refer to the section, or part thereof, as redesignated or transferred by this section."

Technical Nature of 1986 Amendments

Pub. L. 100–322, title IV, §415(f), May 20, 1988, 102 Stat. 552, provided that: "The status of any veteran with respect to benefits under chapter 37 of title 38, United States Code, shall not be affected by the amendments made by, or other provisions of, this section [see Tables for classification]."

§3703. Basic provisions relating to loan guaranty and insurance

(a)(1)(A) Any loan to a veteran eligible for benefits under this chapter, if made for any of the purposes specified in section 3710 of this title and in compliance with the provisions of this chapter, is automatically guaranteed by the United States in an amount not to exceed the lesser of—

(i)(I) in the case of any loan of not more than $45,000, 50 percent of the loan;

(II) in the case of any loan of more than $45,000, but not more than $56,250, $22,500;

(III) except as provided in subclause (IV) of this clause, in the case of any loan of more than $56,250, the lesser of $36,000 or 40 percent of the loan; or

(IV) in the case of any loan of more than $144,000 for a purpose specified in clause (1), (2), (3), (5), (6), or (8) of section 3710(a) of this title, the lesser of the maximum guaranty amount (as defined in subparagraph (C)) or 25 percent of the loan; or

(ii) the maximum amount of guaranty entitlement available to the veteran as specified in subparagraph (B) of this paragraph.


(B) The maximum amount of guaranty entitlement available to a veteran for purposes specified in section 3710 of this title shall be $36,000, or in the case of a loan described in subparagraph (A)(i)(IV) of this paragraph, the maximum guaranty amount (as defined in subparagraph (C)), reduced by the amount of entitlement previously used by the veteran under this chapter and not restored as a result of the exclusion in section 3702(b) of this title.

(C) In this paragraph, the term "maximum guaranty amount" means the dollar amount that is equal to 25 percent of the Freddie Mac conforming loan limit limitation determined under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for a single-family residence, as adjusted for the year involved.

(2)(A) Any housing loan which might be guaranteed under the provisions of this chapter, when made or purchased by any financial institution subject to examination and supervision by any agency of the United States or of any State may, in lieu of such guaranty, be insured by the Secretary under an agreement whereby the Secretary will reimburse any such institution for losses incurred on such loan up to 15 per centum of the aggregate of loans so made or purchased by it.

(B) Loans insured under this section shall be made on such other terms, conditions, and restrictions as the Secretary may prescribe within the limitations set forth in this chapter.

(b) The liability of the United States under any guaranty, within the limitations of this chapter, shall decrease or increase pro rata with any decrease or increase of the amount of the unpaid portion of the obligation.

(c)(1) Loans guaranteed or insured under this chapter shall be payable upon such terms and conditions as may be agreed upon by the parties thereto, subject to the provisions of this chapter and regulations of the Secretary issued pursuant to this chapter, and shall bear interest not in excess of such rate as the Secretary may from time to time find the loan market demands, except that in establishing the rate of interest that shall be applicable to such loans, the Secretary shall consult with the Secretary of Housing and Urban Development regarding the rate of interest applicable to home loans insured under section 203(b) of the National Housing Act (12 U.S.C. 1709(b)). In establishing rates of interest under this paragraph for one or more of the purposes described in clauses (4) and (7) of section 3710(a) of this title, the Secretary may establish a rate or rates higher than the rate specified for other purposes under such section, but any such rate may not exceed such rate as the Secretary may from time to time find the loan market demands for loans for such purposes.

(2) The provisions of the Servicemen's Readjustment Act of 1944 which were in effect before April 1, 1958, with respect to the interest chargeable on loans made or guaranteed under such Act shall, notwithstanding the provisions of paragraph (1) of this subsection, continue to be applicable—

(A) to any loan made or guaranteed before April 1, 1958; and

(B) to any loan with respect to which a commitment to guarantee was entered into by the Secretary before April 1, 1958.


(3) This section shall not be construed to prohibit a veteran from paying to a lender any reasonable discount required by such lender, when the proceeds from the loan are to be used—

(A) to refinance indebtedness pursuant to clause (5), (8), or (9)(B)(i) of section 3710(a) of this title or section 3712(a)(1)(F) of this title;

(B) to repair, alter, or improve a farm residence or other dwelling pursuant to clauses (4) and (7) of section 3710(a) of this title;

(C) to construct a dwelling or farm residence on land already owned or to be acquired by the veteran except where the land is directly or indirectly acquired from a builder or developer who has contracted to construct such dwelling for the veteran;

(D) to purchase a dwelling from a class of sellers which the Secretary determines are legally precluded under all circumstances from paying such a discount if the best interest of the veteran would be so served; or

(E) to refinance indebtedness and purchase a manufactured-home lot pursuant to section 3710(a)(9)(B)(ii) or 3712(a)(1)(G) of this title, but only with respect to that portion of the loan used to refinance such indebtedness.


(4)(A) In guaranteeing or insuring loans under this chapter, the Secretary may elect whether to require that such loans bear interest at a rate that is—

(i) agreed upon by the veteran and the mortgagee; or

(ii) established under paragraph (1).


The Secretary may, from time to time, change the election under this subparagraph.

(B) Any veteran, under a loan described in subparagraph (A)(i), may pay reasonable discount points in connection with the loan. Except in the case of a loan for the purpose specified in section 3710(a)(8), 3710(b)(7), or 3712(a)(1)(F) of this title, discount points may not be financed as part of the principal amount of a loan guaranteed or insured under this chapter.

(C) Not later than 10 days after an election under subparagraph (A), the Secretary shall transmit to the Committees on Veterans' Affairs of the Senate and House of Representatives a notification of the election, together with an explanation of the reasons therefor.

(d)(1) The maturity of any housing loan at the time of origination shall not be more than thirty years and thirty-two days.

(2)(A) Any loan for a term of more than five years shall be amortized in accordance with established procedure.

(B) The Secretary may guarantee loans with provisions for various rates of amortization corresponding to anticipated variations in family income. With respect to any loan guaranteed under this subparagraph—

(i) the initial principal amount of the loan may not exceed the reasonable value of the property as of the time the loan is made; and

(ii) the principal amount of the loan thereafter (including the amount of all interest to be deferred and added to principal) may not at any time be scheduled to exceed the projected value of the property.


(C) For the purposes of subparagraph (B) of this paragraph, the projected value of the property shall be calculated by the Secretary by increasing the reasonable value of the property as of the time the loan is made at a rate not in excess of 2.5 percent per year, but in no event may the projected value of the property for the purposes of such subparagraph exceed 115 percent of such reasonable value. A loan made for a purpose other than the acquisition of a single-family dwelling unit may not be guaranteed under such subparagraph.

(3)(A) Any real estate housing loan (other than for repairs, alterations, or improvements) shall be secured by a first lien on the realty. In determining whether a loan is so secured, the Secretary may either disregard or allow for subordination to a superior lien created by a duly recorded covenant running with the realty in favor of either of the following:

(i) A public entity that has provided or will provide assistance in response to a major disaster as determined by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).

(ii) A private entity to secure an obligation to such entity for the homeowner's share of the costs of the management, operation, or maintenance of property, services, or programs within and for the benefit of the development or community in which the veteran's realty is located, if the Secretary determines that the interests of the veteran borrower and of the Government will not be prejudiced by the operation of such covenant.


(B) With respect to any superior lien described in subparagraph (A) created after June 6, 1969, the Secretary's determination under clause (ii) of such subparagraph shall have been made prior to the recordation of the covenant.

(e)(1) Except as provided in paragraph (2) of this subsection, an individual who pays a fee under section 3729 of this title, or who is exempted under section 3729(c) of this title from paying such fee, with respect to a housing loan guaranteed or insured under this chapter that is closed after December 31, 1989, shall have no liability to the Secretary with respect to the loan for any loss resulting from any default of such individual except in the case of fraud, misrepresentation, or bad faith by such individual in obtaining the loan or in connection with the loan default.

(2) The exemption from liability provided by paragraph (1) of this subsection shall not apply to—

(A) an individual from whom a fee is collected (or who is exempted from such fee) under section 3729(b)(2)(I) of this title; or

(B) a loan made for any purpose specified in section 3712 of this title.


(f) The application for or obtaining of a loan made, insured, or guaranteed under this chapter shall not be subject to reporting requirements applicable to requests for, or receipts of, Federal contracts, grants, loans, loan guarantees, loan insurance, or cooperative agreements except to the extent that such requirements are provided for in, or by the Secretary pursuant to, this title.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1205, 1212, §1803; Pub. L. 86–73, §2, June 30, 1959, 73 Stat. 156; Pub. L. 86–665, §1, July 14, 1960, 74 Stat. 531; Pub. L. 87–84, §1(a), July 6, 1961, 75 Stat. 201; Pub. L. 89–358, §5(d), Mar. 3, 1966, 80 Stat. 26; Pub. L. 90–77, title IV, §403(b), Aug. 31, 1967, 81 Stat. 190; Pub. L. 91–22, §4, June 6, 1969, 83 Stat. 32; Pub. L. 91–506, §2(b), (c), Oct. 23, 1970, 84 Stat. 1108; Pub. L. 93–75, July 26, 1973, 87 Stat. 176; Pub. L. 93–569, §§2(c), 8(1)–(5), Dec. 31, 1974, 88 Stat. 1863, 1866; Pub. L. 94–324, §7(6), (16), June 30, 1976, 90 Stat. 721; Pub. L. 95–476, title I, §103, Oct. 18, 1978, 92 Stat. 1498; Pub. L. 96–385, title IV, §401(c)(1), Oct. 7, 1980, 94 Stat. 1533; Pub. L. 97–66, title V, §501(a), Oct. 17, 1981, 95 Stat. 1031; Pub. L. 97–72, title III, §303(c), (e), Nov. 3, 1981, 95 Stat. 1060; Pub. L. 97–295, §4(61), (63), Oct. 12, 1982, 96 Stat. 1309; Pub. L. 97–306, title IV, §406(b), Oct. 14, 1982, 96 Stat. 1444; Pub. L. 98–223, title II, §205(c), Mar. 2, 1984, 98 Stat. 43; Pub. L. 100–198, §3(a)(1), Dec. 21, 1987, 101 Stat. 1315; Pub. L. 100–253, §3(a), Feb. 29, 1988, 102 Stat. 20; Pub. L. 100–322, title IV, §415(a)(3), (c)(2), (d)(1), May 20, 1988, 102 Stat. 550–552; Pub. L. 101–237, title III, §§304(a), 306(a), 313(b)(1), (6), Dec. 18, 1989, 103 Stat. 2073, 2074, 2077; Pub. L. 102–54, §§4(b), 6, June 13, 1991, 105 Stat. 268; renumbered §3703 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 102–547, §10(a), Oct. 28, 1992, 106 Stat. 3643; Pub. L. 103–78, §6, Aug. 13, 1993, 107 Stat. 769; Pub. L. 103–353, §7, Oct. 13, 1994, 108 Stat. 3175; Pub. L. 104–110, title I, §101(d), Feb. 13, 1996, 110 Stat. 768; Pub. L. 105–368, title VI, §602(e)(1)(A), Nov. 11, 1998, 112 Stat. 3346; Pub. L. 107–103, title IV, §401, Dec. 27, 2001, 115 Stat. 993; Pub. L. 107–330, title III, §308(f)(1), Dec. 6, 2002, 116 Stat. 2828; Pub. L. 108–454, title IV, §403, Dec. 10, 2004, 118 Stat. 3616; Pub. L. 110–389, title V, §504(a), Oct. 10, 2008, 122 Stat. 4176; Pub. L. 111–22, div. A, title I, §102(a), May 20, 2009, 123 Stat. 1636; Pub. L. 112–154, title VII, §701(d), Aug. 6, 2012, 126 Stat. 1204.)

References in Text

The Servicemen's Readjustment Act of 1944, referred to in subsec. (c)(2), is act June 22, 1944, ch. 268, 58 Stat. 284, as amended, which was classified generally to chapter 11C (§§693 to 697g) of former Title 38, Pensions, Bonuses, and Veterans' Relief, which was repealed upon the enactment of Title 38, Veterans' Benefits, by Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1105. For distribution of sections 693 to 697g of former Title 38 in this title, see Table preceding section 101 of this title.

The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (d)(3)(A)(i), is Pub. L. 93–288, May 22, 1974, 88 Stat. 143, which is classified principally to chapter 68 (§5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 5121 of Title 42 and Tables.

Amendments

2012—Subsec. (d)(3). Pub. L. 112–154 amended par. (3) generally. Prior to amendment, par. (3) read as follows: "Any real estate housing loan (other than for repairs, alterations, or improvements) shall be secured by a first lien on the realty. In determining whether a loan for the purchase or construction of a home is so secured, the Secretary may disregard a superior lien created by a duly recorded covenant running with the realty in favor of a private entity to secure an obligation to such entity for the homeowner's share of the costs of the management, operation, or maintenance of property, services or programs within and for the benefit of the development or community in which the veteran's realty is located, if the Secretary determines that the interests of the veteran borrower and of the Government will not be prejudiced by the operation of such covenant. In respect to any such superior lien to be created after June 6, 1969, the Secretary's determination must have been made prior to the recordation of the covenant."

2009—Subsec. (d)(1). Pub. L. 111–22 inserted "at the time of origination" after "loan".

2008—Subsec. (a)(1)(A)(i)(IV). Pub. L. 110–389 inserted "(5)," after "(3),".

2004—Subsec. (a)(1)(A)(i)(IV), (B). Pub. L. 108–454, §403(a), substituted "the maximum guaranty amount (as defined in subparagraph (C))" for "$60,000".

Subsec. (a)(1)(C). Pub. L. 108–454, §403(b), added subpar. (C).

2002—Subsec. (e)(2)(A). Pub. L. 107–330 substituted "3729(b)(2)(I)" for "3729(b)".

2001—Subsec. (a)(1)(A)(i)(IV), (B). Pub. L. 107–103 substituted "$60,000" for "$50,750".

1998—Subsec. (e)(1). Pub. L. 105–368 substituted "3729(c)" for "3729(c)(1)".

1996—Subsec. (c)(4)(D). Pub. L. 104–110 struck out subpar. (D) which read as follows: "This paragraph shall expire on December 31, 1995."

1994—Subsec. (a)(1)(A)(i)(IV), (B). Pub. L. 103–353 substituted "$50,750" for "$46,000".

1993—Subsec. (c)(4)(B). Pub. L. 103–78 in second sentence substituted "Except in the case of a loan for the purpose specified in section 3710(a)(8), 3710(b)(7), or 3712(a)(1)(F) of this title, discount" for "Discount".

1992—Subsec. (c)(1). Pub. L. 102–547, §10(a)(1), in first sentence substituted "applicable to" for "the Secretary of Housing and Urban Development considers necessary to meet the mortgage market for" and struck out ", and, to the maximum extent practicable, carry out a coordinated policy on interest rates on loans insured under such section 203(b) and on loans guaranteed or insured under this chapter" after "(12 U.S.C. 1709(b))".

Subsec. (c)(4). Pub. L. 102–547, §10(a)(2), added par. (4).

1991Pub. L. 102–83, §5(a), renumbered section 1803 of this title as this section.

Subsec. (a)(1)(A). Pub. L. 102–83, §5(c)(1), substituted "3710" for "1810" in introductory provisions.

Subsec. (a)(1)(A)(i)(III). Pub. L. 102–54, §6(1), inserted "except as provided in subclause (IV) of this clause," after "(III)" and struck out "but not more than $144,000," after "$56,250,".

Subsec. (a)(1)(A)(i)(IV). Pub. L. 102–83, §5(c)(1), substituted "3710(a)" for "1810(a)".

Pub. L. 102–54, §6(2), substituted "(6), or (8)" for "or (6)".

Subsec. (a)(1)(B). Pub. L. 102–83, §5(c)(1), substituted "3710" for "1810" and "3702(b)" for "1802(b)".

Subsec. (c)(1). Pub. L. 102–83, §5(c)(1), substituted "3710(a)" for "1810(a)".

Subsec. (c)(3). Pub. L. 102–83, §5(c)(1), substituted "3710(a)" for "1810(a)" and "3712(a)(1)(F)" for "1812(a)(1)(F)" in subpar. (A), "3710(a)" for "1810(a)" in subpar. (B), and "3710(a)(9)(B)(ii) or 3712(a)(1)(G)" for "1810(a)(9)(B)(ii) or 1812(a)(1)(G)" in subpar. (E).

Subsec. (e)(1). Pub. L. 102–83, §5(c)(1), substituted "3729" for "1829" and "3729(c)(1)" for "1829(c)(1)".

Subsec. (e)(2). Pub. L. 102–83, §5(c)(1), substituted "3729(b)" for "1829(b)" in subpar. (A) and "3712" for "1812" in subpar. (B).

Subsec. (f). Pub. L. 102–54, §4(b), added subsec. (f).

1989—Subsec. (a)(1)(A)(i). Pub. L. 101–237, §306(a)(1), added subcls. (II) to (IV) and struck out former subcl. (II) which read as follows: "in the case of any loan of more than $45,000, the lesser of $36,000 or 40 percent of the loan, except that the amount of such guaranty for any such loan shall not be less than $22,500; or".

Subsec. (a)(1)(B). Pub. L. 101–237, §306(a)(2), inserted ", or in the case of a loan described in subparagraph (A)(i)(IV) of this paragraph, $46,000," after "$36,000".

Subsec. (a)(2). Pub. L. 101–237, §313(b)(1), substituted "Secretary" for "Administrator" wherever appearing.

Subsec. (c)(1). Pub. L. 101–237, §313(b)(6), substituted "Secretary of Housing and Urban Development considers" for "Secretary considers".

Pub. L. 101–237, §313(b)(1), substituted "Secretary" for "Administrator" wherever appearing.

Subsec. (c)(2)(B), (3)(D). Pub. L. 101–237, §313(b)(1), substituted "Secretary" for "Administrator".

Subsec. (d)(2)(B), (C), (3). Pub. L. 101–237, §313(b)(1), substituted "Secretary" and "Secretary's" for "Administrator" and "Administrator's", respectively, wherever appearing.

Subsec. (e). Pub. L. 101–237, §304(a), added subsec. (e).

1988Pub. L. 100–322, §415(a)(3)(B), inserted "and insurance" in section catchline.

Subsec. (a)(1). Pub. L. 100–322, §415(d)(1), inserted "as specified in subparagraph (B) of this paragraph" before period at end of cl. (A)(ii) and substituted "for purposes specified in section 1810 of this title" for "under section 1810 of this chapter" in cl. (B).

Pub. L. 100–253 amended par. (1) generally. Prior to amendment, par. (1) read as follows: "Any loan to a veteran eligible for benefits under this chapter, if made for any of the purposes specified in section 1810 of this title and in compliance with the provisions of this chapter, is automatically guaranteed by the United States in an amount not to exceed—

"(A) in the case of any loan of not more than $45,000, 50 percent of the loan; or

"(B) in the case of any loan of more than $45,000, 40 percent of the loan or $36,000, whichever is less, except that the amount of such guaranty for any such loan shall not be less than $22,500;

reduced by the amount of entitlement previously used by the veteran under this chapter and not restored as a result of the exclusion in section 1802(b) of this title."

Subsec. (a)(2). Pub. L. 100–322, §415(a)(3)(A)(ii), (iii), (B)(ii), redesignated subsecs. (a) and (b) of section 1815 of this title as subpars. (A) and (B), respectively, of par. (2) of subsec. (a) of this section and struck out former par. (2) which read as follows: "Any unused entitlement of World War II or Korean conflict veterans which expired under provisions of law in effect before October 23, 1970, is hereby restored and shall not expire until used."

Subsec. (c)(3)(A). Pub. L. 100–322, §415(c)(2)(A), substituted "1812(a)(1)(F)" for "1819(a)(1)(F)".

Subsec. (c)(3)(E). Pub. L. 100–322, §415(c)(2)(B), substituted "1812(a)(1)(G)" for "1819(a)(1)(G)".

1987—Subsec. (a)(1). Pub. L. 100–198 amended par. (1) generally. Prior to amendment, par. (1) read as follows: "Any loan to a veteran eligible for benefits under this chapter, if made for any of the purposes, and in compliance with the provisions, specified in this chapter is automatically guaranteed by the United States in an amount not more than 60 percent of the loan if the loan is made for any of the purposes specified in section 1810 of this title."

1984—Subsec. (c)(3)(A). Pub. L. 98–223, §205(c)(1), substituted ", (8), or (9)(B)(i)" for "or (8)".

Subsec. (c)(3)(E). Pub. L. 98–223, §205(c)(2), inserted "1810(a)(9)(B)(ii) or" after "section".

1982—Subsec. (a)(1). Pub. L. 97–295, §4(61), substituted "percent" for "per centum".

Subsec. (a)(2). Pub. L. 97–295, §4(63)(A), substituted "before October 23, 1970," for "prior to the date of enactment of the Veterans' Housing Act of 1970".

Subsec. (c)(1). Pub. L. 97–295, §4(63)(B), inserted "(12 U.S.C. 1709(b))" after "the National Housing Act".

Subsec. (c)(3). Pub. L. 97–306, §406(b)(1), substituted "used—" for "used:". Notwithstanding that Pub. L. 97–306 directed amendment be made in provisions preceding cl. (1), amendment was executed in provisions preceding cl. (A) as the probable intent of Congress in view of the absence of a cl. (1) in subsec. (c)(3).

Subsec. (c)(3)(E). Pub. L. 97–306, §406(b)(2)–(4), added cl. (E).

Subsec. (d)(3). Pub. L. 97–295, §4(63)(C), substituted "June 6, 1969" for "the effective date of this amendment".

1981—Subsec. (a)(2)(A) [formerly §1815(a)]. Pub. L. 97–72, §303(e), substituted "Any housing loan" for "Any loan". See 1988 Amendment note above.

Subsec. (d)(1). Pub. L. 97–72, §303(c)(1), substituted "any housing loan" for "any loan".

Subsec. (d)(2). Pub. L. 97–66 designated existing provisions as subpar. (A) and added subpars. (B) and (C).

Subsec. (d)(3). Pub. L. 97–72, §303(c)(2), substituted "Any real estate housing loan" for "Any real estate loan".

1980—Subsec. (c)(3)(A). Pub. L. 96–385 substituted "clause (5) or (8) of section 1810(a) of this title or section 1819(a)(1)(F) of this title" for "section 1810(a)(5)".

1978—Subsec. (a)(1). Pub. L. 95–476, §103(a), substituted provision extending loan guarantees under this section to veterans eligible for benefits under this chapter for provision limiting such guarantees to World War II or Korean conflict veterans.

Subsec. (c)(1). Pub. L. 95–476, §103(b)(1), inserted provision authorizing the Administrator in establishing rates of interest under this paragraph for purposes of cls. (4) to (7) of section 1810(a) of this title to establish rates higher than the rate specified for other purposes under such section but not in excess of the rate the Administrator may find the loan market demands for loans for such purposes.

Subsec. (c)(3)(B). Pub. L. 95–476, §103(b)(2), substituted "clauses (4) and (7) of section 1810(a) of this title" for "section 1810(a)(4)".

1976—Subsec. (a)(2)(A) [formerly §1815(a)]. Pub. L. 94–324, §7(16), substituted "the Administrator will" for "he will". See 1988 Amendment note above.

Subsec. (d)(3). Pub. L. 94–324, §7(6), substituted "the Administrator determines" for "he determines".

1974—Subsec. (a)(1). Pub. L. 93–569, §8(1), struck out "and not more than 50 per centum of the loan if the loan is for any of the purposes specified in section 1812, 1813, or 1814 of this title" after "section 1810 of this title".

Subsec. (a)(2)(B) [formerly §1815(b)]. Pub. L. 93–569, §8(5), struck out provision authorizing the Administrator to fix maximum interest rate payable on non-real-estate loans at not in excess of 3 percent discount rate or an equivalent straight interest rate on unamortized loans.

Pub. L. 93–569, §8(2), struck out provision that, except as provided in sections 1810, 1811, and 1819, the aggregate amount guaranteed should not be more than $2,000 in the case of non-real-estate loans, nor $4,000 in the case of real-estate loans or a prorated portion thereof in a combination loan.

Subsec. (c)(3). Pub. L. 93–569, §2(c), added par. (3).

Subsec. (d)(1). Pub. L. 93–569, §8(3), substituted provision that the maturity of any loan shall not be more than thirty years and thirty-two days for provisions that non-real-estate loans shall not be more than ten years except as provided in section 1819, that the maturity of a real estate loan be not more than thirty years, and a loan on farm realty be not more than forty years.

Subsec. (d)(3). Pub. L. 93–569, §8(4), struck out provision that any non-real-estate loan should be secured by personalty to the extent legal and practicable.

1973—Subsec. (c)(1). Pub. L. 93–75 substituted provisions requiring the Administrator to consult with the Secretary of Housing and Urban Development regarding the establishment of the rate of interest the Secretary considers necessary to meet the mortgage market for home loans insured under section 203(b) of the National Housing Act, and to carry out a coordinated policy on interest rates on loans insured under such section 203(b) and on loans guaranteed or insured under this chapter, for former provision limiting rate of interest to rate in effect under section 203(b)(5) of the National Housing Act.

1970—Subsec. (a). Pub. L. 91–506, §2(b), struck out loan eligibility expiration dates for World War II and Korean conflict veterans and inserted provision restoring expired entitlements of World War II and Korean conflict veterans and providing that such entitlements shall not expire until used.

Subsec. (b). Pub. L. 91–506, §2(c)(1), substituted "1810, 1811, and 1819" for "1810 and 1811".

Subsec. (d)(1). Pub. L. 91–506, §2(c)(2), limited maturity of non-real-estate loan to not more than ten years except as provided in section 1819 of this title.

1969—Subsec. (d)(3). Pub. L. 91–22 authorized the Administrator, in determining whether a Government loan is secured by a first lien on realty, to disregard a superior lien created by a duly recorded covenant which secures a veteran homeowner's share of the costs of managing, operating or maintaining property, services or programs common to the community in which the veteran's home is located, provided the interests of the Government and the veteran borrower are not prejudiced.

1967—Subsec. (a)(3)(A). Pub. L. 90–77 extended in cls. (i) and (ii) loan program for certain World War II veterans from July 25, 1967 to July 25, 1970.

1966—Subsec. (c)(1). Pub. L. 89–358 struck out provision for approval of rate of interest by the Secretary of the Treasury and substituted provision for a rate not in excess of that in effect under section 203(b)(5) of the National Housing Act, section 1709(b)(5) of Title 12, for former limitation of 5¼ per centum per annum.

1961—Subsec. (a). Pub. L. 87–84 substituted "to a World War II or Korean conflict veteran, if made within the applicable period prescribed in paragraph (3) of this subsection" for "made to a World War II veteran, if made before July 26, 1962 (or, in the case of a veteran described in section 1801(a)(1)(B) of this title, before the expiration of fifteen years after World War II is deemed to have ended with respect to him), or to a Korean conflict veteran, if made before February 1, 1965," in par. (1), and "is received by the Administrator before the date of the expiration of the veteran's entitlement, the loan" for "to a World War II veteran, whose entitlement would otherwise expire on July 25, 1962, has been received by the Administrator before July 26, 1962, such loan" in par. (2), and added par. (3).

1960—Subsec. (a). Pub. L. 86–665 substituted "1962" for "1960" in three places, "fifteen" for "thirteen" years, and "after such date" for "before July 26, 1961".

1959—Subsec. (c)(1). Pub. L. 86–73 struck out requirement that the interest rate on a Veterans' Administration guarantee for direct loan be at least one-half of one percent below the prevailing rate on FHA-insured sales housing loans and increased the interest rate ceiling from 4¾ to 5¼ percent.

Effective Date of 2012 Amendment

Amendment by Pub. L. 112–154 effective on the date that is one year after Aug. 6, 2012, see section 701(g) of Pub. L. 112–154, set out as an Effective Date note under section 2109 of this title.

Effective Date of 2002 Amendment

Pub. L. 107–330, title III, §308(f)(2), Dec. 6, 2002, 116 Stat. 2828, provided that: "The amendment made by paragraph (1) [amending this section] shall take effect as if included in the enactment of section 402 of the Veterans Benefits and Health Care Improvement Act of 2000 (Public Law 106–419; 114 Stat. 1861)."

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–368 effective Oct. 1, 1998, see section 602(f) of Pub. L. 105–368, set out as a note under section 2106 of this title.

Effective Date of 1994 Amendment

Amendment by Pub. L. 103–353 effective with respect to reemployments initiated on or after the first day after the 60-day period beginning Oct. 13, 1994, with transition rules, see section 8 of Pub. L. 103–353, set out as an Effective Date note under section 4301 of this title.

Effective Date of 1989 Amendment

Pub. L. 101–237, title III, §306(b), Dec. 18, 1989, 103 Stat. 2074, provided that: "The amendments made by subsection (a) [amending this section] shall take effect on the date of the enactment of this Act [Dec. 18, 1989] and shall apply only with respect to loans closed after such date."

Effective Date of 1988 Amendment

Pub. L. 100–253, §3(c), Feb. 29, 1988, 102 Stat. 21, provided that: "The amendments made by this section [amending this section and section 1819 [now 3712] of this title] shall apply to loans which are closed on or after February 1, 1988, except that they shall not apply to any loan for which a guaranty commitment is made on or before December 31, 1987."

Effective Date of 1987 Amendment

Pub. L. 100–198, §3(d), Dec. 21, 1987, 101 Stat. 1316, provided that: "The amendments made by this section [amending this section and sections 1810, 1811, and 1819 [now 3710, 3711, and 3712] of this title] shall apply to loans which are closed on or after February 1, 1988, except that they shall not apply to any loan for which a guaranty commitment is made on or before December 31, 1987."

Effective Date of 1981 Amendments

Amendment by Pub. L. 97–72 effective at end of 180-day period beginning on Nov. 3, 1981, see section 305 of Pub. L. 97–72, set out as an Effective Date note under section 3741 of this title.

Amendment by Pub. L. 97–66 effective Oct. 17, 1981, see section 701(b)(1) of Pub. L. 97–66, set out as a note under section 1114 of this title.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–385 effective Oct. 7, 1980, see section 601(d) of Pub. L. 96–385, set out as a note under section 1114 of this title.

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–476 effective Oct. 1, 1978, see section 108(a) of Pub. L. 95–476, set out as a note under section 3702 of this title.

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–324 effective June 30, 1976, see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.

Effective Date of 1974 Amendment

Amendment by Pub. L. 93–569 effective Dec. 31, 1974, see section 10 of Pub. L. 93–569, set out as a note under section 3702 of this title.

Effective Date of 1967 Amendment

Amendment by Pub. L. 90–77 effective first day of first calendar month which begins more than ten days after Aug. 31, 1967, see section 405 of Pub. L. 90–77, set out as a note under section 101 of this title.

Implementation of Amendment by Pub. L. 111–22

Pub. L. 111–22, div. A, title I, §102(b), May 20, 2009, 123 Stat. 1636, provided that: "The Secretary of Veterans Affairs may implement the amendments made by this section [amending this section] through notice, procedure notice, or administrative notice."

Temporary Increase in Maximum Loan Guaranty Amount for Certain Housing Loans Guaranteed by Secretary of Veterans Affairs

Pub. L. 110–389, title V, §501, Oct. 10, 2008, 122 Stat. 4175, as amended by Pub. L. 112–154, title VII, §702(c), Aug. 6, 2012, 126 Stat. 1205, provided that: "Notwithstanding subparagraph (C) of section 3703(a)(1) of title 38, United States Code, for purposes of any loan described in subparagraph (A)(i)(IV) of such section that is originated during the period beginning on the date of the enactment of this Act [Oct. 10, 2008] and ending on December 31, 2014, the term 'maximum guaranty amount' shall mean an amount equal to 25 percent of the higher of—

"(1) the limitation determined under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for the calendar year in which the loan is originated for a single-family residence; or

"(2) 125 percent of the area median price for a single-family residence, but in no case to exceed 175 percent of the limitation determined under such section 305(a)(2) for the calendar year in which the loan is originated for a single-family residence."

Ratification of Actions During Period of Expired Authority

Any action taken by Secretary of Veterans Affairs before Feb. 13, 1996, under provision of law amended by title I of Pub. L. 104–110 that was taken during period beginning on date on which authority of Secretary under such provision of law expired and ending on Feb. 13, 1996, considered to have same force and effect as if such amendment had been in effect at time of that action, see section 103 of Pub. L. 104–110, set out as a note under section 1710 of this title.

Annual Reports on Guarantee and Insurance of Loans Bearing Negotiated Interest Rates and Points

Pub. L. 102–547, §10(b), Oct. 28, 1992, 106 Stat. 3643, as amended by Pub. L. 103–446, title XII, §1202(d), Nov. 2, 1994, 108 Stat. 4689, directed Secretary of Veterans Affairs to transmit report on guarantee and insurance of loans bearing negotiated interest rates and points to Committees on Veterans' Affairs of Senate and House of Representatives no later than Dec. 31, 1993, and annually thereafter, prior to repeal by Pub. L. 104–110, title II, §201(b), Feb. 13, 1996, 110 Stat. 770.

Expiration of Loan Benefit Entitlement of Certain World War II Veterans

Pub. L. 90–77, title IV, §403(c), Aug. 31, 1967, 81 Stat. 190, provided that the World War II loan benefit entitlement of any veteran whose period of entitlement as computed under former subsec. (a)(3)(A) of this section extended beyond July 25, 1967, was not to be deemed to expire earlier than ninety days after the effective date of section 403 of Pub. L. 90–77 [see section 405(a) of Pub. L. 90–77, set out as an Effective Date of 1967 Amendment note under section 101 of this title].

§3704. Restrictions on loans

(a) No loan for the purchase or construction of residential property shall be financed through the assistance of this chapter unless the property meets or exceeds minimum requirements for planning, construction, and general acceptability prescribed by the Secretary; however, this subsection shall not apply to a loan for the purchase of residential property on which construction is fully completed more than one year before such loan is made.

(b) Subject to notice and opportunity for a hearing, the Secretary may refuse to appraise any dwelling or housing project owned, sponsored, or to be constructed by any person identified with housing previously sold to veterans under this chapter as to which substantial deficiencies have been discovered, or as to which there has been a failure or indicated inability to discharge contractual liabilities to veterans, or as to which it is ascertained that the type of contract of sale or the methods or practices pursued in relation to the marketing of such properties were unfair or unduly prejudicial to veteran purchasers. The Secretary may also refuse to appraise any dwelling or housing project owned, sponsored, or to be constructed by any person refused the benefits of participation under the National Housing Act pursuant to a determination of the Secretary of Housing and Urban Development.

(c)(1) Except as provided in paragraph (2) of this subsection, no loan for the purchase or construction of residential property shall be financed through the assistance of this chapter unless the veteran applicant, at the time that the veteran applies for the loan, and also at the time that the loan is closed, certifies in such form as the Secretary may require, that the veteran intends to occupy the property as the veteran's home. Except as provided in paragraph (2) of this subsection, no loan for the repair, alteration, or improvement of residential property shall be financed through the assistance of the provisions of this chapter unless the veteran applicant, at the time that the veteran applies to the lender for the loan, and also at the time that the loan is closed, certifies, in such form as may be required by the Secretary, that the veteran occupies the property as the veteran's home. Notwithstanding the foregoing provisions of this subsection, in the case of a loan automatically guaranteed under this chapter, the veteran shall be required to make the certification only at the time the loan is closed. For the purposes of this chapter the requirement that the veteran recipient of a guaranteed or direct home loan must occupy or intend to occupy the property as the veteran's home means that the veteran as of the date of the veteran's certification actually lives in the property personally as the veteran's residence or actually intends upon completion of the loan and acquisition of the dwelling unit to move into the property personally within a reasonable time and to utilize such property as the veteran's residence. Notwithstanding the foregoing requirements of this subsection, the provisions for certification by the veteran at the time the veteran applies for the loan and at the time the loan is closed shall be considered to be satisfied if the Secretary finds that (1) in the case of a loan for repair, alteration, or improvement the veteran in fact did occupy the property at such times, or (2) in the case of a loan for construction or purchase the veteran intended to occupy the property as the veteran's home at such times and the veteran did in fact so occupy it when, or within a reasonable time after, the loan was closed.

(2) In any case in which a veteran is in active-duty status as a member of the Armed Forces and is unable to occupy a property because of such status, the occupancy requirements of this chapter shall be considered to be satisfied if—

(A) the spouse of the veteran occupies or intends to occupy the property as a home and the spouse makes the certification required by paragraph (1) of this subsection; or

(B) a dependent child of the veteran occupies or will occupy the property as a home and the veteran's attorney-in-fact or legal guardian of the dependent child makes the certification required by paragraph (1) of this subsection.


(d) Subject to notice and opportunity for a hearing, whenever the Secretary finds with respect to guaranteed or insured loans that any lender or holder has failed to maintain adequate loan accounting records, or to demonstrate proper ability to service loans adequately or to exercise proper credit judgment or has willfully or negligently engaged in practices otherwise detrimental to the interest of veterans or of the Government, the Secretary may refuse either temporarily or permanently to guarantee or insure any loans made by such lender or holder and may bar such lender or holder from acquiring loans guaranteed or insured under this chapter; however, the Secretary shall not refuse to pay a guaranty or insurance claim on loans theretofore entered into in good faith between a veteran and such lender. The Secretary may also refuse either temporarily or permanently to guarantee or insure any loans made by a lender or holder refused the benefits of participation under the National Housing Act pursuant to a determination of the Secretary of Housing and Urban Development.

(e) Any housing loan which is financed through the assistance of this chapter and to which section 3714 of this chapter applies shall include a provision that the loan is immediately due and payable upon transfer of the property securing such loan to any transferee unless the acceptability of the assumption of the loan is established pursuant to such section 3714.

(f) A loan for the purchase or construction of new residential property, the construction of which began after the energy efficiency standards under section 109 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12709), as amended by section 101(c) of the Energy Policy Act of 1992, take effect, may not be financed through the assistance of this chapter unless the new residential property is constructed in compliance with such standards.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1206, §1804; Pub. L. 86–73, §3, June 30, 1959, 73 Stat. 156; Pub. L. 86–665, §5, July 14, 1960, 74 Stat. 532; Pub. L. 89–117, title II, §217(b), Aug. 10, 1965, 79 Stat. 473; Pub. L. 90–19, §25(2), May 25, 1967, 81 Stat. 28; Pub. L. 91–506, §2(d), Oct. 23, 1970, 84 Stat. 1108; Pub. L. 93–569, §2(d), (e), Dec. 31, 1974, 88 Stat. 1863, 1864; Pub. L. 94–324, §7(7), (8), June 30, 1976, 90 Stat. 721; Pub. L. 97–295, §4(64), Oct. 12, 1982, 96 Stat. 1309; Pub. L. 100–198, §§8(a)(1), 10(b), Dec. 21, 1987, 101 Stat. 1319, 1323; Pub. L. 100–322, title IV, §415(c)(3), May 20, 1988, 102 Stat. 551; Pub. L. 101–237, title III, §313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered §3704 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 102–486, title I, §101(c)(2), Oct. 24, 1992, 106 Stat. 2787; Pub. L. 103–446, title IX, §903, Nov. 2, 1994, 108 Stat. 4676; Pub. L. 112–154, title II, §207, Aug. 6, 2012, 126 Stat. 1179.)

References in Text

The National Housing Act, referred to in subsecs. (b) and (d), is act June 27, 1934, ch. 847, 48 Stat. 1246, as amended, which is classified principally to chapter 13 (§1701 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see section 1701 of Title 12 and Tables.

Amendments

2012—Subsec. (c)(2). Pub. L. 112–154 amended par. (2) generally. Prior to amendment, par. (2) read as follows: "In any case in which a veteran is in active duty status as a member of the Armed Forces and is unable to occupy a property because of such status, the occupancy requirements of—

"(A) paragraph (1) of this subsection;

"(B) paragraphs (1) through (5) and paragraph (7) of section 3710(a) of this title;

"(C) section 3712(a)(5)(A)(i) of this title; and

"(D) section 3712(e)(5) of this title;

shall be considered to be satisfied if the spouse of the veteran occupies the property as the spouse's home and the spouse makes the certification required by paragraph (1) of this subsection."

1994—Subsecs. (e) to (g). Pub. L. 103–446 redesignated subsecs. (f) and (g) as (e) and (f), respectively, and struck out former subsec. (e) which read as follows: "No loan for the purchase or construction of new residential property (other than property served by a water and sewerage system approved by the Secretary of Housing and Urban Development pursuant to title X of the National Housing Act (12 U.S.C. 1749aa et seq.)) shall be financed through the assistance of this chapter, except pursuant to a commitment made prior to August 10, 1965, if such property is not served by a public or adequate community water and sewerage system and is located in an area where the appropriate local officials certify that the establishment of such systems is economically feasible. For purposes of this subsection, the economic feasibility of establishing public or adequate community water and sewerage systems shall be determined without regard to whether such establishment is authorized by law or is subject to approval by one or more local governments or public bodies."

1992—Subsec. (g). Pub. L. 102–486 added subsec. (g).

1991Pub. L. 102–83, §5(a), renumbered section 1804 of this title as this section.

Subsec. (c)(2). Pub. L. 102–83, §5(c)(1), substituted "3710(a)" for "1810(a)" in subpar. (B), "3712(a)(5)(A)(i)" for "1812(a)(5)(A)(i)" in subpar. (C), and "3712(e)(5)" for "1812(e)(5)" in subpar. (D).

Subsec. (f). Pub. L. 102–83, §5(c)(1), substituted "3714" for "1814" in two places.

1989—Subsecs. (a) to (c)(1), (d). Pub. L. 101–237 substituted "Secretary" for "Administrator" wherever appearing.

1988—Subsec. (c)(2)(C). Pub. L. 100–322, §415(c)(3)(A), substituted "1812(a)(5)(A)(i)" for "1819(a)(5)(A)(i)".

Subsec. (c)(2)(D). Pub. L. 100–322, §415(c)(3)(b), substituted "1812(e)(5)" for "1819(e)(5)".

Subsec. (f). Pub. L. 100–322, §415(c)(3)(C), substituted "section 1814" for "section 1817A" in two places.

1987—Subsec. (c). Pub. L. 100–198, §8(a), designated existing provision as par. (1), substituted "Except as provided in paragraph (2) of this subsection, no" for "No" in first and second sentences, and added par. (2).

Subsec. (f). Pub. L. 100–198, §10(b), added subsec. (f).

1982—Subsec. (e). Pub. L. 97–295 inserted "(12 U.S.C. 1749aa et seq.)" after "the National Housing Act", and substituted "August 10, 1965" for "the date of the enactment of the Housing and Urban Development Act of 1965".

1976—Subsec. (c). Pub. L. 94–324, §7(7), substituted "the veteran" for "he" in six places and "the veteran's" for "his" wherever appearing.

Subsec. (d). Pub. L. 94–324, §7(8), substituted "the Administrator may" for "he may".

1974—Subsec. (b). Pub. L. 93–569, §2(e), struck out "under section 512 of that Act" after "determination of the Secretary of Housing and Urban Development".

Subsec. (c). Pub. L. 93–569, §2(d), inserted provision that, the foregoing provisions notwithstanding, in the case of an automatically guaranteed loan, the veteran is required to make certification only at the time of loan closing.

Subsec. (d). Pub. L. 93–569, §2(e), struck out "under section 512 of that Act" after "determination of the Secretary of Housing and Urban Development".

1970—Subsec. (b). Pub. L. 91–506 substituted "Subject to notice and opportunity for a hearing, the" for "The".

Subsec. (d). Pub. L. 91–506 substituted "Subject to notice and opportunity for a hearing, whenever" for "Whenever".

1967—Subsecs. (b), (d), (e). Pub. L. 90–19 substituted "Secretary of Housing and Urban Development" for "Federal Housing Commissioner".

1965—Subsec. (e). Pub. L. 89–117 added subsec. (e).

1960—Subsec. (c). Pub. L. 86–665 inserted sentence respecting satisfaction of provisions for certification by the veteran at the time he applies for the loan and at the time the loan is closed.

1959—Subsec. (b). Pub. L. 86–73, §3(a), authorized the Administrator to refuse to appraise any property if the builder or sponsor of the property had been barred by the Federal Housing Commissioner from participation in the FHA insurance program.

Subsec. (d). Pub. L. 86–73, §3(b), authorized the Administrator to refuse to guarantee or insure loans if the lender or holder of the loans has been barred by the Federal Housing Commissioner from participation in the FHA insurance program.

Effective Date of 1987 Amendment

Pub. L. 100–198, §8(c), Dec. 21, 1987, 101 Stat. 1320, provided that: "The amendments made by this section [amending this section and sections 1810 and 1819 [now 3710 and 3712] of this title] shall apply with respect to loans made more than 30 days after the date of the enactment of this Act [Dec. 21, 1987]."

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–324 effective June 30, 1976, see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.

Effective Date of 1974 Amendment

Amendment by Pub. L. 93–569 effective Dec. 31, 1974, see section 10 of Pub. L. 93–569, set out as a note under section 3702 of this title.

§3705. Warranties

(a) The Secretary shall require that in connection with any property upon which there is located a dwelling designed principally for not more than a four-family residence and which is appraised for guaranty or insurance before the beginning of construction, the seller or builder, and such other person as may be required by the Secretary to become warrantor, shall deliver to the purchaser or owner of such property a warranty that the dwelling is constructed in substantial conformity with the plans and specifications (including any amendments thereof, or changes and variations therein, which have been approved in writing by the Secretary) on which the Secretary based the Secretary's valuation of the dwelling. The Secretary shall deliver to the builder, seller, or other warrantor the Secretary's written approval (which shall be conclusive evidence of such appraisal) of any amendment of, or change or variation in, such plans and specifications which the Secretary deems to be a substantial amendment thereof, or change or variation therein, and shall file a copy of such written approval with such plans and specifications. Such warranty shall apply only with respect to such instances of substantial nonconformity to such approved plans and specifications (including any amendments thereof, or changes or variations therein, which have been approved in writing, as provided in this section, by the Secretary) as to which the purchaser or home owner has given written notice to the warrantor within one year from the date of conveyance of title to, or initial occupancy of, the dwelling, whichever first occurs. Such warranty shall be in addition to, and not in derogation of, all other rights and privileges which such purchaser or owner may have under any other law or instrument. The provisions of this section shall apply to any such property covered by a mortgage insured or guaranteed by the Secretary on and after October 1, 1954, unless such mortgage is insured or guaranteed pursuant to a commitment therefor made before October 1, 1954.

(b) The Secretary shall permit copies of the plans and specifications (including written approvals of any amendments thereof, or changes or variations therein, as provided in this section) for dwellings in connection with which warranties are required by subsection (a) of this section to be made available in their appropriate local offices for inspection or for copying by any purchaser, home owner, or warrantor during such hours or periods of time as the Secretary may determine to be reasonable.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1206, §1805; Pub. L. 94–324, §7(9), June 30, 1976, 90 Stat. 721; Pub. L. 101–237, title III, §313(b)(1), Dec. 18, 1989, 103 Stat. 2077; Pub. L. 102–54, §15(a)(1), June 13, 1991, 105 Stat. 288; renumbered §3705, Pub. L. 102–83, §5(a), Aug. 6, 1991, 105 Stat. 406; Pub. L. 103–446, title XII, §1202(a)(2), Nov. 2, 1994, 108 Stat. 4689.)

Amendments

1994—Subsec. (a). Pub. L. 103–446 made technical correction to directory language of Pub. L. 102–54, §15(a)(1)(A). See 1991 Amendment note below.

1991Pub. L. 102–83, §5(a), renumbered section 1805 of this title as this section.

Subsec. (a). Pub. L. 102–54, §15(a)(1)(B), substituted "appraisal)" for "approval)" in second sentence.

Pub. L. 102–54, §15(a)(1)(A), as amended by Pub. L. 103–446, substituted "appraised" for "approved" before "for guaranty" in first sentence.

1989Pub. L. 101–237 substituted "Secretary" and "Secretary's" for "Administrator" and "Administrator's", respectively, wherever appearing.

1976—Subsec. (a). Pub. L. 94–324 substituted "the Administrator's" for "his" wherever appearing.

Effective Date of 1994 Amendment

Pub. L. 103–446, title XII, §1202(a), Nov. 2, 1994, 108 Stat. 4689, provided that the amendment made by that section is effective June 13, 1991, and as if included in the enactment of Pub. L. 102–54.

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–324 effective June 30, 1976, see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.

§3706. Escrow of deposits and downpayments

(a) Any deposit or downpayment made by an eligible veteran in connection with the purchase of proposed or newly constructed and previously unoccupied residential property in a project on which the Secretary has issued a Certificate of Reasonable Value, which purchase is to be financed with a loan guaranteed, insured, or made under the provisions of this chapter, shall be deposited forthwith by the seller, or the agent of the seller, receiving such deposit or payment, in a trust account to safeguard such deposit or payment from the claims of creditors of the seller. The failure of the seller or the seller's agent to create such trust account and to maintain it until the deposit or payment has been disbursed for the benefit of the veteran purchaser at settlement or, if the transaction does not materialize, is otherwise disposed of in accordance with the terms of the contract, may constitute an unfair marketing practice within the meaning of section 3704(b) of this title.

(b) If an eligible veteran contracts for the construction of a property in a project on which the Secretary has issued a Certificate of Reasonable Value and such construction is to be financed with the assistance of a construction loan to be guaranteed, insured, or made under the provisions of this chapter, it may be considered an unfair marketing practice under section 3704(b) of this title if any deposit or downpayment of the veteran is not maintained in a special trust account by the recipient until it is either (1) applied on behalf of the veteran to the cost of the land or to the cost of construction or (2), if the transaction does not materialize, is otherwise disposed of in accordance with the terms of the contract.

(Added Pub. L. 86–665, §6(a), July 14, 1960, 74 Stat. 532, §1806; amended Pub. L. 94–324, §7(10), June 30, 1976, 90 Stat. 721; Pub. L. 101–237, title III, §313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered §3706 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 103–446, title XII, §1201(e)(13), Nov. 2, 1994, 108 Stat. 4685.)

Amendments

1994Pub. L. 103–446, which directed the substitution of "of this title" for "of this chapter" the second and third places appearing, was executed by making the substitution the second and fourth places appearing to reflect the probable intent of Congress.

1991Pub. L. 102–83, §5(a), renumbered section 1806 of this title as this section.

Pub. L. 102–83, §5(c)(1), substituted "3704(b)" for "1804(b)" in subsecs. (a) and (b).

1989Pub. L. 101–237 substituted "Secretary" for "Administrator" wherever appearing.

1976—Subsec. (a). Pub. L. 94–324 substituted "the seller's" for "his".

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–324 effective June 30, 1976, see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.

§3707. Adjustable rate mortgages

(a) 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.

(b) Interest rate adjustment provisions of a mortgage guaranteed under this section shall—

(1) 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;

(2) be made by adjusting the monthly payment on an annual basis;

(3) be limited, with respect to any single annual interest rate adjustment, to a maximum increase or decrease of 1 percentage point; and

(4) be limited, over the term of the mortgage, to a maximum increase of 5 percentage points above the initial contract interest rate.


(c) The Secretary shall promulgate underwriting standards for loans guaranteed under this section, taking into account—

(1) 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;

(2) the maximum and likely amounts of increases in mortgage payments that the loans would require;

(3) the underwriting standards applicable to adjustable rate mortgages insured under title II of the National Housing Act; and

(4) such other factors as the Secretary finds appropriate.


(d) 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.

(Added Pub. L. 102–547, §3(a)(1), Oct. 28, 1992, 106 Stat. 3634; amended Pub. L. 103–78, §7, Aug. 13, 1993, 107 Stat. 769; Pub. L. 108–454, title IV, §404, Dec. 10, 2004, 118 Stat. 3616; Pub. L. 110–389, title V, §505(a), Oct. 10, 2008, 122 Stat. 4176; Pub. L. 112–154, title II, §208, Aug. 6, 2012, 126 Stat. 1179.)

References in Text

The National Housing Act, referred to in subsecs. (a) and (c)(3), is act June 27, 1934, ch. 847, 48 Stat. 1246. Title II of the Act is classified generally to subchapter II (§1707 et seq.) of chapter 13 of Title 12, Banks and Banking. Section 251 of the Act is classified to section 1715z–16 of Title 12. For complete classification of this Act to the Code, see section 1701 of Title 12 and Tables.

Amendments

2012—Subsec. (a). Pub. L. 112–154 substituted "project under this section" for "demonstration project under this section during fiscal years 1993 through 2012".

2008—Subsec. (a). Pub. L. 110–389 substituted "2012" for "2008".

2004—Subsec. (a). Pub. L. 108–454 substituted "during fiscal years 1993 through 2008" for "during fiscal years 1993, 1994, and 1995".

1993—Subsec. (b)(2). Pub. L. 103–78 struck out before semicolon at end "on the anniversary of the date on which the loan was closed".

Annual Report on Document Disclosure and Consumer Education

Pub. L. 115–174, title III, §309(d), May 24, 2018, 132 Stat. 1351, provided that: "Not less frequently than once each year, the Secretary of Veterans Affairs shall issue a publicly available report that—

"(1) examines, with respect to loans provided to veterans under chapter 37 of title 38, United States Code

"(A) the refinancing of fixed-rate mortgage loans to adjustable rate mortgage loans;

"(B) whether veterans are informed of the risks and disclosures associated with that refinancing; and

"(C) whether advertising materials for that refinancing are clear and do not contain misleading statements or assertions; and

"(2) includes findings based on any complaints received by veterans and on an ongoing assessment of the refinancing market by the Secretary."

Annual Reports on Adjustable Rate Mortgages Guaranteed Under This Section

Section 3(b) of Pub. L. 102–547 directed Secretary of Veterans Affairs to transmit adjustable rate mortgage report to Committees on Veterans' Affairs of Senate and House of Representatives no later than Dec. 31, 1993, containing description of project carried out under this section and thereafter to transmit annual reports to such committees with respect to default rates and other information concerning loans guaranteed under this section prior to repeal by Pub. L. 104–110, title II, §201(b), Feb. 13, 1996, 110 Stat. 770.

§3707A. Hybrid adjustable rate mortgages

(a) 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 in accordance with the provisions of this section with respect to hybrid adjustable rate mortgages described in subsection (b).

(b) Adjustable rate mortgages that are guaranteed under this section shall be adjustable rate mortgages (commonly referred to as "hybrid adjustable rate mortgages") having interest rate adjustment provisions that—

(1) specify an initial rate of interest that is fixed for a period of not less than the first three years of the mortgage term;

(2) provide for an initial adjustment in the rate of interest by the mortgagee at the end of the period described in paragraph (1); and

(3) comply in such initial adjustment, and any subsequent adjustment, with subsection (c).


(c) Interest rate adjustment provisions of a mortgage guaranteed under this section shall—

(1) 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;

(2) be made by adjusting the monthly payment on an annual basis;

(3) in the case of the initial contract interest rate adjustment—

(A) if the initial contract interest rate remained fixed for less than 5 years, be limited to a maximum increase or decrease of 1 percentage point; or

(B) if the initial contract interest rate remained fixed for 5 years or more, be limited to a maximum increase or decrease of such percentage point or points as the Secretary may prescribe;


(4) in the case of any single annual interest rate adjustment after the initial contract interest rate adjustment, be limited to a maximum increase or decrease of such percentage points as the Secretary may prescribe; and

(5) be limited, over the term of the mortgage, to a maximum increase of such number of percentage points as the Secretary shall prescribe for purposes of this section.


(d) The Secretary shall promulgate underwriting standards for loans guaranteed under this section, taking into account—

(1) the status of the interest rate index referred to in subsection (c)(1) and available at the time an underwriting decision is made, regardless of the actual initial rate offered by the lender;

(2) the maximum and likely amounts of increases in mortgage payments that the loans would require;

(3) the underwriting standards applicable to adjustable rate mortgages insured under title II of the National Housing Act; and

(4) such other factors as the Secretary finds appropriate.


(e) 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.

(Added Pub. L. 107–330, title III, §303(a), Dec. 6, 2002, 116 Stat. 2825; amended Pub. L. 108–454, title IV, §405(a), (b), Dec. 10, 2004, 118 Stat. 3616; Pub. L. 109–233, title I, §102, June 15, 2006, 120 Stat. 399; Pub. L. 110–389, title V, §505(b), Oct. 10, 2008, 122 Stat. 4176; Pub. L. 112–154, title II, §209, Aug. 6, 2012, 126 Stat. 1179.)

References in Text

The National Housing Act, referred to in subsecs. (a) and (d)(3), is act June 27, 1934, ch. 847, 48 Stat. 1246, as amended. Title II of the Act is classified generally to subchapter II (§1707 et seq.) of chapter 13 of Title 12, Banks and Banking. Section 251 of the Act is classified to section 1715z–16 of Title 12. For complete classification of this Act to the Code, see section 1701 of Title 12 and Tables.

Amendments

2012—Subsec. (a). Pub. L. 112–154 substituted "project under this section" for "demonstration project under this section during fiscal years 2004 through 2012".

2008—Subsec. (a). Pub. L. 110–389 substituted "2012" for "2008".

2006—Subsec. (c)(4). Pub. L. 109–233 substituted "such percentage points as the Secretary may prescribe" for "1 percentage point".

2004—Subsec. (a). Pub. L. 108–454, §405(a), substituted "during fiscal years 2004 through 2008" for "during fiscal years 2004 and 2005".

Subsec. (c)(3). Pub. L. 108–454, §405(b)(2), added par. (3) and struck out former par. (3) which read as follows: "be limited, with respect to any single annual interest rate adjustment, to a maximum increase or decrease of 1 percentage point; and".

Subsec. (c)(4). Pub. L. 108–454, §405(b)(2), added par. (4). Former par. (4) redesignated (5).

Subsec. (c)(5). Pub. L. 108–454, §405(b)(1), (3), redesignated par. (4) as (5) and substituted "such number of percentage points as the Secretary shall prescribe for purposes of this section" for "5 percentage points above the initial contract interest rate".

No Effect on Guarantee of Loans Under Hybrid Adjustable Rate Mortgage Guarantee Demonstration Project

Pub. L. 108–454, title IV, §405(c), Dec. 10, 2004, 118 Stat. 3616, provided that: "The amendments made by this section [amending this section] shall not be construed to affect the force or validity of any guarantee of a loan made by the Secretary of Veterans Affairs under the demonstration project for the guarantee of hybrid adjustable rate mortgages under section 3707A of title 38, United States Code, as in effect on the day before the date of the enactment of this Act [Dec. 10, 2004]."

§3708. Authority to buy down interest rates: pilot program

(a) In order to enable the purchase of housing in areas where the supply of suitable military housing is inadequate, the Secretary may conduct a pilot program under which the Secretary may make periodic or lump sum assistance payments on behalf of an eligible veteran for the purpose of buying down the interest rate on a loan to that veteran that is guaranteed under this chapter for a purpose described in paragraph (1), (6), or (10) of section 3710(a) of this title.

(b) An individual is an eligible veteran for the purposes of this section if—

(1) the individual is a veteran, as defined in section 3701(b)(4) of this title;

(2) the individual submits an application for a loan guaranteed under this chapter within one year of an assignment of the individual to duty at a military installation in the United States designated by the Secretary of Defense as a housing shortage area;

(3) at the time the loan referred to in subsection (a) is made, the individual is an enlisted member, warrant officer, or an officer (other than a warrant officer) at a pay grade of O–3 or below;

(4) the individual has not previously used any of the individual's entitlement to housing loan benefits under this chapter; and

(5) the individual receives comprehensive prepurchase counseling from the Secretary (or the designee of the Secretary) before making application for a loan guaranteed under this chapter.


(c) Loans with respect to which the Secretary may exercise the buy down authority under subsection (a) shall—

(1) provide for a buy down period of not more than three years in duration;

(2) specify the maximum and likely amounts of increases in mortgage payments that the loans would require; and

(3) be subject to such other terms and conditions as the Secretary may prescribe by regulation.


(d) The Secretary shall promulgate underwriting standards for loans for which the interest rate assistance payments may be made under subsection (a). Such standards shall be based on the interest rate for the second year of the loan.

(e) The Secretary or lender shall provide comprehensive prepurchase counseling to eligible veterans explaining the features of interest rate buy downs under subsection (a), including a hypothetical payment schedule that displays the increases in monthly payments to the mortgagor over the first five years of the mortgage term. For the purposes of this subsection, the Secretary may assign personnel to military installations referred to in subsection (b)(2).

(f) There is authorized to be appropriated $3,000,000 annually to carry out this section.

(g) The Secretary may not guarantee a loan under this chapter after September 30, 1998, on which the Secretary is obligated to make payments under this section.

(Added Pub. L. 104–106, div. B, title XXVIII, §2822(b)(1), Feb. 10, 1996, 110 Stat. 556.)

Authority of Secretary of Defense

Pub. L. 104–106, div. B, title XXVIII, §2822(c), Feb. 10, 1996, 110 Stat. 557, directed the Secretary of Defense to reimburse the Secretary of Veterans Affairs for interest rate buy down costs paid to mortgagees under this section and authorized the Secretary of Defense to designate housing shortage areas with respect to housing loans guaranteed on or before Sept. 30, 1998.

§3709. Refinancing of housing loans

(a) Fee Recoupment.—Except as provided in subsection (d) and notwithstanding section 3703 of this title or any other provision of law, a loan to a veteran for a purpose specified in section 3710 of this title that is being refinanced may not be guaranteed or insured under this chapter unless—

(1) the issuer of the refinanced loan provides the Secretary with a certification of the recoupment period for fees, closing costs, and any expenses (other than taxes, amounts held in escrow, and fees paid under this chapter) that would be incurred by the borrower in the refinancing of the loan;

(2) all of the fees and incurred costs are scheduled to be recouped on or before the date that is 36 months after the date of loan issuance; and

(3) the recoupment is calculated through lower regular monthly payments (other than taxes, amounts held in escrow, and fees paid under this chapter) as a result of the refinanced loan.


(b) Net Tangible Benefit Test.—Except as provided in subsection (d) and notwithstanding section 3703 of this title or any other provision of law, a loan to a veteran for a purpose specified in section 3710 of this title that is refinanced may not be guaranteed or insured under this chapter unless—

(1) the issuer of the refinanced loan provides the borrower with a net tangible benefit test;

(2) in a case in which the original loan had a fixed rate mortgage interest rate and the refinanced loan will have a fixed rate mortgage interest rate, the refinanced loan has a mortgage interest rate that is not less than 50 basis points less than the previous loan;

(3) in a case in which the original loan had a fixed rate mortgage interest rate and the refinanced loan will have an adjustable rate mortgage interest rate, the refinanced loan has a mortgage interest rate that is not less than 200 basis points less than the previous loan; and

(4) the lower interest rate is not produced solely from discount points, unless—

(A) such points are paid at closing; and

(B) such points are not added to the principal loan amount, unless—

(i) for discount point amounts that are less than or equal to one discount point, the resulting loan balance after any fees and expenses allows the property with respect to which the loan was issued to maintain a loan to value ratio of 100 percent or less; and

(ii) for discount point amounts that are greater than one discount point, the resulting loan balance after any fees and expenses allows the property with respect to which the loan was issued to maintain a loan to value ratio of 90 percent or less.


(c) Loan Seasoning.—Except as provided in subsection (d) and notwithstanding section 3703 of this title or any other provision of law, a loan to a veteran for a purpose specified in section 3710 of this title that is refinanced may not be guaranteed or insured under this chapter until the date that is the later of—

(1) the date that is 210 days after the date on which the first monthly payment is made on the loan; and

(2) the date on which the sixth monthly payment is made on the loan.


(d) Cash-out Refinances.—(1) Subsections (a) through (c) shall not apply in a case of a loan refinancing in which the amount of the principal for the new loan to be guaranteed or insured under this chapter is larger than the payoff amount of the refinanced loan.

(2) Not later than 180 days after the date of the enactment of this section, the Secretary shall promulgate such rules as the Secretary considers appropriate with respect to refinancing described in paragraph (1) to ensure that such refinancing is in the financial interest of the borrower, including rules relating to recoupment, seasoning, and net tangible benefits.

(Added Pub. L. 115–174, title III, §309(a)(1), May 24, 2018, 132 Stat. 1348.)

References in Text

The date of the enactment of this section, referred to in subsec. (d)(2), is the date of enactment of Pub. L. 115–174, which was approved May 24, 2018.

Regulations

Pub. L. 115–174, title III, §309(a)(2), May 24, 2018, 132 Stat. 1349, provided that:

"(A) In general.—In prescribing any regulation to carry out section 3709 of title 38, United States Code, as added by paragraph (1), the Secretary of Veterans Affairs may waive the requirements of sections 551 through 559 of title 5, United States Code, if—

"(i) the Secretary determines that urgent or compelling circumstances make compliance with such requirements impracticable or contrary to the public interest;

"(ii) the Secretary submits to the Committee on Veterans' Affairs of the Senate and the Committee on Veterans' Affairs of the House of Representatives, and publishes in the Federal Register, notice of such waiver, including a description of the determination made under clause (i); and

"(iii) a period of 10 days elapses following the notification under clause (ii).

"(B) Public notice and comment.—If a regulation prescribed pursuant to a waiver made under subparagraph (A) is in effect for a period exceeding 1 year, the Secretary shall provide the public an opportunity for notice and comment regarding such regulation.

"(C) Effective date.—This paragraph shall take effect on the date of the enactment of this Act [May 24, 2018].

"(D) Termination date.—The authorities under this paragraph shall terminate on the date that is 1 year after the date of the enactment of this Act."

SUBCHAPTER II—LOANS

§3710. Purchase or construction of homes

(a) Except as provided in section 3704(c)(2) of this title, any loan to a veteran, if made pursuant to the provisions of this chapter, is automatically guaranteed if such loan is for one or more of the following purposes:

(1) To purchase or construct a dwelling to be owned and occupied by the veteran as a home.

(2) To purchase a farm on which there is a farm residence to be owned and occupied by the veteran as the veteran's home.

(3) To construct on land owned by the veteran a farm residence to be occupied by the veteran as the veteran's home.

(4) To repair, alter, or improve a farm residence or other dwelling owned by the veteran and occupied by the veteran as the veteran's home.

(5) To refinance existing mortgage loans or other liens which are secured of record on a dwelling or farm residence owned and occupied by the veteran as the veteran's home.

(6) To purchase a one-family residential unit in a condominium housing development or project, if such development or project is approved by the Secretary under criteria which the Secretary shall prescribe in regulations.

(7) To improve a dwelling or farm residence owned by the veteran and occupied by the veteran as the veteran's home through energy efficiency improvements, as provided in subsection (d).

(8) To refinance in accordance with subsection (e) of this section an existing loan guaranteed, insured, or made under this chapter.

(9)(A)(i) To purchase a manufactured home to be permanently affixed to a lot that is owned by the veteran.

(ii) To purchase a manufactured home and a lot to which the home will be permanently affixed.

(B)(i) To refinance, in accordance with the terms and conditions applicable under the provisions of subsection (e) of this section (other than paragraph (1)(E) of such subsection) to the guaranty of a loan for the purpose specified in clause (8) of this subsection, an existing loan guaranteed, insured, or made under this chapter that is secured by a manufactured home permanently affixed to a lot that is owned by the veteran.

(ii) To refinance, in accordance with section 3712(a)(5) of this title, an existing loan that was made for the purchase of, and that is secured by, a manufactured home that is permanently affixed to a lot and to purchase the lot to which the manufactured home is affixed.

(10) To purchase a dwelling to be owned and occupied by the veteran as a home and make energy efficiency improvements, as provided in subsection (d).

(11) To refinance in accordance with subsection (e) an existing loan guaranteed, insured, or made under this chapter, and to improve the dwelling securing such loan through energy efficiency improvements, as provided in subsection (d).

(12) With respect to a loan guaranteed after the date of the enactment of this paragraph and before the date that is five years after that date, to purchase stock or membership in a cooperative housing corporation for the purpose of entitling the veteran to occupy for dwelling purposes a single family residential unit in a development, project, or structure owned or leased by such corporation, in accordance with subsection (h).


If there is an indebtedness which is secured by a lien against land owned by the veteran, the proceeds of a loan guaranteed under this section or made under section 3711 of this title for construction of a dwelling or farm residence on such land may be used also to liquidate such lien, but only if the reasonable value of the land is equal to or greater than the amount of the lien.

(b) No loan may be guaranteed under this section or made under section 3711 of this title unless—

(1) the proceeds of such loan will be used to pay for the property purchased, constructed, or improved;

(2) the contemplated terms of payment required in any mortgage to be given in part payment of the purchase price or the construction cost bear a proper relation to the veteran's present and anticipated income and expenses;

(3) the veteran is a satisfactory credit risk, as determined in accordance with the credit underwriting standards established pursuant to subsection (g) of this section;

(4) the nature and condition of the property is such as to be suitable for dwelling purposes;

(5) except in the case of a loan described in clause (7) or (8) of this subsection, the loan to be paid by the veteran for such property or for the cost of construction, repairs, or alterations, does not exceed the reasonable value thereof as determined pursuant to section 3731 of this title;

(6) if the loan is for repair, alteration, or improvement of property, such repair, alteration, or improvement substantially protects or improves the basic livability or utility of such property;

(7) in the case of a loan (other than a loan made for a purpose specified in subsection (a)(8) of this section) that is made to refinance—

(A) a construction loan,

(B) an installment land sales contract, or

(C) a loan assumed by the veteran that provides for a lower interest rate than the loan being refinanced,


the amount of the loan to be guaranteed or made does not exceed the lesser of—

(i) the reasonable value of the dwelling or farm residence securing the loan, as determined pursuant to section 3731 of this title; or

(ii) the sum of the outstanding balance on the loan to be refinanced and the closing costs (including discounts) actually paid by the veteran, as specified by the Secretary in regulations; and


(8) in the case of a loan to refinance a loan (other than a loan or installment sales contract described in clause (7) of this subsection or a loan made for a purpose specified in subsection (a)(8) of this section), the amount of the loan to be guaranteed or made does not exceed 100 percent of the reasonable value of the dwelling or farm residence securing the loan, as determined pursuant to section 3731 of this title.


[(c) Repealed. Pub. L. 100–198, §3(a)(2), Dec. 21, 1987, 101 Stat. 1315.]

(d)(1) The Secretary shall carry out a program to demonstrate the feasibility of guaranteeing loans for the acquisition of an existing dwelling and the cost of making energy efficiency improvements to the dwelling or for energy efficiency improvements to a dwelling owned and occupied by a veteran. A loan may be guaranteed under this subsection only if it meets the requirements of this chapter, except as those requirements are modified by this subsection.

(2) The cost of energy efficiency measures that may be financed by a loan guaranteed under this section may not exceed the greater of—

(A) the cost of the energy efficiency improvements, up to $3,000; or

(B) $6,000, if the increase in the monthly payment for principal and interest does not exceed the likely reduction in monthly utility costs resulting from the energy efficiency improvements.


(3) Notwithstanding the provisions of section 3703(a)(1)(A) of this title, any loan guaranteed under this subsection shall be guaranteed in an amount equal to the sum of—

(A) the guaranty that would be provided under those provisions for the dwelling without the energy efficiency improvements; and

(B) an amount that bears the same relation to the cost of the energy efficiency improvements as the guaranty referred to in subparagraph (A) bears to the amount of the loan minus the cost of such improvements.


(4) The amount of the veteran's entitlement, calculated in accordance with section 3703(a)(1)(B) of this title, shall not be affected by the amount of the guaranty referred to in paragraph (3)(B).

(5) The Secretary shall take appropriate actions to notify eligible veterans, participating lenders, and interested realtors of the availability of loan guarantees under this subsection and the procedures and requirements that apply to the obtaining of such guarantees.

(6) For the purposes of this subsection:

(A) The term "energy efficiency improvement" includes a solar heating system, a solar heating and cooling system, or a combined solar heating and cooling system, and the application of a residential energy conservation measure.

(B) The term "solar heating" has the meaning given such term in section 3(1) of the Solar Heating and Cooling Demonstration Act of 1974 (42 U.S.C. 5502(1)) and, in addition, includes a passive system based on conductive, convective, or radiant energy transfer.

(C) The terms "solar heating and cooling" and "combined solar heating and cooling" have the meaning given such terms in section 3(2) of the Solar Heating and Cooling Demonstration Act of 1974 (42 U.S.C. 5502(2)) and, in addition, include a passive system based on conductive, convective, or radiant energy transfer.

(D) The term "passive system" includes window and skylight glazing, thermal floors, walls, and roofs, movable insulation panels (when in conjunction with glazing), portions of a residential structure that serve as solar furnaces so as to add heat to the structure, double-pane window insulation, and such other energy-related components as are determined by the Secretary to enhance the natural transfer of energy for the purpose of heating or heating and cooling a residence.

(E) The term "residential energy conservation measure" means—

(i) caulking and weatherstripping of all exterior doors and windows;

(ii) furnace efficiency modifications limited to—

(I) replacement burners, boilers, or furnaces designed to reduce the firing rate or to achieve a reduction in the amount of fuel consumed as a result of increased combustion efficiency,

(II) devices for modifying flue openings which will increase the efficiency of the heating system, and

(III) electrical or mechanical furnace ignition systems which replace standing gas pilot lights;


(iii) clock thermostats;

(iv) ceiling, attic, wall, and floor insulation;

(v) water heater insulation;

(vi) storm windows and doors;

(vii) heat pumps; and

(viii) such other energy conservation measures as the Secretary may identify for the purposes of this subparagraph.


(e)(1) For a loan to be guaranteed for the purpose specified in subsection (a)(8) or for the purpose specified in subsection (a)(11) of this section—

(A) the interest rate of the loan must be less than the interest rate of the loan being refinanced or, in a case in which the loan is a fixed rate loan and the loan being refinanced is an adjustable rate loan, the loan bears interest at a rate that is agreed upon by the veteran and the mortgagee;

(B) the loan must be secured by the same dwelling or farm residence as was the loan being refinanced;

(C) the amount of the loan may not exceed—

(i) an amount equal to the sum of the balance of the loan being refinanced and such closing costs (including any discount permitted pursuant to section 3703(c)(3)(A) of this title) as may be authorized by the Secretary (under regulations which the Secretary shall prescribe) to be included in the loan; or

(ii) in the case of a loan for the purpose specified in subsection (a)(11), an amount equal to the sum of the amount referred to with respect to the loan under clause (i) and the amount specified under subsection (d)(2);


(D) notwithstanding section 3703(a)(1) of this title, the amount of the guaranty of the loan may not exceed the greater of (i) the original guaranty amount of the loan being refinanced, or (ii) 25 percent of the loan;

(E) the term of the loan may not exceed the original term of the loan being refinanced by more than 10 years; and

(F) the veteran must own the dwelling or farm residence securing the loan and—

(i) must occupy such dwelling or residence as such veteran's home;

(ii) must have previously occupied such dwelling or residence as such veteran's home and must certify, in such form as the Secretary shall require, that the veteran has previously so occupied such dwelling or residence; or

(iii) in any case in which a veteran is in active duty status as a member of the Armed Forces and is unable to occupy such residence or dwelling as a home because of such status, the spouse of the veteran must occupy, or must have previously occupied, such dwelling or residence as such spouse's home and must certify such occupancy in such form as the Secretary shall require.


(2) A loan to a veteran may be guaranteed by the Secretary under this chapter for the purpose specified in clause (8) of subsection (a) of this section without regard to the amount of outstanding guaranty entitlement available for use by such veteran, and the amount of such veteran's guaranty entitlement shall not be charged as a result of any guaranty provided for such purpose. For purposes of section 3702(b) of this title, such loan shall be deemed to have been obtained with the guaranty entitlement used to obtain the loan being refinanced.

(3) If a veteran is deceased and if such veteran's surviving spouse was a co-obligor under an existing loan guaranteed, insured, or made under this chapter, such surviving spouse shall, only for the purpose specified in subsection (a)(8) of this section, be deemed to be a veteran eligible for benefits under this chapter.

(f)(1) For a loan to be guaranteed for the purpose specified in subclause (A)(ii) or (B)(ii) of subsection (a)(9) of this section, the purchase of (or the refinancing of a loan secured by) the manufactured home and the lot for that home shall be considered as one loan and must comply with such criteria as may be prescribed by the Secretary in regulations.

(2) A loan may not be guaranteed for the purposes of subsection (a)(9) of this section unless the manufactured home purchased, upon being permanently affixed to the lot, is considered to be real property under the laws of the State where the lot is located.

(g)(1) For the purposes of this subsection, the term "veteran", when used with respect to a loan guaranteed or to be guaranteed under this chapter, includes the veteran's spouse if the spouse is jointly liable with the veteran under the loan.

(2) For the purpose of determining whether a veteran meets the standards referred to in subsection (b)(3) of this section and section 3712(e)(2) of this title, the Secretary shall prescribe regulations which establish—

(A) credit underwriting standards to be used in evaluating loans to be guaranteed under this chapter; and

(B) standards to be used by lenders in obtaining credit information and processing loans to be guaranteed under this chapter.


(3) In the regulations prescribed under paragraph (2) of this subsection, the Secretary shall establish standards that include—

(A) debt-to-income ratios to apply in the case of the veteran applying for the loan;

(B) criteria for evaluating the reliability and stability of the income of the veteran applying for the loan; and

(C) procedures for ascertaining the monthly income required by the veteran to meet the anticipated loan payment terms.


If the procedures described in clause (C) of this paragraph include standards for evaluating residual income, the Secretary shall, in establishing such standards, give appropriate consideration to State statistics (in States as to which the Secretary determines that such statistics are reliable) pertinent to residual income and the cost of living in the State in question rather than in a larger region.

(4)(A) Any lender making a loan under this chapter shall certify, in such form as the Secretary shall prescribe, that the lender has complied with the credit information and loan processing standards established under paragraph (2)(B) of this subsection, and that, to the best of the lender's knowledge and belief, the loan meets the underwriting standards established under paragraph (2)(A) of this subsection.

(B) Any lender who knowingly and willfully makes a false certification under subparagraph (A) of this paragraph shall be liable to the United States Government for a civil penalty equal to two times the amount of the Secretary's loss on the loan involved or to another appropriate amount, not to exceed $10,000, whichever is greater. All determinations necessary to carry out this subparagraph shall be made by the Secretary.

(5) Pursuant to regulations prescribed to carry out this paragraph, the Secretary may, in extraordinary situations, waive the application of the credit underwriting standards established under paragraph (2) of this subsection when the Secretary determines, considering the totality of circumstances, that the veteran is a satisfactory credit risk.

(h)(1) A loan may not be guaranteed under subsection (a)(12) unless—

(A) the development, project, or structure of the cooperative housing corporation complies with such criteria as the Secretary prescribes in regulations; and

(B) the dwelling unit that the purchase of stock or membership in the development, project, or structure of the cooperative housing corporation entitles the purchaser to occupy is a single family residential unit.


(2) In this subsection, the term "cooperative housing corporation" has the meaning given such term in section 216(b)(1) of the Internal Revenue Code of 1986.

(3) When applying the term "value of the property" to a loan guaranteed under subsection (a)(12), such term means the appraised value of the stock or membership entitling the purchaser to the permanent occupancy of the dwelling unit in the development, project, or structure of the cooperative housing corporation.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1207, §1810; Pub. L. 90–301, §§1(a), 2(a), May 7, 1968, 82 Stat. 113; Pub. L. 91–506, §3, Oct. 23, 1970, 84 Stat. 1108; Pub. L. 93–569, §3, Dec. 31, 1974, 88 Stat. 1864; Pub. L. 94–324, §7(11), June 30, 1976, 90 Stat. 721; Pub. L. 95–476, title I, §§104, 105(a), Oct. 18, 1978, 92 Stat. 1498, 1499; Pub. L. 96–385, title IV, §§401(a), 402(a), Oct. 7, 1980, 94 Stat. 1532, 1533; Pub. L. 98–223, title II, §205(a), Mar. 2, 1984, 98 Stat. 42; Pub. L. 99–576, title IV, §402(a), (b), Oct. 28, 1986, 100 Stat. 3280; Pub. L. 100–198, §§3(a)(2), 7(a), (c), 8(a)(2), 11(b), 13, Dec. 21, 1987, 101 Stat. 1315, 1318-1320, 1325; Pub. L. 100–322, title IV, §415(c)(4), May 20, 1988, 102 Stat. 551; Pub. L. 101–237, title III, §§309, 313(b)(1), Dec. 18, 1989, 103 Stat. 2075, 2077; renumbered §3710 and amended Pub. L. 102–83, §§4(a)(2)(A)(iv), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 403, 406; Pub. L. 102–547, §§6(1), 9(a), (b), Oct. 28, 1992, 106 Stat. 3636, 3641, 3642; Pub. L. 103–446, title IX, §§904(a), (b), 905, Nov. 2, 1994, 108 Stat. 4676, 4677; Pub. L. 104–110, title I, §101(e), Feb. 13, 1996, 110 Stat. 768; Pub. L. 109–461, title V, §501, Dec. 22, 2006, 120 Stat. 3431; Pub. L. 110–389, title V, §504(b), Oct. 10, 2008, 122 Stat. 4176.)

References in Text

The date of the enactment of this paragraph, referred to in subsec. (a)(12), is the date of enactment of Pub. L. 109–461, which was approved Dec. 22, 2006.

Section 216(b)(1) of the Internal Revenue Code of 1986, referred to in subsec. (h)(2), is classified to section 216(b)(1) of Title 26, Internal Revenue Code.

Codification

Another section 11(b) of Pub. L. 100–198 amended section 1831 [now 3731] of this title.

Amendments

2008—Subsec. (b)(8). Pub. L. 110–389 substituted "100 percent" for "90 percent".

2006—Subsec. (a)(12). Pub. L. 109–461, §501(a), added par. (12).

Subsec. (h). Pub. L. 109–461, §501(b), added subsec. (h).

1996—Subsec. (d)(7). Pub. L. 104–110 struck out par. (7) which read as follows: "A loan may not be guaranteed under this subsection after December 31, 1995."

1994—Subsec. (a)(11). Pub. L. 103–446, §904(a), added par. (11).

Subsec. (e)(1). Pub. L. 103–446, §904(b)(1), inserted "or for the purpose specified in subsection (a)(11)" after "subsection (a)(8)" in introductory provisions.

Subsec. (e)(1)(A). Pub. L. 103–446, §905, inserted before semicolon at end "or, in a case in which the loan is a fixed rate loan and the loan being refinanced is an adjustable rate loan, the loan bears interest at a rate that is agreed upon by the veteran and the mortgagee".

Subsec. (e)(1)(C). Pub. L. 103–446, §904(b)(2), substituted "may not exceed—" and cls. (i) and (ii) for "may not exceed an amount equal to the sum of the balance of the loan being refinanced and such closing costs (including any discount permitted pursuant to section 3703(c)(3)(A) of this title) as may be authorized by the Secretary, under regulations which the Secretary shall prescribe, to be included in such loan;".

1992—Subsec. (a)(7). Pub. L. 102–547, §9(b)(1), amended par. (7) generally. Prior to amendment, par. (7) read as follows: "To improve a dwelling or farm residence owned by the veteran and occupied by the veteran as the veteran's home through the installation of a solar heating system, a solar heating and cooling system, or a combined solar heating and cooling system or through the application of a residential energy conservation measure."

Subsec. (a)(10). Pub. L. 102–547, §9(b)(2), added par. (10).

Subsec. (d). Pub. L. 102–547, §9(a), amended subsec. (d) generally. Prior to amendment, subsec. (d) defined terms "solar heating", "solar heating and cooling", "combined solar heating and cooling", "passive system", and "residential energy conservation measure" for purposes of subsec. (a)(7).

Subsec. (e)(1)(D). Pub. L. 102–547, §6(1), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: "the amount of the guaranty of the loan may not exceed the original guaranty amount of the loan being refinanced;".

1991Pub. L. 102–83, §5(a), renumbered section 1810 of this title as this section.

Subsec. (a). Pub. L. 102–83, §5(c)(1), substituted "3704(c)(2)" for "1804(c)(2)" in introductory provisions, "3712(a)(5)" for "1812(a)(5)" in par. (9)(B)(ii), and "3711" for "1811" in concluding provisions.

Subsec. (b). Pub. L. 102–83, §5(c)(1), substituted "3711" for "1811" in introductory provisions and "3731" for "1831" in pars. (5), (7)(i), and (8).

Subsec. (e)(1)(C). Pub. L. 102–83, §5(c)(1), substituted "3703(c)(3)(A)" for "1803(c)(3)(A)".

Subsec. (e)(2). Pub. L. 102–83, §5(c)(1), substituted "3702(b)" for "1802(b)".

Pub. L. 102–83, §4(a)(2)(A)(iv), substituted "Secretary" for "Veterans' Administration".

Subsec. (g)(2). Pub. L. 102–83, §5(c)(1), substituted "3712(e)(2)" for "1812(e)(2)".

1989—Subsec. (a)(6). Pub. L. 101–237, §313(b)(1), substituted "Secretary" for "Administrator" wherever appearing.

Subsec. (b)(5) to (8). Pub. L. 101–237, §309(b), inserted "except in the case of a loan described in clause (7) or (8) of this subsection," before "the loan to be paid" in cl. (5), struck out "and," at end of cl. (5), substituted semicolon for period at end of cl. (6), and added cls. (7) and (8).

Subsecs. (d) to (g). Pub. L. 101–237, §313(b)(1), substituted "Secretary" and "Secretary's" for "Administrator" and "Administrator's", respectively, wherever appearing.

Subsec. (h). Pub. L. 101–237, §309(a), struck out subsec. (h) which read as follows: "The amount of a loan guaranteed for the purpose specified in subsection (a)(5) of this section may not exceed the amount equal to 90 percent of the appraised value of the dwelling or farm residence which will secure the loan, as determined by the Administrator."

1988—Subsec. (a)(9)(B)(ii). Pub. L. 100–322, §415(c)(4)(A), substituted "section 1812(a)(5)" for "section 1819(a)(5)".

Subsec. (g)(2). Pub. L. 100–322, §415(c)(4)(B), substituted "section 1812(e)(2)" for "section 1819(e)(2)".

1987—Subsec. (a). Pub. L. 100–198, §8(a)(2), substituted "Except as provided in section 1804(c)(2) of this title, any" for "Any".

Subsec. (b). Pub. L. 100–198, §11(b), substituted "pursuant to section 1831 of this title" for "by the Administrator" in cl. (5) and struck out last sentence which read as follows: "After the reasonable value of any property, construction, repairs, or alterations is determined under paragraph (5), the Administrator shall, as soon as possible thereafter, notify the veteran concerned of such determination."

Subsec. (c). Pub. L. 100–198, §3(a)(2), struck out subsec. (c) which read as follows: "The amount of guaranty entitlement available to a veteran under this section shall not be more than $27,500 less such entitlement as may have been used previously under this section and other sections of this chapter."

Subsec. (e)(1)(B). Pub. L. 100–198, §7(a)(1), struck out "and such dwelling or residence must be owned and occupied by the veteran as such veteran's home" after "refinanced".

Subsec. (e)(1)(D). Pub. L. 100–198, §7(a)(2), struck out "and" at end.

Subsec. (e)(1)(E). Pub. L. 100–198, §7(a)(3), substituted "by more than 10 years; and" for period at end.

Subsec. (e)(1)(F). Pub. L. 100–198, §7(a)(4), added cl. (F).

Subsec. (g)(3). Pub. L. 100–198, §13, inserted at end "If the procedures described in clause (C) of this paragraph include standards for evaluating residual income, the Administrator shall, in establishing such standards, give appropriate consideration to State statistics (in States as to which the Administrator determines that such statistics are reliable) pertinent to residual income and the cost of living in the State in question rather than in a larger region."

Subsec. (h). Pub. L. 100–198, §7(c), added subsec. (h).

1986—Subsec. (b)(3). Pub. L. 99–576, §402(a), inserted ", as determined in accordance with the credit underwriting standards established pursuant to subsection (g) of this section".

Subsec. (g). Pub. L. 99–576, §402(b), added subsec. (g).

1984—Subsec. (a)(9). Pub. L. 98–223, §205(a)(1), added par. (9).

Subsec. (f). Pub. L. 98–223, §205(a)(2), added subsec. (f).

1980—Subsec. (a)(8). Pub. L. 96–385, §401(a)(1), added par. (8).

Subsec. (c). Pub. L. 96–385, §402(a), substituted "$27,500" for "$25,000".

Subsec. (e). Pub. L. 96–385, §401(a)(2), added subsec. (e).

1978—Subsec. (a)(6). Pub. L. 95–476, §104(1), struck out requirement that the purchased residential unit be in a new condominium development, struck out provision that such unit could be in a structure built and sold as a condominium, and inserted provision that the criteria prescribed by the Administrator be prescribed through regulations.

Subsec. (a)(7). Pub. L. 95–476, §104(2), added par. (7).

Subsec. (c). Pub. L. 95–476, §105(a), substituted "$25,000" for "$17,500".

Subsec. (d). Pub. L. 95–476, §104(3), added subsec. (d).

1976—Subsec. (a). Pub. L. 94–324 substituted "the veteran", "the veteran's" and "the Administrator" for "him", "his" and "he", respectively, wherever appearing.

1974—Subsec. (a)(5). Pub. L. 93–569, §3(1), struck out "Nothing in this chapter shall preclude a veteran from paying to a lender any discount required by such lender in connection with such refinancing."

Subsec. (a)(6). Pub. L. 93–569, §3(2), added par. (6).

Subsec. (c). Pub. L. 93–569, §3(3), substituted "$17,500" for "$12,500".

Subsec. (d). Pub. L. 93–569, §3(4), struck out subsec. (d) relating to guaranty of loans for purchase of a one-family residential unit in a condominium housing project or development as to which Secretary of Housing and Urban Development has issued, under section 234 of the National Housing Act, evidence of insurance.

1970—Subsec. (a). Pub. L. 91–506, §3(1), added par. (5) permitting a veteran to use his loan guaranty eligibility to refinance existing mortgage loans or other liens on dwellings on farm residences he occupies and provided that veterans using loan guarantees for such refinancing may pay points demanded by a lender.

Subsec. (d). Pub. L. 91–506, §3(2), added subsec. (d).

1968—Subsec. (b). Pub. L. 90–301, §2(a), substituted "loan to be paid" for "price paid or to be paid" in par. (5) of first sentence and inserted sentence at end relating to notification of veteran concerned of determination of reasonable value of any property, construction, repairs, or alterations.

Subsec. (c). Pub. L. 90–301, §1(a), increased limitation on amount of guaranty entitlement from $7,500 to $12,500.

Effective Date of 1987 Amendment

Amendment by section 3(a)(2) of Pub. L. 100–198 applicable to loans closed on or after Feb. 1, 1988, but not applicable to any loan for which a guaranty commitment is made on or before Dec. 31, 1987, see section 3(d) of Pub. L. 100–198, set out as a note under section 3703 of this title.

Section 7(d) of Pub. L. 100–198 provided that:

"(1) The amendments made by subsections (a) and (b) of this section [amending this section and section 1819 [now 3712] of this title] shall apply to loans made more than 30 days after the date of the enactment of this Act [Dec. 21, 1987].

"(2) The amendment made by subsection (c) of this section [amending this section] shall apply to loans for which commitments are made more than 60 days after the date of the enactment of this Act."

Amendment by section 8(a)(2) of Pub. L. 100–198 applicable with respect to loans made more than 30 days after Dec. 21, 1987, see section 8(c) of Pub. L. 100–198, set out as a note under section 3704 of this title.

Effective Date of 1980 Amendment

Amendment by sections 401(a) and 402(a) of Pub. L. 96–385 effective Oct. 7, 1980, and Oct. 1, 1980, respectively, see section 601(b), (d) of Pub. L. 96–385, set out as a note under section 1114 of this title.

Effective Date of 1978 Amendment

Amendment by sections 104(2), (3) and 105(a) of Pub. L. 95–476 effective Oct. 1, 1978, and amendment by section 104(1) of Pub. L. 95–476 effective July 1, 1979, except with respect to the authority to prescribe regulations for the implementation of such amendment, which is effective Oct. 18, 1978, see section 108(a), (b) of Pub. L. 95–476, set out as a note under section 3702 of this title.

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–324 effective June 30, 1976, see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.

Effective Date of 1974 Amendment

Amendment by Pub. L. 93–569 effective Dec. 31, 1974, except that amendment by section 3(2), (4) of Pub. L. 93–569 effective ninety days after Dec. 31, 1974, see section 10 of Pub. L. 93–569, set out as a note under section 3702 of this title.

Ratification of Actions During Period of Expired Authority

Any action taken by Secretary of Veterans Affairs before Feb. 13, 1996, under provision of law amended by title I of Pub. L. 104–110 that was taken during period beginning on date on which authority of Secretary under such provision of law expired and ending on Feb. 13, 1996, considered to have same force and effect as if such amendment had been in effect at time of that action, see section 103 of Pub. L. 104–110, set out as a note under section 1710 of this title.

Reports on Energy Efficient Mortgages Guaranteed Under This Section

Pub. L. 102–547, §9(c), Oct. 28, 1992, 106 Stat. 3642, directed Secretary of Veterans Affairs to transmit report on energy efficient mortgages to Committees on Veterans' Affairs of Senate and House of Representatives not later than 1 year after date on which Secretary first exercises authority to guarantee loans under section 3710(d) of this title and for each of the 3 years thereafter, prior to repeal by Pub. L. 104–110, title II, §201(b), Feb. 13, 1996, 110 Stat. 770.

§3711. Direct loans to veterans

(a) The Congress finds that housing credit for purposes specified in section 3710 or 3712 of this title is not and has not been generally available to veterans living in rural areas, or in small cities and towns not near large metropolitan areas. It is therefore the purpose of this section to provide housing credit for veterans living in such rural areas and such small cities and towns.

(b) Whenever the Secretary finds that private capital is not generally available in any rural area or small city or town for the financing of loans guaranteed for purposes specified in section 3710 or 3712 of this title, the Secretary shall designate such rural area or small city or town as a "housing credit shortage area". The Secretary shall, with respect to any such area, make, or enter into commitments to make, to any veteran eligible under this title, a loan for any or all of the purposes described in section 3710(a) or 3712 of this title (other than the refinancing of a loan under section 3710(a)(8) or 3712(a)(1)(F)).

(c) No loan may be made under this section to a veteran unless the veteran shows to the satisfaction of the Secretary that—

(1) the veteran is unable to obtain from a private lender in such housing credit shortage area, at an interest rate not in excess of the rate authorized for guaranteed home loans or manufactured home loans, as appropriate, a loan for such purpose for which the veteran is qualified under section 3710 or 3712 of this title, as appropriate; and

(2) the veteran is unable to obtain a loan for such purpose from the Secretary of Agriculture under title III of the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) or title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.).


(d)(1) Loans made under this section shall bear interest at a rate determined by the Secretary, not to exceed the rate authorized for guaranteed home loans, or manufactured home loans, as appropriate, and shall be subject to such requirements or limitations prescribed for loans guaranteed under this title as may be applicable.

(2)(A) Except for any loan made under this chapter for the purposes described in section 3712 of this title, the original principal amount of any loan made under this section shall not exceed an amount which bears the same ratio to $33,000 as the amount of guaranty to which the veteran is entitled under section 3710 of this title at the time the loan is made bears to $36,000; and the guaranty entitlement of any veteran who heretofore or hereafter has been granted a loan under this section shall be charged with an amount which bears the same ratio to $36,000 as the amount of the loan bears to $33,000.

(B) The original principal amount of any loan made under this section for the purposes described in section 3712 of this title shall not exceed the amount that bears the same ratio to $33,000 as the amount of guaranty to which the veteran is entitled under such section at the time the loan is made bears to $20,000. The amount of the guaranty entitlement for purposes specified in section 3710 of this title of any veteran who is granted a loan under this section, or who before October 18, 1978, was granted a loan under this section, shall be charged with the amount that bears the same ratio to $20,000 as the amount of the loan bears to $33,000.

(3) No veteran may obtain loans under this section aggregating more than $33,000.

(e) Loans made under this section shall be repaid in monthly installments, except that in the case of any such loan made for any of the purposes described in paragraphs (2), (3), or (4) of section 3710(a) of this title, the Secretary may provide that such loan shall be repaid in quarterly, semiannual, or annual installments.

(f) In connection with any loan under this section, the Secretary may make advances in cash to pay taxes and assessments on the real estate, to provide for repairs, alterations, and improvements, and to meet the incidental expenses of the transaction. The Secretary shall determine the expenses incident to origination of loans made under this section, which expenses, or a reasonable flat allowance in lieu thereof, shall be paid by the veteran in addition to the loan closing costs.

(g) The Secretary may sell, and shall offer for sale, to any person or entity approved for such purpose by the Secretary, any loan made under this section at a price which the Secretary determines to be reasonable under the conditions prevailing in the mortgage market when the agreement to sell the loan is made; and shall guarantee any loan thus sold subject to the same conditions, terms, and limitations which would be applicable were the loan guaranteed for purposes specified in section 3710 or 3712 of this title, as appropriate.

(h) The Secretary may exempt dwellings constructed through assistance provided by this section from the minimum land planning and subdivision requirements prescribed pursuant to subsection (a) of section 3704 of this title, and with respect to such dwellings may prescribe special minimum land planning and subdivision requirements which shall be in keeping with the general housing facilities in the locality but shall require that such dwellings meet minimum requirements of structural soundness and general acceptability.

(i) The Secretary is authorized, without regard to the provisions of subsections (a), (b), and (c) of this section, to make or enter into a commitment to make a loan to any veteran to assist the veteran in acquiring a specially adapted housing unit authorized under chapter 21 of this title, if the veteran is determined to be eligible for the benefits of such chapter 21, and is eligible for loan guaranty benefits under this chapter.

(j)(1) If any builder or sponsor proposes to construct one or more dwellings in a housing credit shortage area, or in any area for a veteran who is determined to be eligible for assistance in acquiring a specially adapted housing unit under chapter 21 of this title, the Secretary may enter into commitment with such builder or sponsor, under which funds available for loans under this section will be reserved for a period not in excess of three months, or such longer period as the Secretary may authorize to meet the needs in any particular case, for the purpose of making loans to veterans to purchase such dwellings. Such commitment may not be assigned or transferred except with the written approval of the Secretary. The Secretary shall not enter into any such commitment unless such builder or sponsor pays a nonrefundable commitment fee to the Secretary in an amount determined by the Secretary, not to exceed 2 percent of the funds reserved for such builder or sponsor.

(2) Whenever the Secretary finds that a dwelling with respect to which funds are being reserved under this subsection has been sold, or contracted to be sold, to a veteran eligible for a direct loan under this section, the Secretary shall enter into a commitment to make the veteran a loan for the purchase of such dwelling. With respect to any loan made to an eligible veteran under this subsection, the Secretary may make advances during the construction of the dwelling, up to a maximum in advances of (A) the cost of the land plus (B) 80 percent of the value of the construction in place.

(k) Without regard to any other provision of this chapter, the Secretary may take or cause to be taken such action as in the Secretary's judgment may be necessary or appropriate for or in connection with the custody, management, protection, and realization or sale of investments under this section, may determine the Secretary's necessary expenses and expenditures, and the manner in which the same shall be incurred, allowed and paid, may make such rules, regulations, and orders as the Secretary may deem necessary or appropriate for carrying out the Secretary's functions under this section and, except as otherwise expressly provided in this chapter, may employ, utilize, compensate, and, to the extent not inconsistent with the Secretary's basic responsibilities under this chapter, delegate any of the Secretary's functions under this section to such persons and such corporate or other agencies, including agencies of the United States, as the Secretary may designate.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1208, §1811; Pub. L. 86–665, §2, July 14, 1960, 74 Stat. 531; Pub. L. 87–84, §2, July 6, 1961, 75 Stat. 201; Pub. L. 88–402, Aug. 4, 1964, 78 Stat. 380; Pub. L. 89–358, §5(e), Mar. 3, 1966, 80 Stat. 26; Pub. L. 90–77, title IV, §404, Aug. 31, 1967, 81 Stat. 190; Pub. L. 90–301, §1(b), May 7, 1968, 82 Stat. 113; Pub. L. 91–22, §3, June 6, 1969, 83 Stat. 32; Pub. L. 91–506, §4, Oct. 23, 1970, 84 Stat. 1109; Pub. L. 92–66, Aug. 5, 1971, 85 Stat. 173; Pub. L. 93–569, §4, Dec. 31, 1974, 88 Stat. 1864; Pub. L. 94–324, §§3, 7(12)–(15), June 30, 1976, 90 Stat. 720, 721; Pub. L. 95–476, title I, §105(b), Oct. 18, 1978, 92 Stat. 1499; Pub. L. 96–385, title IV, §§401(c)(2), 402(b), Oct. 7, 1980, 94 Stat. 1533; Pub. L. 97–295, §4(65), Oct. 12, 1982, 96 Stat. 1309; Pub. L. 97–306, title IV, §406(c)(1), Oct. 14, 1982, 96 Stat. 1445; Pub. L. 100–198, §3(c), Dec. 21, 1987, 101 Stat. 1316; Pub. L. 100–322, title IV, §415(c)(5), (d)(2) May 20, 1988, 102 Stat. 551, 552; Pub. L. 101–237, title III, §313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered §3711 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 105–368, title VI, §602(e)(1)(B), Nov. 11, 1998, 112 Stat. 3346.)

References in Text

Title III of the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.), referred to in subsec. (c)(2), probably means title III of Pub. L. 87–128, Aug. 8, 1961, 75 Stat. 307, as amended, known as the Consolidated Farm and Rural Development Act, which is classified principally to chapter 50 (§1921 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see Short Title note set out under section 1921 of Title 7 and Tables.

The Housing Act of 1949, referred to in subsec. (c)(2), is act July 15, 1949, ch. 338, 63 Stat. 413, as amended. Title V of the Housing Act of 1949 is classified generally to subchapter III (§1471 et seq.) of chapter 8A of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 1441 of Title 42 and Tables.

Amendments

1998—Subsec. (k). Pub. L. 105–368 struck out "and section 3723 of this title" after "functions under this section" in two places.

1991Pub. L. 102–83, §5(a), renumbered section 1811 of this title as this section.

Subsec. (a). Pub. L. 102–83, §5(c)(1), substituted "3710 or 3712" for "1810 or 1812".

Subsec. (b). Pub. L. 102–83, §5(c)(1), substituted "3710 or 3712" for "1810 or 1812", "3710(a) or 3712" for "1810(a) or 1812", and "3710(a)(8) or 3712(a)(1)(F))" for "1810(a)(8) or 1812(a)(1)(F))".

Subsec. (c)(1). Pub. L. 102–83, §5(c)(1), substituted "3710 or 3712" for "1810 or 1812".

Subsec. (d)(2). Pub. L. 102–83, §5(c)(1), substituted "3712" for "1812" and "3710" for "1810" in subpars. (A) and (B).

Subsec. (e). Pub. L. 102–83, §5(c)(1), substituted "3710(a)" for "1810(a)".

Subsec. (g). Pub. L. 102–83, §5(c)(1), substituted "3710 or 3712" for "1810 or 1812".

Subsec. (h). Pub. L. 102–83, §5(c)(1), substituted "3704" for "1804".

Subsec. (k). Pub. L. 102–83, §5(c)(1), substituted "3723" for "1823" in two places.

1989—Subsecs. (b) to (d)(1), (e) to (k). Pub. L. 101–237 substituted "Secretary" and "Secretary's" for "Administrator" and "Administrator's", respectively, wherever appearing.

1988—Subsec. (a). Pub. L. 100–322, §415(c)(5)(A), (d)(2)(A), substituted "for purposes specified in section 1810 or 1812" for "under section 1810 or 1819".

Subsec. (b). Pub. L. 100–322, §415(c)(5), (d)(2)(A), substituted "for purposes specified in section 1810 or 1812" for "under section 1810 or 1819", "section 1810(a) or 1812" for "section 1810(a) or 1819", and "section 1812(a)(1)(F)" for "section 1819(a)(1)(F)".

Subsecs. (c)(1), (d)(2)(A). Pub. L. 100–322, §415(c)(5)(A), substituted "1812" for "1819".

Subsec. (d)(2)(B). Pub. L. 100–322, §415(c)(5)(A), (d)(2)(B), substituted "1812" for "1819" and "for purposes specified in section 1810" for "under section 1810(c)".

Subsec. (g). Pub. L. 100–322, §415(c)(5)(A), (d)(2)(A), substituted "for purposes specified in section 1810 or 1812" for "under section 1810 or 1819".

1987—Subsec. (d)(2)(A). Pub. L. 100–198 substituted "$36,000" for "$27,500" in two places.

1982—Subsec. (c)(1). Pub. L. 97–306, §406(c)(1), substituted "manufactured home" for "mobile home".

Subsec. (c)(2). Pub. L. 97–295, §4(65)(A), substituted "title III of the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) or title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.)" for "sections 1000–1029 of title 7 or under sections 1471–1483 of title 42".

Subsec. (d)(1). Pub. L. 97–306, §406(c)(1), substituted "manufactured home" for "mobile home".

Subsec. (d)(2)(B). Pub. L. 97–295, §4(65)(B), substituted "October 18, 1978," for "the date of the enactment of the Veterans' Housing Benefits Act of 1978".

Subsec. (j). Pub. L. 97–295, §4(65)(C), substituted "percent" for "per centum" wherever appearing.

1980—Subsec. (b). Pub. L. 96–385, §401(c)(2), inserted "(other than the refinancing of a loan under section 1810(a)(8) or 1819(a)(1)(F))" after "section 1810(a) or 1819 of this title".

Subsec. (d)(2). Pub. L. 96–385, §402(b), substituted in two places "$27,500" for "$25,000" in subpar. (A) and "$20,000" for "$17,500" in two places in subpar. (B).

1978—Subsec. (d)(2)(A). Pub. L. 95–476, §105(b)(1), substituted "$25,000" for "$17,500" in two places.

Subsec. (d)(2)(B). Pub. L. 95–476, §105(b)(2), substituted formula for determining maximum amount of original principal of any loan made under this section for purposes of section 1819 of this title for provision that such original amount was not to exceed amount specified by Administrator pursuant to section 1819(d) of this title and inserted provision relating to amount of guaranty entitlement under section 1810(c) of this title.

1976—Subsec. (b). Pub. L. 94–324, §7(12), substituted "the Administrator shall" for "he shall" and "The Administrator" for "He".

Subsec. (c). Pub. L. 94–324, §7(13), substituted "the veteran" for "he" wherever appearing.

Subsec. (d)(2)(A). Pub. L. 94–324, §3(1), substituted "$33,000" for "$21,000" wherever appearing and struck out provision authorizing Administrator to increase limitations specified upon finding that cost levels so required.

Subsec. (d)(3). Pub. L. 94–324, §3(2), increased aggregate amount of loans that a veteran is eligible to receive under this section from $21,000 to $33,000 and struck out provision authorizing Administrator to increase specific limitations upon such loans.

Subsec. (g). Pub. L. 94–324, §7(14), substituted "the Administrator" for "him" and "he" wherever appearing.

Subsec. (k). Pub. L. 94–324, §7(15), substituted "the Administrator's" for "his" wherever appearing and "as the Administrator" for "as he" wherever appearing.

1974—Subsec. (d)(2)(A). Pub. L. 93–569 substituted "$17,500" for "$12,500" wherever appearing.

1971—Subsec. (g). Pub. L. 92–66 substituted provisions authorizing Administrator to sell loans at a price which he determines to be reasonable under prevailing conditions in the mortgage market when agreement to sell loan is made, for provisions authorizing Administrator to sell loans at a price which he determines to be reasonable but not less than 98 per centum of unpaid principal balance, plus full amount of accrued interest, and if loans are offered to an investor in a package or block of two or more loans at not less than 98 per centum of aggregate unpaid principal balance of loans included in such package or block, plus full amount of accrued interest.

1970—Subsec. (a). Pub. L. 91–506, §4(1), substituted "1810 or 1819" for "1810".

Subsec. (b). Pub. L. 91–506, §4(1), (2), substituted "1810 or 1819" for "1810" and provided that the Administrator make, or enter into commitments to make, to any eligible veteran, a loan for any of the purposes described in section 1819 dealing with loans to purchase mobile homes and lots as well as section 1810(a) dealing with the purchase or construction of homes.

Subsecs. (c)(1), (d)(1). Pub. L. 91–506, §4(3), (4), inserted reference to mobile home loans.

Subsec. (d)(2)(A). Pub. L. 91–506, §4(5), redesignated subsec. (d)(2) as subsec. (d)(2)(A) and substituted "Except for any loan made under this chapter for the purposes described in section 1819 of this title, the" for "The".

Subsec. (d)(2)(B). Pub. L. 91–506, §4(6), inserted provision limiting the original principal amount of any loan made under this section for the purchase of mobile homes and mobile home lots under section 1819 of this title to the amount specified by the Administrator pursuant to subsec. (d) of section 1819.

Subsec. (g). Pub. L. 91–506, §4(7), substituted "1810 or 1819 of this title, as appropriate" for "1810 of this title".

Subsec. (h). Pub. L. 91–506, §4(8), substituted provisions permitting Administrator to exempt dwellings constructed through assistance provided by this section from the minimum land planning and subdivision requirements of this title so long as such dwellings meet minimum requirements of structural soundness and general acceptability for provisions establishing a direct loan expiration date by reference to those for guaranteed loans.

Subsec. (i). Pub. L. 91–506, §4(8), substituted provisions authorizing, Administrator to make or enter into a commitment to make, loans to assist disabled veterans in acquiring specially adapted housing if they are eligible for provisions authorizing Administrator to reserve funds available for loans to enable veterans to purchase dwellings in a housing credit shortage area provided the builder pays a nonrefundable commitment fee, not to exceed 2 percent of the funds reserved, authorizing the Administrator to make advances during construction of the dwelling, authorizing the Administrator to permit a private lender to purchase such loan, and permitting the Administrator to exempt dwellings constructed through assistance provided by this subsec. from the minimum land planning and subdivision requirements of this title so long as such dwellings meet minimum requirements of structural soundness and general acceptability.

Subsec. (j). Pub. L. 91–506, §4(8), substituted provisions authorizing Administrator to reserve funds available for loans to enable veterans to purchase housing in a housing credit shortage area, or in any area for a disabled veteran eligible for specially adapted housing, provided the builder pays a nonrefundable commitment fee, not to exceed 2 percent of the funds reserved and authorizing the Administrator to make advances during construction of the dwelling for provisions authorizing the Administrator to process loan applications notwithstanding the assistance of the Voluntary Home Mortgage Credit Committee in trying to place such loans with private lenders, authorizing the Administrator to complete the processing of such loan applications unless he is notified by such Committee that it was able to place any such loan with a private lender, and defining "working days".

1969—Subsec. (d)(2), (3). Pub. L. 91–22 substituted "$21,000" for "$17,500" wherever appearing.

1968—Subsec. (d)(2). Pub. L. 90–301 substituted "$12,500" for "$7,500" in two places.

1967—Subsec. (d)(2). Pub. L. 90–77, §404(a), authorized an increase in amount of direct loan limits from $17,500 to $25,000 where Administrator finds cost levels so require.

Subsec. (d)(3). Pub. L. 90–77, §404(b), authorized an increase in aggregate amount of direct loans to $25,000 where Administrator finds cost levels so require.

1966—Subsec. (d)(2), (3), Pub. L. 89–358 substituted "$17,500" for "$15,000" wherever appearing.

1964—Subsec. (g). Pub. L. 88–402 substituted provisions authorizing Administrator to sell loans at a price which he determines to be reasonable but not less than 98 per centum of unpaid principal balance, plus full amount of accrued interest, and if loans are offered to an investor in a package or block of two or more loans at not less than 98 per centum of aggregate unpaid principal balance of loans included in such package or block, plus full amount of accrued interest, for provisions which permitted Administrator to sell loans only at a price not less than par.

1961—Subsec. (d)(2), (3). Pub. L. 87–84, §2(a), substituted "$15,000" for "$13,500" wherever appearing.

Subsec. (h). Pub. L. 87–84, §2(b), substituted "to any veteran after the expiration of his entitlement pursuant to section 1803(a)(3) of this title except pursuant to a commitment issued by the Administrator before such entitlement expires" for "after July 25, 1962, except pursuant to commitments issued by the Administrator before that date."

1960—Subsec. (h). Pub. L. 86–665 substituted "1962" for "1960".

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–368 effective Oct. 1, 1998, see section 602(f) of Pub. L. 105–368, set out as a note under section 2106 of this title.

Effective Date of 1987 Amendment

Amendment by section 3(c) of Pub. L. 100–198 applicable to loans closed on or after Feb. 1, 1988, but not applicable to any loan for which a guaranty commitment is made on or before Dec. 31, 1987, see section 3(d) of Pub. L. 100–198, set out as a note under section 3703 of this title.

Effective Date of 1980 Amendment

Amendment by sections 401(c)(2) and 402(b) of Pub. L. 96–385 effective Oct. 7, 1980, and Oct. 1, 1980, respectively, see section 601(b), (d) of Pub. L. 96–385, set out as a note under section 1114 of this title.

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–476 effective Oct. 1, 1978, see section 108(a) of Pub. L. 95–476, set out as a note under section 3702 of this title.

Effective Date of 1976 Amendment

Amendment by sections 3 and 7(12)–(15) of Pub. L. 94–324 effective Oct. 1, 1976, and June 30, 1976, respectively, see section 9(a), (b) of Pub. L. 94–324, set out as a note under section 3701 of this title.

Effective Date of 1974 Amendment

Amendment by Pub. L. 93–569 effective Dec. 31, 1974, see section 10 of Pub. L. 93–569, set out as a note under section 3702 of this title.

Effective Date of 1967 Amendment

Amendment by Pub. L. 90–77 effective first day of first calendar month which begins more than ten days after Aug. 31, 1967, see section 405 of Pub. L. 90–77, set out as a note under section 101 of this title.

§3712. Loans to purchase manufactured homes and lots

(a)(1) Notwithstanding any other provision of this chapter, any loan to a veteran eligible for the housing loan benefits of this chapter, if made pursuant to the provisions of this section, may be guaranteed if such loan is for one of the following purposes:

(A) To purchase a lot on which to place a manufactured home already owned by the veteran.

(B) To purchase a single-wide manufactured home.

(C) To purchase a single-wide manufactured home and a lot on which to place such home.

(D) To purchase a double-wide manufactured home.

(E) To purchase a double-wide manufactured home and a lot on which to place such home.

(F) To refinance in accordance with paragraph (4) of this subsection an existing loan guaranteed, insured, or made under this section.

(G) To refinance in accordance with paragraph (5) of this subsection an existing loan that was made for the purchase of, and that is secured by, a manufactured home and to purchase a lot on which such manufactured home is or will be placed.


(2) A loan for any of the purposes described in paragraph (1) of this subsection (other than the refinancing under clause (F) of such paragraph of an existing loan) may include an amount determined by the Secretary to be appropriate to cover the cost of necessary preparation of a lot already owned or to be acquired by the veteran, including the costs of installing utility connections and sanitary facilities, of paving, and of constructing a suitable pad for the manufactured home.

(3) Any loan made for the purposes described in clause (C), (E), or (G) of paragraph (1) of this subsection shall be considered as part of one loan. The transaction may be evidenced by a single loan instrument or by separate loan instruments for (A) that portion of the loan which finances the purchase of the manufactured home, and (B) that portion of the loan which finances the purchase of the lot and the necessary preparation of such lot.

(4)(A) For a loan to be guaranteed for the purpose specified in clause (F) of paragraph (1) of this subsection—

(i) the interest rate of the loan must be less than the interest rate of the loan being refinanced;

(ii) the loan must be secured by the same manufactured home or manufactured-home lot, or manufactured home and manufactured-home lot, as was the loan being refinanced;

(iii) the amount of the loan may not exceed an amount equal to the sum of the balance of the loan being refinanced and such closing costs (including any discount permitted pursuant to section 3703(c)(3)(A) of this title) as may be authorized by the Secretary, under regulations which the Secretary shall prescribe, to be included in such loan;

(iv) notwithstanding section 3703(a)(1) of this title, the amount of the guaranty of the loan may not exceed the greater of (I) the original guaranty amount of the loan being refinanced, or (II) 25 percent of the loan;

(v) the term of the loan may not exceed the original term of the loan being refinanced;

(vi) the veteran must own the manufactured home, or the manufactured-home lot, or the manufactured home and the manufactured-home lot, securing the loan and—

(I) must occupy the home, a manufactured home on the lot, or the home and the lot, securing the loan;

(II) must have previously occupied the home, a manufactured home on the lot, or the home and the lot, securing the loan as the veteran's home and must certify, in such form as the Secretary shall require, that the veteran has previously so occupied the home (or such a home on the lot); or

(III) in any case in which a veteran is in active duty status as a member of the Armed Forces and is unable to occupy the home, a manufactured home on the lot, or the home and the lot, as a home because of such status, the spouse of the veteran must occupy, or must have previously occupied, the manufactured home on the lot, or the home and the lot, as such spouse's home and must certify such occupancy in such form as the Secretary shall require.


(B) A loan to a veteran may be guaranteed by the Secretary under this chapter for the purpose specified in clause (F) of paragraph (1) of this subsection without regard to the amount of outstanding guaranty entitlement available for use by such veteran, and the amount of such veteran's guaranty entitlement shall not be charged as a result of any guaranty provided for such purpose. For purposes of section 3702(b) of this title, such loan shall be deemed to have been obtained with the guaranty entitlement used to obtain the loan being refinanced.

(C) If a veteran is deceased and if such veteran's surviving spouse was a co-obligor under an existing loan previously guaranteed, insured, or made for purposes specified in this section, such surviving spouse shall, only for the purpose specified in clause (F) of paragraph (1) of this subsection, be deemed to be a veteran eligible for benefits under this chapter.

(5)(A) For a loan to be guaranteed for the purpose specified in paragraph (1)(G) of this subsection or section 3710(a)(9)(B)(ii) of this title

(i) the loan must be secured by the same manufactured home as was the loan being refinanced and such manufactured home must be owned and occupied by the veteran (except as provided in section 3704(c)(2) of this title) as such veteran's home; and

(ii) the amount of the loan may not exceed an amount equal to the sum of—

(I) the purchase price of the lot,

(II) the amount (if any) determined by the Secretary to be appropriate under paragraph (2) of this subsection to cover the cost of necessary preparation of such lot,

(III) the balance of the loan being refinanced, and

(IV) such closing costs (including any discount permitted pursuant to section 3703(c)(3)(E) of this title) as may be authorized by the Secretary, under regulations which the Secretary shall prescribe, to be included in such loan.


(B) When a loan is made to a veteran for the purpose specified in paragraph (1)(G) of this subsection or section 3710(a)(9)(B)(ii) of this title, and the loan being refinanced was guaranteed, insured, or made under this section, the portion of the loan made for the purpose of refinancing such loan may be guaranteed by the Secretary under this chapter without regard to the amount of outstanding guaranty entitlement available for use by such veteran, and the amount of such veteran's guaranty entitlement shall not be charged as a result of any guaranty provided for such portion of such loan. For the purposes of section 3702(b) of this title, such portion of such loan shall be deemed to have been obtained with the guaranty entitlement used to obtain the loan being refinanced.

(b)(1) Use of entitlement for purposes specified in this section for the purchase of a manufactured home unit shall preclude the use of remaining entitlement for the purchase of an additional manufactured home unit until the unit which secured the loan has been disposed of by the veteran or has been destroyed by fire or other natural hazard.

(2) The Secretary shall restore entitlement to all housing loan benefits under this chapter for the veteran when the conditions prescribed in section 3702(b) of this title have been met.

(c)(1) Loans for any of the purposes authorized by subsection (a) of this section shall be submitted to the Secretary for approval prior to the closing of the loan, except that the Secretary may exempt any lender of a class listed in section 3702(d) of this title from compliance with such prior approval requirement if the Secretary determines that the experience of such lender or class of lenders in manufactured home financing warrants such exemption.

(2) Upon determining that a loan submitted for prior approval is eligible for guaranty for purposes specified in this section, the Secretary shall issue a commitment to guarantee such loan and shall thereafter guarantee the loan when made if such loan qualifies therefor in all respects.

(3)(A) The Secretary's guaranty may not exceed the lesser of (i) the lesser of $20,000 or 40 percent of the loan, or (ii) the maximum amount of the guaranty entitlement available to the veteran as specified in paragraph (4) of this subsection.

(B) A claim under the Secretary's guaranty shall, at the election of the holder of a loan, be made by the filing of an accounting with the Secretary—

(i) within a reasonable time after the receipt by such holder of an appraisal by the Secretary of the value of the security for the loan; or

(ii) after liquidation of the security for the loan.


(C) If the holder of a loan applies for payment of a claim under clause (i) of subparagraph (B) of this paragraph, the amount of such claim payable by the Secretary shall be the lesser of—

(i) the amount equal to the excess, if any, of the total indebtedness over the amount of the appraisal referred to in such clause; or

(ii) the amount equal to the guaranty under this section.


(D) If the holder of a loan files for payment of a claim under clause (ii) of subparagraph (B) of this paragraph, the amount of such claim payable by the Secretary shall be the lesser of—

(i) the amount equal to the excess, if any, of the total indebtedness over the greater of the value of the property securing the loan, as determined by the Secretary, or the amount of the liquidation or resale proceeds; or

(ii) the amount equal to the guaranty under this section.


(E) In any accounting filed pursuant to subparagraph (B)(ii) of this paragraph, the Secretary shall permit to be included therein accrued unpaid interest from the date of the first uncured default to such cutoff date as the Secretary may establish, and the Secretary shall allow the holder of the loan to charge against the liquidation or resale proceeds accrued interest from the cutoff date established to such further date as the Secretary may determine and such costs and expenses as the Secretary determines to be reasonable and proper.

(F) The liability of the United States under the guaranty provided for by this paragraph shall decrease or increase pro rata with any decrease or increase of the amount of the unpaid portion of the obligation.

(4) The maximum amount of guaranty entitlement available to a veteran for purposes specified in this section shall be $20,000 reduced by the amount of any such entitlement previously used by the veteran. Use of entitlement for purposes specified in section 3710 or 3711 of this title shall reduce entitlement available for use for purposes specified in this section to the same extent that entitlement available for purposes specified in such section 3710 is reduced below $20,000.

(5) The amount of any loan guaranteed for purposes specified in this section shall not exceed an amount equal to 95 percent of the purchase price of the property securing the loan.

(d)(1) The maturity of any loan guaranteed for purposes specified in this section shall not be more than—

(A) fifteen years and thirty-two days, in the case of a loan for the purchase of a lot;

(B) twenty years and thirty-two days, in the case of a loan for the purchase of—

(i) a single-wide manufactured home; or

(ii) a single-wide manufactured home and a lot;


(C) twenty-three years and thirty-two days, in the case of a loan for the purchase of a double-wide manufactured home; or

(D) twenty-five years and thirty-two days, in the case of a loan for the purchase of a double-wide manufactured home and a lot.


(2) Nothing in paragraph (1) of this subsection shall preclude the Secretary, under regulations which the Secretary shall prescribe, from consenting to necessary advances for the protection of the security or the holder's lien, to a reasonable extension of the term of such loan, or to a reasonable reamortization of such loan.

(e) No loan shall be guaranteed for purposes specified in this section unless—

(1) the loan is repayable in approximately equal monthly installments;

(2) the terms of repayment bear a proper relationship to the veteran's present and anticipated income and expenses, and the veteran is a satisfactory credit risk, as determined in accordance with the regulations prescribed under section 3710(g) of this title and taking into account the purpose of this program to make available lower cost housing to low and lower income veterans, especially those who have been recently discharged or released from active military, naval, or air service, who may not have previously established credit ratings;

(3) the loan is secured by a first lien on the manufactured home purchased with the proceeds of the loan and on any lot acquired or improved with the proceeds of the loan;

(4) the amount of the loan to be paid by the veteran is not in excess of the amount determined to be reasonable, based upon—

(A) with respect to any portion of the loan to purchase a new manufactured home, such cost factors as the Secretary considers proper to take into account;

(B) with respect to any portion of the loan to purchase a used manufactured home, the reasonable value of the property, as determined by the Secretary;

(C) with respect to any portion of the loan to purchase a lot, the reasonable value of such lot, as determined by the Secretary; and

(D) with respect to any portion of the loan to cover the cost of necessary site preparation, an appropriate amount, as determined by the Secretary;


(5) the veteran certifies, in such form as the Secretary shall prescribe, that the veteran will personally occupy the property as the veteran's home; except that the requirement of this clause shall not apply (A) in the case of a guaranteed loan that is for the purpose described in paragraph (1)(F) of subsection (a), or (B) in the case described in section 3704(c)(2);

(6) the manufactured home is or will be placed on a site which meets specifications which the Secretary shall establish by regulation; and

(7) the interest rate to be charged on the loan does not exceed the permissible rate established by the Secretary.


(f) The Secretary shall establish such rate of interest for manufactured home loans and manufactured home lot loans as the Secretary determines to be necessary in order to assure a reasonable supply of manufactured home loan financing for veterans for purposes specified in this section.

(g) The Secretary shall promulgate such regulations as the Secretary determines to be necessary or appropriate in order to fully implement the provisions of this section, and such regulations may specify which provisions in other sections of this chapter the Secretary determines should be applicable to loans guaranteed or made for purposes specified in this section. The Secretary shall have such powers and responsibilities in respect to matters arising under this section as the Secretary has in respect to loans made or guaranteed or under other sections of this chapter.

(h)(1) No loan for the purchase of a manufactured home shall be guaranteed for purposes specified in this section unless the manufactured home and lot, if any, meet or exceed standards for planning, construction, and general acceptability as prescribed by the Secretary and no loan for the purchase of a lot on which to place a manufactured home owned by a veteran shall be guaranteed for purposes specified in this section unless the lot meets such standards prescribed for manufactured home lots. Such standards shall be designed to encourage the maintenance and development of sites for manufactured homes which will be attractive residential areas and which will be free from, and not substantially contribute to, adverse scenic or environmental conditions.

(2) Any manufactured housing unit properly displaying a certification of conformity to all applicable Federal manufactured home construction and safety standards pursuant to section 616 of the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5415) shall be deemed to meet the standards required by paragraph (1).

(i) The Secretary shall require the manufacturer to become a warrantor of any new manufactured home which is approved for purchase with financing through the assistance of this chapter and to furnish to the purchaser a written warranty in such form as the Secretary shall require. Such warranty shall include (1) a specific statement that the manufactured home meets the standards prescribed by the Secretary pursuant to the provisions of subsection (h) of this section; and (2) a provision that the warrantor's liability to the purchaser or owner is limited under the warranty to instances of substantial nonconformity to such standards which become evident within one year from date of purchase and as to which the purchaser or owner gives written notice to the warrantor not later than ten days after the end of the warranty period. The warranty prescribed herein shall be in addition to, and not in derogation of, all other rights and privileges which such purchaser or owner may have under any other law or instrument and shall so provide in the warranty document.

(j) Subject to notice and opportunity for a hearing, the Secretary is authorized to deny guaranteed or direct loan financing in the case of—

(1) manufactured homes constructed by a manufacturer who fails or is unable to discharge the manufacturer's obligations under the warranty;

(2) manufactured homes which are determined by the Secretary not to conform to the standards provided for in subsection (h); or

(3) a manufacturer of manufactured homes who has engaged in procedures or practices determined by the Secretary to be unfair or prejudicial to veterans or the Government.


(k) Subject to notice and opportunity for a hearing, the Secretary may refuse to approve as acceptable any site in a manufactured home park or subdivision owned or operated by any person whose rental or sale methods, procedures, requirements, or practices are determined by the Secretary to be unfair or prejudicial to veterans renting or purchasing such sites. The Secretary may also refuse to guarantee or make direct loans for veterans to purchase manufactured homes offered for sale by any dealer if substantial deficiencies have been discovered in such homes, or if the Secretary determines that there has been a failure or indicated inability of the dealer to discharge contractual liabilities to veterans, or that the type of contract of sale or methods, procedures, or practices pursued by the dealer in the marketing of such properties have been unfair or prejudicial to veteran purchasers.

(l) The provisions of sections 3704(d) and 3721 of this title shall be fully applicable to lenders making guaranteed manufactured home loans and manufactured home lot loans and holders of such loans.

(Added Pub. L. 91–506, §5, Oct. 23, 1970, 84 Stat. 1110, §1819; amended Pub. L. 93–569, §5, Dec. 31, 1974, 88 Stat. 1864; Pub. L. 94–324, §§5, 7(20)–(23), June 30, 1976, 90 Stat. 720, 722; Pub. L. 95–476, title I, §107, Oct. 18, 1978, 92 Stat. 1500; Pub. L. 96–385, title IV, §§401(b), 402(c), Oct. 7, 1980, 94 Stat. 1532, 1533; Pub. L. 97–66, title V, §503, Oct. 17, 1981, 95 Stat. 1032; Pub. L. 97–72, title III, §303(h), (i), Nov. 3, 1981, 95 Stat. 1060; Pub. L. 97–295, §4(66), Oct. 12, 1982, 96 Stat. 1310; Pub. L. 97–306, title IV, §406(a), (c)(2), Oct. 14, 1982, 96 Stat. 1444, 1445; Pub. L. 98–223, title II, §205(b), Mar. 2, 1984, 98 Stat. 43; Pub. L. 99–576, title IV, §402(c)(2), Oct. 28, 1986, 100 Stat. 3281; Pub. L. 100–198, §§3(b), 7(b), 8(b), Dec. 21, 1987, 101 Stat. 1315, 1318, 1320; Pub. L. 100–253, §3(b), Feb. 29, 1988, 102 Stat. 20; renumbered §1812 and amended Pub. L. 100–322, title IV, §415(b)(4), May 20, 1988, 102 Stat. 551; Pub. L. 101–237, title III, §313(b)(1), (7), Dec. 18, 1989, 103 Stat. 2077; Pub. L. 101–508, title VIII, §8031(a), Nov. 5, 1990, 104 Stat. 1388–348; Pub. L. 102–54, §14(c)(8), June 13, 1991, 105 Stat. 285; renumbered §3712 and amended Pub. L. 102–83, §§4(a)(2)(A)(v), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 403, 406; Pub. L. 102–547, §6(2), Oct. 28, 1992, 106 Stat. 3636; Pub. L. 103–446, title IX, §906, title XII, §1201(e)(14), Nov. 2, 1994, 108 Stat. 4677, 4685; Pub. L. 104–66, title I, §1141(b), Dec. 21, 1995, 109 Stat. 726.)

Amendments

1995—Subsecs. (l), (m). Pub. L. 104–66 redesignated subsec. (m) as (l) and struck out former subsec. (l) which read as follows: "The Secretary's annual report to Congress shall include a report on operations under this section, including experience with compliance with the warranty required by subsection (i) and the experience regarding defaults and foreclosures."

1994—Subsec. (c)(3)(D). Pub. L. 103–446, §1201(e)(14)(A)(i), inserted "of" after "subparagraph (B)" in introductory provisions.

Subsec. (c)(3)(E). Pub. L. 103–446, §1201(e)(14)(A)(ii), substituted "subparagraph (B)(ii) of this paragraph" for "subparagraph (B)(ii) of this subsection".

Subsec. (h)(2). Pub. L. 103–446, §906(a), amended par. (2) generally. Prior to amendment, par. (2) required the Secretary to inspect the manufacturing process of manufacturers of manufactured homes sold to veterans and provided for the delegation of that function to the Secretary of Housing and Urban Development.

Subsec. (j). Pub. L. 103–446, §906(b), substituted "in the case of—" and pars. (1) to (3) for "in the case of manufactured homes constructed by any manufacturer who refuses to permit the inspections provided for in subsection (h) of this section; or in the case of manufactured homes which are determined by the Secretary not to conform to the aforesaid standards; or where the manufacturer of manufactured homes fails or is unable to discharge the manufacturer's obligations under the warranty."

Subsec. (l). Pub. L. 103–446, §906(c), struck out "the results of inspections required by subsection (h) of this section," after "including" and "of this section" after "subsection (i)".

Subsec. (m). Pub. L. 103–446, §1201(e)(14)(B), substituted "sections 3704(d) and 3721 of this title" for "section 3704(d) and section 3721 of this chapter".

1992—Subsec. (a)(4)(A)(iv). Pub. L. 102–547 amended cl. (iv) generally. Prior to amendment, cl. (iv) read as follows: "the amount of the guaranty of the loan may not exceed the original guaranty amount of the loan being refinanced;".

1991Pub. L. 102–83, §5(a), renumbered section 1812 of this title as this section.

Subsec. (a)(4)(A)(iii). Pub. L. 102–83, §5(c)(1), substituted "3703(c)(3)(A)" for "1803(c)(3)(A)".

Subsec. (a)(4)(B). Pub. L. 102–83, §5(c)(1), substituted "3702(b)" for "1802(b)".

Pub. L. 102–83, §4(a)(2)(A)(v), substituted "Secretary" for "Veterans' Administration".

Subsec. (a)(5)(A). Pub. L. 102–83, §5(c)(1), substituted "3710(a)(9)(B)(ii)" for "1810(a)(9)(B)(ii)" in introductory provisions, "3704(c)(2)" for "1804(c)(2)" in cl. (i), and "3703(c)(3)(E)" for "1803(c)(3)(E)" in cl. (ii)(IV).

Subsec. (a)(5)(B). Pub. L. 102–83, §5(c)(1), substituted "3710(a)(9)(B)(ii)" for "1810(a)(9)(B)(ii)" and "3702(b)" for "1802(b)".

Pub. L. 102–83, §4(a)(2)(A)(v), substituted "Secretary" for "Veterans' Administration".

Subsec. (b)(2). Pub. L. 102–83, §5(c)(1), substituted "3702(b)" for "1802(b)".

Subsec. (c)(1). Pub. L. 102–83, §5(c)(1), substituted "3702(d)" for "1802(d)".

Subsec. (c)(4). Pub. L. 102–83, §5(c)(1), substituted "3710 or 3711" for "1810 or 1811" and "3710" for "1810".

Subsec. (c)(5). Pub. L. 102–54, §14(c)(8)(A), substituted "for purposes specified in this section" for "under this section".

Subsec. (e)(2). Pub. L. 102–83, §5(c)(1), substituted "3710(g)" for "1810(g)".

Subsec. (e)(5). Pub. L. 102–83, §5(c)(1), substituted "3704(c)(2)" for "1804(c)(2)".

Subsec. (l). Pub. L. 102–54, §14(c)(8)(B), struck out ", beginning 12 months following October 23, 1970," after "shall".

Subsec. (m). Pub. L. 102–83, §5(c)(1), substituted "3704(d)" for "1804(d)" and "3721" for "1821".

1990—Subsec. (c)(3). Pub. L. 101–508 amended par. (3) generally. Prior to amendment, par. (3) read as follows: "The Secretary's guaranty may not exceed the lesser of (A) the lesser of $20,000 or 40 percent of the loan, or (B) the maximum amount of guaranty entitlement available to the veteran as specified in paragraph (4) of this subsection. Payment of a claim under such guaranty shall be made only after liquidation of the security for the loan and the filing of an accounting with the Secretary. In any such accounting the Secretary shall permit to be included therein accrued unpaid interest from the date of the first uncured default to such cutoff date as the Secretary may establish, and the Secretary shall allow the holder of the loan to charge against the liquidation or resale proceeds, accrued interest from the cutoff date established to such further date as the Secretary may determine and such costs and expenses as the Secretary determines to be reasonable and proper. The liability of the United States under the guaranty provided for by this section shall decrease or increase pro rata with any decrease or increase of the amount of the unpaid portion of the obligation."

1989—Subsecs. (a) to (h)(2)(A). Pub. L. 101–237, §313(b)(1), substituted "Secretary" and "Secretary's" for "Administrator" and "Administrator's", respectively, wherever appearing.

Subsec. (h)(2)(B). Pub. L. 101–237, §313(b)(7), substituted "Secretary of Housing and Urban Development pursuant" for "Secretary pursuant" and substituted "Secretary of Veterans Affairs" for "Administrator" wherever appearing.

Subsecs. (i) to (l). Pub. L. 101–237, §313(b)(1), substituted "Secretary" and "Secretary's" for "Administrator" and "Administrator's", respectively, wherever appearing.

1988Pub. L. 100–322, §415(b)(4)(C), renumbered section 1819 of this title as this section.

Subsecs. (a)(4)(C), (b)(1), (c)(2). Pub. L. 100–322, §415(b)(4)(A), substituted "for purposes specified in this section" for "under this section".

Subsec. (c)(3). Pub. L. 100–322, §415(b)(4)(B)(i), inserted "as specified in paragraph (4) of this subsection" before period at end.

Pub. L. 100–253, §3(b)(1), substituted "the lesser of (A) the lesser of $20,000 or 40 percent of the loan, or (B) the maximum amount of guaranty entitlement available to the veteran" for "40 percent of the loan, or $20,000, whichever is less, reduced by the amount of entitlement previously used by the veteran under this chapter and not restored as a result of the exclusion in section 1802(b) of this title".

Subsec. (c)(4). Pub. L. 100–322, §415(b)(4)(A), (B)(ii), (iii), substituted "for purposes specified in this section" for "under this section" in two places, "for purposes specified in section 1810" for "under section 1810", and "for purposes specified in such section 1810" for "under such section 1810".

Pub. L. 100–253, §3(b)(2), substituted "maximum amount of guaranty entitlement available to a veteran under this section shall be $20,000 reduced by the amount of any such entitlement previously used by the veteran" for "amount of any loan guaranteed under this section shall not exceed an amount equal to 95 percent of the purchase price of the property securing such loan".

Subsec. (c)(5). Pub. L. 100–253, §3(b)(3), added par. (5).

Subsecs. (d)(1), (e) to (g), (h)(1). Pub. L. 100–322, §415(b)(4)(A), substituted "for purposes specified in this section" for "under this section".

1987—Subsec. (a)(4)(A)(ii). Pub. L. 100–198, §7(b)(1), struck out "and such manufactured home (or a manufactured home on such lot) must be owned and occupied by the veteran as such veteran's home" before semicolon at end.

Subsec. (a)(4)(A)(vi). Pub. L. 100–198, §7(b)(2)–(4), added cl. (vi).

Subsec. (a)(5)(A)(i). Pub. L. 100–198, §8(b)(1), inserted "(except as provided in section 1804(c)(2) of this title)" after "by the veteran".

Subsec. (c)(3). Pub. L. 100–198, §3(b)(1), amended first sentence generally. Prior to amendment, first sentence read as follows: "The Administrator's guaranty may not exceed the lesser of 50 per centum of the loan amount or the maximum loan guaranty entitlement available, not to exceed $20,000."

Subsec. (c)(4). Pub. L. 100–198, §3(b)(2), amended first sentence generally. Prior to amendment, first sentence read as follows: "The amount of guaranty entitlement available to a veteran under this section shall not be more than $20,000, less the amount of any such entitlement as may have been used under this section."

Subsec. (e)(5). Pub. L. 100–198, §8(b)(2), inserted before semicolon at end "; except that the requirement of this clause shall not apply (A) in the case of a guaranteed loan that is for the purpose described in paragraph (1)(F) of subsection (a), or (B) in the case described in section 1804(c)(2)".

1986—Subsec. (e)(2). Pub. L. 99–576 inserted "as determined in accordance with the regulations prescribed under section 1810(g) of this title and" after "credit risk".

1984—Subsec. (a)(5). Pub. L. 98–223 inserted "or section 1810(a)(9)(B)(ii) of this title" after "paragraph (1)(G) of this subsection" in two places.

1982Pub. L. 97–306, §406(c)(2)(C), substituted "Loans to purchase manufactured homes and lots" for "Loans to purchase mobile homes and mobile home lots" in section catchline.

Subsec. (a)(1)(A) to (E). Pub. L. 97–306, §406(c)(2)(A), substituted "manufactured" for "mobile" wherever appearing.

Subsec. (a)(1)(G). Pub. L. 97–306, §406(a)(1), added cl. (G).

Subsec. (a)(2). Pub. L. 97–306, §406(a)(2), (c)(2)(A), inserted "(other than the refinancing under clause (F) of such paragraph of an existing loan)" after "subsection" and substituted "manufactured" for "mobile".

Subsec. (a)(3). Pub. L. 97–306, §406(a)(3), (c)(2)(A), substituted "(C), (E), or (G)" for "(C) or (E)", and "manufactured" for "mobile".

Subsec. (a)(4)(A)(ii). Pub. L. 97–306, §406(c)(2)(A), (B), substituted "manufactured" for "mobile", wherever appearing and "manufactured-home" for "mobile-home" wherever appearing.

Subsec. (a)(5). Pub. L. 97–306, §406(a)(4), added par. (5).

Subsecs. (b)(1), (c)(1), (d)(1)(B), (C), (D), (e)(3), (4)(A), (B), (6), (f), (h) to (k). Pub. L. 97–306, §406(c)(2)(A), substituted "manufactured" for "mobile" wherever appearing.

Subsec. (l). Pub. L. 97–295 substituted "October 23, 1970" for "the date of enactment of the Veterans' Housing Act of 1970".

Subsec. (m). Pub. L. 97–306, §406(c)(2)(A), substituted "manufactured" for "mobile" wherever appearing.

1981—Subsec. (a)(1). Pub. L. 97–72, §303(h), substituted "housing loan benefits" for "benefits".

Subsec. (b)(2). Pub. L. 97–72, §303(i), substituted "housing loan benefits" for "loan guaranty benefits".

Subsec. (d)(1). Pub. L. 97–66 increased from 15 years, 32 days to 20 years, 32 days the allowable maturity of a loan for purchase of a single-wide mobile home or a single-wide mobile home and a lot, from 20 years, 32 days to 23 years, 32 days the allowable maturity of a loan for purchase of a double-wide mobile home, and from 20 years, 32 days to 25 years, 32 days the allowable maturity of a loan for purchase of a double-wide mobile home and a lot.

1980—Subsec. (a)(1)(F). Pub. L. 96–385, §401(b)(1), added cl. (F).

Subsec. (a)(4). Pub. L. 96–385, §401(b)(2), added par. (4).

Subsec. (c)(3), (4). Pub. L. 96–385, §402(c), substituted "$20,000" for "$17,500" once in par. (3) and twice in par. (4).

1978—Subsec. (a). Pub. L. 95–476, §107(a), substituted provisions that loans to eligible veterans could be guaranteed if such loans were for certain approved purposes, that such loans for any approved purpose could include an amount determined by the Administrator to be appropriate to cover the cost of necessary lot preparation, and that any loan under cls. (C) or (E) of par. (1) were to be considered one loan, evidenced either by a single instrument or separate instruments for the portions of the loan financing the purchase of the mobile home and the purchase and preparation of the lot for provision that any eligible veteran who had maximum entitlement available for use would be eligible for either the mobile home loan guaranty benefit or the mobile home lot loan guaranty benefit or both but that use of either would preclude use of any home loan guaranty entitlement under any other section until the loan guaranteed under this section had been paid in full.

Subsec. (b)(1). Pub. L. 95–476, §107(a), substituted provision that use of benefit entitlement under this section for purchase of a mobile home unit would preclude use of any remainder of entitlement for purchase of an additional mobile home unit until the first unit had been disposed of or destroyed by natural hazard for provision that a loan to purchase a mobile home under this section could include amounts to finance purchase of lot and necessary preparation of lot.

Subsec. (b)(2). Pub. L. 95–476, §107(a), substituted provision authorizing Administrator to restore full benefit entitlement to a veteran under this chapter when conditions prescribed in section 1802(b) of this title had been met for provision authorizing loans to purchase and prepare a mobile home lot when veteran already owned such a mobile home.

Subsec. (c)(1). Pub. L. 95–476, §107(b)(1), struck out provisions relating to eligible purposes of mobile home loans under this section.

Subsec. (c)(3). Pub. L. 95–476, §107(b)(2), substituted provision limiting liability of Administrator under loan guaranty to a maximum of lesser of 50 per centum of loan amount or maximum loan guaranty entitlement available, not to exceed $17,500, for provision limiting Administrator's guaranty to a maximum of 50 per centum of loan amount.

Subsec. (c)(4). Pub. L. 95–476, §107(b)(3), added par. (4).

Subsec. (d). Pub. L. 95–476, §107(c), struck out provisions establishing maximum loan amounts for guaranteed mobile home loans and increased maturity for single-wide mobile home loans and lot-only loans from 12 years and 32 days to 15 years and 32 days.

Subsec. (e)(4). Pub. L. 95–476, §107(d), substituted provisions authorizing Administrator to determine reasonable maximum loan amounts for purchase of new or used mobile homes and purchase and preparation of mobile home lots for provision requiring, as a condition to guaranty, that loans not exceed certain maximum loan amounts for such purchases or preparation.

Subsec. (g). Pub. L. 95–476, §107(e), redesignated subsec. (h) as (g). Former subsec. (g), limiting to a single time the restoration of loan guaranty entitlement for any veteran for the purchase of a mobile home, was struck out.

Subsec. (h)(1). Pub. L. 95–476, §107(e), (f), redesignated subsec. (i) as (h)(1) and struck out provision authorizing the Administrator to inspect the mobile home manufacturing process periodically as well as on-site inspections of existing mobile home units to assure compliance with certain standards of planning, construction, and general acceptability. Former subsec. (h) redesignated (g).

Subsec. (h)(2). Pub. L. 95–476, §107(f), added par. (2).

Subsec. (i). Pub. L. 95–476, §107(e), (g)(1), redesignated subsec. (j) as (i) and substituted "subsection (h)" for "subsection (i)". Former subsec. (i) redesignated (h).

Subsec. (j). Pub. L. 95–476, §107(e), (g)(1), redesignated subsec. (k) as (j) and substituted "subsection (h)" for "subsection (i)". Former subsec. (j) redesignated (i).

Subsec. (k). Pub. L. 95–476, §107(e), redesignated subsec. (l) as (k). Former subsec. (k) redesignated (j).

Subsec. (l). Pub. L. 95–476, §107(e), (g), redesignated subsec. (m) as (l) and substituted "subsection (h)" and "subsection (i)" for "subsection (i)" and "subsection (j)", respectively. Former subsec. (l) redesignated (k).

Subsecs. (m), (n). Pub. L. 95–476, §107(e), redesignated subsec. (n) as (m). Former subsec. (m) redesignated (l).

1976—Subsec. (c)(1). Pub. L. 94–324, §7(20), substituted "the Administrator determines" for "he determines".

Subsec. (c)(3). Pub. L. 94–324, §§5, 7(20), increased amount of Administrator's guaranty from 30 per centum of the loan to 50 per centum of the loan and substituted "the Administrator" for "he" wherever appearing.

Subsec. (d)(1). Pub. L. 94–324, §7(21), substituted "the Administrator's" for "his".

Subsec. (d)(3). Pub. L. 94–324, §7(21), substituted "the Administrator shall" for "he shall".

Subsec. (e)(4). Pub. L. 94–324, §7(22), substituted "subsection" for "subparagraph".

Subsec. (e)(5). Pub. L. 94–324, §7(22), substituted "the veteran will" for "he will" and "the veteran's" for "his".

Subsec. (f). Pub. L. 94–324, §7(23), substituted "the Administrator determines" for "he determines".

Subsec. (h). Pub. L. 94–324, §7(23), substituted "the Administrator determines" for "he determines" in two places and "the Administrator has" for "he has".

Subsec. (k). Pub. L. 94–324, §7(23), substituted "the manufacturer's obligations" for "his obligations".

Subsec. (l). Pub. L. 94–324, §7(23), substituted "the Administrator determines" for "he determines".

1974—Subsec. (a). Pub. L. 93–569, §5(1), inserted "or the mobile home lot loan guaranty benefit, or both," after "loan guaranty benefit" wherever appearing, and struck out "mobile home" before "loan guaranteed under this section".

Subsec. (b)(1). Pub. L. 93–569, §5(2), designated existing provisions as subsec. (b)(1) and redesignated cls. (1) and (2) as (A) and (B), respectively.

Subsec. (b)(2). Pub. L. 93–569, §5(2), added par. (2).

Subsec. (c)(1). Pub. L. 93–569, §5(3), (4), redesignated cls. (1) and (2) as (A) and (B), respectively, and in cl. (A) as so redesignated, inserted provision relating to purchase of a lot on which to place a mobile home previously purchased by the veteran, whether or not such mobile home was purchased with a loan guaranteed, insured or made by another Federal agency, and substituted "or for the purchase of a used mobile home which meets or exceeds minimum requirements for construction, design, and general acceptability prescribed by the Administrator," for "or for the purchase of a used mobile home which is the security for a prior loan guaranteed or made under this section or for a loan guaranteed, insured or made by another Federal agency."

Subsec. (d)(1). Pub. L. 93–569, §5(5), substituted ", whether or not the mobile home was financed with assistance under this section, and in the case of necessary site preparation, the loan amount for such purposes may not exceed the reasonable value of such lot" for "financed through the assistance of this section and in the case of necessary site preparation, the loan amount shall not be increased by an amount in excess of the reasonable value of such lot".

Subsec. (d)(2)(A). Pub. L. 93–569, §5(6), substituted "$12,500" for "$10,000," and "single wide mobile home only" for "mobile home only,".

Subsec. (d)(2)(B). Pub. L. 93–569, §5(6), increased from $15,000 to $20,000, and from fifteen years and thirty-two days to twenty years and thirty-two days the amount and period of the loan, struck out the $10,000 maximum allowable amount for the mobile home, and restricted the amount of the loan to the purchase of a double-wide mobile home instead of a mobile home and undeveloped lot.

Subsec. (d)(2)(C). Pub. L. 93–569, §5(6), substituted "$20,000" for "$17,500," "$12,500" for "$10,000," "single-wide mobile home" for "mobile home" and "an undeveloped lot" for "a suitably developed lot," and inserted provision including such amount as is appropriate to cover cost of site preparation.

Subsec. (d)(2)(D) to (H). Pub. L. 93–569, §5(6), added subpars. (D) to (H).

Subsec. (e)(3). Pub. L. 93–569, §5(7), inserted "purchased with the proceeds of the loan and on" after "mobile home".

Subsec. (f). Pub. L. 93–569, §5(8), inserted "and mobile home lot loans" after "loans".

Subsec. (i). Pub. L. 93–569, §5(9), inserted provision prohibiting the guarantee of a loan for the purchase of a lot on which to place a mobile home unless the lot meets prescribed standards.

Subsec. (n). Pub. L. 93–569, §5(10), inserted "and mobile home lot loans" after "mobile home loans".

Subsec. (o). Pub. L. 93–569, §5(11), struck out subsec. (o) which prohibited the making or guaranteeing of loans on and after July 1, 1975, except upon prior commitment.

Effective Date of 1990 Amendment

Pub. L. 101–508, title VIII, §8031(b), Nov. 5, 1990, 104 Stat. 1388–348, provided that: "The amendment made by this section [amending this section] shall apply to claims filed with the Secretary of Veterans Affairs on or after the date of the enactment of this Act [Nov. 5, 1990]."

Effective Date of 1988 Amendment

Amendment by Pub. L. 100–253 applicable to loans closed on or after Feb. 1, 1988, except for loans for which guaranty commitment was made on or before Dec. 31, 1987, see section 3(c) of Pub. L. 100–253, set out as a note under section 3703 of this title.

Effective Date of 1987 Amendment

Amendment by section 3(b) of Pub. L. 100–198 applicable to loans closed on or after Feb. 1, 1988, but not applicable to any loan for which a guaranty commitment is made on or before Dec. 31, 1987, see section 3(d) of Pub. L. 100–198, set out as a note under section 3703 of this title.

Amendment by section 7(b) of Pub. L. 100–198 applicable to loans made more than 30 days after Dec. 21, 1987, see section 7(d) of Pub. L. 100–198, set out as a note under section 3710 of this title.

Amendment by section 8(b) of Pub. L. 100–198 applicable with respect to loans made more than 30 days after Dec. 21, 1987, see section 8(c) of Pub. L. 100–198, set out as a note under section 3704 of this title.

Effective Date of 1981 Amendments

Amendment by Pub. L. 97–72 effective at end of 180-day period beginning on Nov. 3, 1981, see section 305 of Pub. L. 97–72, set out as an Effective Date note under section 3741 of this title.

Amendment by Pub. L. 97–66 effective Oct. 17, 1981, see section 701(b)(1) of Pub. L 97–66, set out as a note under section 1114 of this title.

Effective Date of 1980 Amendment

Amendment by sections 401(b) and 402(c) of Pub. L. 96–385 effective Oct. 7, 1980, and Oct. 1, 1980, respectively, see section 601(b), (d) of Pub. L. 96–385, set out as a note under section 1114 of this title.

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–476 effective Oct. 1, 1978, see section 108(a) of Pub. L. 95–476, set out as a note under section 3702 of this title.

Effective Date of 1976 Amendment

Amendment by sections 5 and 7(20)–(23) of Pub. L. 94–324 effective July 1, 1976, and June 30, 1976, respectively, see section 9(a), (b) of Pub. L. 94–324, set out as a note under section 3701 of this title.

Effective Date of 1974 Amendment

Amendment by Pub. L. 93–569 effective Dec. 31, 1974, see section 10 of Pub. L. 93–569, set out as a note under section 3702 of this title.

Effective Date

Pub. L. 91–506, §8, Oct. 23, 1970, 84 Stat. 1114, provided that: "Section 5 of this Act [enacting this section] shall become effective sixty days following the date of enactment [Oct. 23, 1970]."

§3713. Release from liability under guaranty

(a) Whenever any veteran disposes of residential property securing a guaranteed, insured, or direct housing loan obtained by the veteran, the Secretary, upon application made by such veteran and by the transferee incident to such disposal, shall issue to such veteran in connection with such disposal a release relieving the veteran of all further liability to the Secretary on account of such loan (including liability for any loss resulting from any default of the transferee or any subsequent purchaser of such property) if the Secretary has determined, after such investigation as the Secretary may deem appropriate, that (1) the loan is current, and (2) the purchaser of such property from such veteran (A) is obligated by contract to purchase such property and to assume full liability for the repayment of the balance of the loan remaining unpaid, and has assumed by contract all of the obligations of the veteran under the terms of the instruments creating and securing the loan, and (B) qualifies from a credit standpoint, to the same extent as if the transferee were a veteran eligible for purposes specified in section 3710 of this title, for a guaranteed or insured or direct loan in an amount equal to the unpaid balance of the obligation for which the transferee has assumed liability.

(b) If any veteran disposes of residential property securing a guaranteed, insured, or direct housing loan obtained by the veteran under this chapter without receiving a release from liability with respect to such loan under subsection (a), and a default subsequently occurs which results in liability of the veteran to the Secretary on account of the loan, the Secretary may relieve the veteran of such liability if the Secretary determines, after such investigation as the Secretary deems appropriate, that the property was disposed of by the veteran in such a manner, and subject to such conditions, that the Secretary would have issued the veteran a release from liability under subsection (a) with respect to the loan if the veteran had made application therefor incident to such disposal. Failure of a transferee to assume by contract all of the liabilities of the original veteran-borrower shall bar such release of liability only in cases in which no acceptable transferee, either immediate or remote, is legally liable to the Secretary for the indebtedness of the original veteran-borrower arising from termination of the loan. The failure of a veteran to qualify for release from liability under this subsection does not preclude relief from being granted under section 5302(b) of this title, if the veteran is eligible for relief under that section.

(c) This section shall apply only to loans for which commitments are made before March 1, 1988.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1212, §1817; Pub. L. 92–328, title II, §204, June 30, 1972, 86 Stat. 397; Pub. L. 94–324, §7(18), (19), June 30, 1976, 90 Stat. 722; Pub. L. 97–72, title III, §303(f), Nov. 3, 1981, 95 Stat. 1060; Pub. L. 100–198, §10(a)(2), Dec. 21, 1987, 101 Stat. 1323; renumbered §1813 and amended Pub. L. 100–322, title IV, §415(b)(2), May 20, 1988, 102 Stat. 550; Pub. L. 101–237, title III, §313(b)(1), Dec. 18, 1989, 103 Stat. 2077; Pub. L. 102–40, title IV, §402(d)(1), May 7, 1991, 105 Stat. 239; renumbered §3713 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 103–446, title XII, §1201(e)(15), Nov. 2, 1994, 108 Stat. 4686.)

Amendments

1994—Subsec. (b). Pub. L. 103–446 before period at end substituted "section 5302(b) of this title, if the veteran is eligible for relief under that section" for "subsection 5302(b) of this title, if eligible thereunder".

1991Pub. L. 102–83, §5(a), renumbered section 1813 of this title as this section.

Subsec. (a). Pub. L. 102–83, §5(c)(1), substituted "3710" for "1810".

Subsec. (b). Pub. L. 102–40 substituted "5302(b)" for "3102(b)".

1989—Subsecs. (a), (b). Pub. L. 101–237 substituted "Secretary" for "Administrator" wherever appearing.

1988Pub. L. 100–322, §415(b)(2)(B), renumbered section 1817 of this title as this section.

Subsec. (a). Pub. L. 100–322, §415(b)(2)(A), substituted "for purposes specified in section 1810" for "under section 1810".

1987—Subsec. (c). Pub. L. 100–198 added subsec. (c).

1981—Subsec. (a). Pub. L. 97–72, §303(f)(1), substituted "direct housing loan" for "direct loan".

Subsec. (b). Pub. L. 97–72, §303(f)(2), substituted "or direct housing loan obtained" for "or direct loan obtained".

1976—Subsec. (a). Pub. L. 94–324, §7(18), substituted "the veteran" for "him" in two places, "the Administrator may deem" for "he may deem", "the transferee were a veteran" for "he were a veteran", "the transferee has assumed" for "he has assumed", and "is obligated" for "has obligated himself".

Subsec. (b). Pub. L. 94–324, §7(19), substituted "obtained by the veteran" for "obtained by him", "the Administrator determines" for "he determines", and "the Administrator deems" for "he deems".

1972Pub. L. 92–328 designated existing provisions as subsec. (a) and added subsec. (b).

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–72 effective at end of 180-day period beginning on Nov. 3, 1981, see section 305 of Pub. L. 97–72, set out as an Effective Date note under section 3741 of this title.

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–324 effective June 30, 1976, see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.

Effective Date of 1972 Amendment

Pub. L. 92–328, title III, §301(c), June 30, 1972, 86 Stat. 398, provided that: "Sections 201 through 206 of this Act [amending this section and sections 210, 1820 [now 3720], 3102 [now 5302], and 3503 [now 6103] of this title, and enacting provisions set out as a note under section 5302 of this title] shall take effect upon the date of enactment of this Act [June 30, 1972]."

§3714. Assumptions; release from liability

(a)(1) Except as provided in subsection (f) of this section, if a veteran or any other person disposes of residential property securing a loan guaranteed, insured, or made under this chapter and the veteran or other person notifies the holder of the loan in writing before the property is disposed of, the veteran or other person, as the case may be, shall be relieved of all further liability to the Secretary with respect to the loan (including liability for any loss resulting from any default of the purchaser or any subsequent owner of the property) and the application for assumption shall be approved if the holder determines that—

(A) the loan is current; and

(B) the purchaser of the property from such veteran or other person—

(i) is obligated by contract to purchase such property and to assume full liability for the repayment of the balance of the loan remaining unpaid and has assumed by contract all of the obligations of the veteran under the terms of the instruments creating and securing the loan; and

(ii) qualifies from a credit standpoint, to the same extent as if the purchaser were a veteran eligible under section 3710 of this title, for a guaranteed or insured or direct loan in an amount equal to the unpaid balance of the obligation for which the purchaser is to assume liability.


(2) For the purposes of paragraph (1), paragraph (3), and paragraph (4)(C)(ii) of this subsection, the Secretary shall be considered to be the holder of the loan if the actual holder is not an approved lender described in section 3702.

(3) If the holder of the loan determines that the loan is not current or that the purchaser of the property does not meet the requirements of paragraph (1)(B) of this subsection, the holder shall—

(A) notify the transferor and the Secretary of such determination; and

(B) notify the transferor that the transferor may appeal the determination to the Secretary.


(4)(A) Upon the appeal of the transferor after a determination described in paragraph (3) is made, the Secretary shall, in a timely manner, review and make a determination (or a redetermination in any case in which the Secretary made the determination described in such paragraph) with respect to whether the loan is current and whether the purchaser of the property meets the requirements of paragraph (1)(B) of this subsection. The Secretary shall transmit, in writing, a notice of the nature of such determination to the transferor and the holder and shall inform them of the action that shall or may be taken under subparagraph (B) of this paragraph as a result of the determination of the Secretary.

(B)(i) If the Secretary determines under subparagraph (A) of this paragraph that the loan is current and that the purchaser meets the requirements of paragraph (1)(B) of this subsection, the holder shall approve the assumption of the loan, and the transferor shall be relieved of all liability to the Secretary with respect to such loan.

(ii) If the Secretary determines under subparagraph (A) of this paragraph that the purchaser does not meet the requirements of paragraph (1)(B) of this subsection, the Secretary may direct the holder to approve the assumption of the loan if—

(I) the Secretary determines that the transferor of the property is unable to make payments on the loan and has made reasonable efforts to find a buyer who meets the requirements of paragraph (1)(B) of this subsection and that, as a result, the proposed transfer is in the best interests of the Department and the transferor;

(II) the transferor has requested, within 15 days after receiving the notice referred to in subparagraph (A) of this paragraph, that the Secretary approve the assumption; and

(III) the transferor will, upon assumption of the loan by the purchaser, be secondarily liable on the loan.


(C) If—

(i) the loan is not approved for assumption under subparagraph (B) of this paragraph or paragraph (1) of this subsection; or

(ii) no appeal is made by the transferor under subparagraph (A) of this paragraph within 30 days after the holder informs the transferor of its determination under paragraph (3) of this subsection,


the holder may demand immediate, full payment of the principal, and all interest earned thereon, of such loan if the transferor disposes of the property.

(b) If a person disposes of residential property described in subsection (a)(1) of this section and the person fails to notify the holder of the loan before the property is disposed of, the holder, upon learning of such action by the person, may demand immediate and full payment of the principal, interest, and all other amounts owing under the terms of the loan.

(c)(1) In any case in which the holder of a loan described in subsection (a)(1) of this section has knowledge of a person's disposing of residential property securing the loan, the holder shall notify the Secretary of such action.

(2) If the holder fails to notify the Secretary in such a case, the holder shall be liable to the Secretary for any damage sustained by the Secretary as a result of the holder's failure, as determined at the time the Secretary is required to make payments in accordance with any insurance or guaranty provided by the Secretary with respect to the loan concerned.

(d) With respect to a loan guaranteed, insured, or made under this chapter, the Secretary shall provide, by regulation, that at least one instrument evidencing either the loan or the mortgage or deed of trust therefor, shall conspicuously contain, in such form as the Secretary shall specify, a notice in substantially the following form: "This loan is not assumable without the approval of the Department of Veterans Affairs or its authorized agent".

(e) The Secretary shall establish in regulations a reasonable amount as the maximum amount that a lender may charge for processing an application for a creditworthiness determination and assumption of a loan pursuant to this section. Such regulations shall establish requirements for the timely processing of applications for acceptance of assumptions.

(f)(1) This section shall apply—

(A) in the case of loans other than loans to finance the purchase of real property described in section 3733(a)(1) of this title, only to loans for which commitments are made on or after March 1, 1988; and

(B) in the case of loans to finance the purchase of such property, only to loans which are closed after January 1, 1989.


(2) This section shall not apply to a loan which the Secretary has sold without recourse.

(Added Pub. L. 100–198, §10(a)(1), Dec. 21, 1987, 101 Stat. 1321, §1817A; renumbered §1814, Pub. L. 100–322, title IV, §415(b)(2)(B), May 20, 1988, 102 Stat. 551; amended Pub. L. 100–689, title III, §302, Nov. 18, 1988, 102 Stat. 4176; Pub. L. 101–237, title III, §313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered §3714 and amended Pub. L. 102–83, §§4(a)(2)(B)(iv), (3), (4), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 403, 404, 406; Pub. L. 105–368, title X, §1005(b)(10), Nov. 11, 1998, 112 Stat. 3365; Pub. L. 107–103, title IV, §403, Dec. 27, 2001, 115 Stat. 993.)

Amendments

2001—Subsec. (d). Pub. L. 107–103 amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: "The Secretary shall provide that the mortgage or deed of trust and any other instrument evidencing the loan entered into by a person with respect to a loan guaranteed, insured, or made under this chapter shall contain provisions, in such form as the Secretary shall specify, implementing the requirements of this section, and shall bear in conspicuous position in capital letters on the first page of the document in type at least 2 and ½ times larger than the regular type on such page the following: 'This loan is not assumable without the approval of the Department of Veterans Affairs or its authorized agent.'."

1998—Subsec. (f)(1)(B). Pub. L. 105–368 substituted "after January 1, 1989" for "more than 45 days after the date of the enactment of the Veterans' Benefits and Programs Improvement Act of 1988".

1991Pub. L. 102–83, §5(a), renumbered section 1814 of this title as this section.

Subsec. (a)(1)(B)(ii). Pub. L. 102–83, §5(c)(1), substituted "3710" for "1810".

Subsec. (a)(2). Pub. L. 102–83, §5(c)(1), substituted "3702" for "1802".

Subsec. (a)(4)(B)(ii)(I). Pub. L. 102–83, §4(a)(3), (4), substituted "Department" for "Veterans' Administration".

Subsec. (d). Pub. L. 102–83, §4(a)(2)(B)(iv), substituted "Department of Veterans Affairs" for "Veterans' Administration".

Subsec. (f)(1)(A). Pub. L. 102–83, §5(c)(1), substituted "3733(a)(1)" for "1833(a)(1)".

1989—Subsecs. (a), (c) to (f). Pub. L. 101–237, §313(b)(1), substituted "Secretary" for "Administrator" wherever appearing.

1988Pub. L. 100–322, §415(b)(2)(B), renumbered section 1817A of this title as this section.

Subsec. (a)(1). Pub. L. 100–689, §302(1), substituted "Except as provided in subsection (f) of this section, if" for "If" and "loan guaranteed, insured, or made" for "guaranteed, insured, or direct housing loan obtained by a veteran".

Subsec. (f). Pub. L. 100–689, §302(2), amended subsec. (f) generally. Prior to amendment, subsec. (f) read as follows: "This section shall apply only to loans for which commitments are made on or after March 1, 1988."

[§§3715 to 3719. Vacant]

Codification

Prior to renumbering of sections 1801 to 1851 of this chapter as sections 3701 to 3751 by Pub. L. 102–83, §5(a), Aug. 6, 1991, 105 Stat. 406, sections 1815 to 1817A and 1819 of this chapter were renumbered and section 1818 of this chapter was repealed.

Section 1815 was renumbered section 1803(a)(2) of this title.

Section 1816 was renumbered sections 1832 and 1833 of this title.

Section 1817 was renumbered section 1813 of this title.

Section 1817A was renumbered section 1814 of this title.

Section 1818, added Pub. L. 89–358, §5(a), Mar. 3, 1966, 80 Stat. 25; amended Pub. L. 91–506, §2(e), Oct. 23, 1970, 84 Stat. 1108; Pub. L. 93–569, §8(6), (7), Dec. 31, 1974, 88 Stat. 1866, 1867; Pub. L. 94–324, §4, June 30, 1976, 90 Stat. 720; Pub. L. 95–476, title I, §106(a), Oct. 18, 1978, 92 Stat. 1499; Pub. L. 97–72, title III, §303(g), Nov. 3, 1981, 95 Stat. 1060; Pub. L. 97–295, §4(66), Oct. 12, 1982, 96 Stat. 1310, which related to service after Jan. 31, 1955, and prior to Aug. 5, 1964, or after May 7, 1975, was repealed by Pub. L. 100–322, title IV, §415(b)(3), May 20, 1988, 102 Stat. 551.

Section 1819 was renumbered section 1812 of this title.

SUBCHAPTER III—ADMINISTRATIVE PROVISIONS

§3720. Powers of Secretary

(a) Notwithstanding the provisions of any other law, with respect to matters arising by reason of this chapter, the Secretary may—

(1) sue and be sued in the Secretary's official capacity in any court of competent jurisdiction, State or Federal, but nothing in this clause shall be construed as authorizing garnishment or attachment against the Secretary, the Department of Veterans Affairs, or any of its employees;

(2) subject to specific limitations in this chapter, consent to the modification, with respect to rate of interest, time of payment of principal or interest or any portion thereof, security or other provisions of any note, contract, mortgage or other instrument securing a loan which has been guaranteed, insured, made or acquired under this chapter;

(3) pay, or compromise, any claim on, or arising because of, any such guaranty or insurance;

(4) pay, compromise, waive or release any right, title, claim, lien or demand, however acquired, including any equity or any right of redemption;

(5) purchase at any sale, public or private, upon such terms and for such prices as the Secretary determines to be reasonable, and take title to, property, real, personal or mixed; and similarly sell, at public or private sale, exchange, assign, convey, or otherwise dispose of any such property; and

(6) complete, administer, operate, obtain and pay for insurance on, and maintain, renovate, repair, modernize, lease, or otherwise deal with any property acquired or held pursuant to this chapter. The acquisition of any such property shall not deprive any State or political subdivision thereof of its civil or criminal jurisdiction of, on, or over such property (including power to tax) or impair the rights under the State or local law of any persons on such property. Without regard to section 3302(b) of title 31 or any other provision of law not expressly in limitation of this paragraph, the Secretary may permit brokers utilized by the Secretary in connection with such properties to deduct from rental collections amounts covering authorized fees, costs, and expenses incurred in connection with the management, repair, sale, or lease of any such properties and remit the net balances to the Secretary.


(b) The powers granted by this section may be exercised by the Secretary without regard to any other provision of law not enacted expressly in limitation of this section, which otherwise would govern the expenditure of public funds, except that division C (except sections 3302, 3501(b), 3509, 3906, 4710, and 4711) of subtitle I of title 41 shall apply to any contract for services or supplies on account of any property acquired pursuant to this section.

(c) The financial transactions of the Secretary incident to, or arising out of, the guaranty or insurance of loans pursuant to this chapter, and the acquisition, management, and disposition of property, real, personal, or mixed, incident to such activities and pursuant to this section, shall be final and conclusive upon all officers of the Government.

(d) The right to redeem provided for by section 2410(c) of title 28 shall not arise in any case in which the subordinate lien or interest of the United States derives from a guaranteed or insured loan.

[(e) Repealed. Pub. L. 105–368, title VI, §602(c)(1), Nov. 11, 1998, 112 Stat. 3346.]

(f) Whenever loss, destruction, or damage to any residential property securing loans guaranteed, insured, made, or acquired by the Secretary under this chapter occurs as the result of a major disaster as determined by the President under the Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.), the Secretary shall (1) provide counseling and such other service to the owner of such property as may be feasible and shall inform such owner concerning the disaster assistance available from other Federal agencies and from State or local agencies, and (2) pursuant to subsection (a)(2) of this section, extend on an individual case basis such forebearance or indulgence to such owner as the Secretary determines to be warranted by the facts of the case and the circumstances of such owner.

(g) The Secretary shall, at the request of the Secretary of Housing and Urban Development and without reimbursement, certify to such Secretary whether an applicant for assistance under any law administered by the Department of Housing and Urban Development is a veteran.

(h) The Secretary may, upon such terms and conditions as the Secretary considers appropriate, issue or approve the issuance of, and guarantee the timely payment of principal and interest on, certificates or other securities evidencing an interest in a pool of mortgage loans made in connection with the sale of properties acquired under this chapter.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1213, §1820; Pub. L. 88–151, §1, Oct. 17, 1963, 77 Stat. 271; Pub. L. 88–560, title VII, §701(e)(1), Sept. 2, 1964, 78 Stat. 800; Pub. L. 89–625, Oct. 4, 1966, 80 Stat. 874; Pub. L. 89–769, §3(c), Nov. 6, 1966, 80 Stat. 1316; Pub. L. 90–448, title VIII, §807(h), Aug. 1, 1968, 82 Stat. 545; Pub. L. 91–606, title II, §233, Dec. 31, 1970, 84 Stat. 1753; Pub. L. 92–328, title II, §205, June 30, 1972, 86 Stat. 397; Pub. L. 93–288, title VII, §702(l), formerly title VI, §602(l), May 22, 1974, 88 Stat. 164, renumbered title VII, §702(l), Pub. L. 103–337, div. C, title XXXIV, §3411(a)(1), (2), Oct. 5, 1994, 108 Stat. 3100; Pub. L. 94–324, §7(24)–(26), June 30, 1976, 90 Stat. 722; Pub. L. 95–117, title IV, §403(a), Oct. 3, 1977, 91 Stat. 1066; Pub. L. 97–258, §3(k)(3), Sept. 13, 1982, 96 Stat. 1065; Pub. L. 97–295, §4(67), Oct. 12, 1982, 96 Stat. 1310; Pub. L. 98–160, title VII, §702(14), Nov. 21, 1983, 97 Stat. 1009; Pub. L. 99–576, title IV, §404, Oct. 28, 1986, 100 Stat. 3281; Pub. L. 100–707, title I, §109(n), Nov. 23, 1988, 102 Stat. 4709; Pub. L. 101–237, title III, §313(b)(1), (2), Dec. 18, 1989, 103 Stat. 2077; Pub. L. 102–54, §4(a), June 13, 1991, 105 Stat. 268; renumbered §3720 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 102–291, §5(a), May 20, 1992, 106 Stat. 179; Pub. L. 102–547, §4, Oct. 28, 1992, 106 Stat. 3636; Pub. L. 104–110, title I, §101(f), Feb. 13, 1996, 110 Stat. 768; Pub. L. 104–275, title II, §201, Oct. 9, 1996, 110 Stat. 3330; Pub. L. 105–33, title VIII, §8011, Aug. 5, 1997, 111 Stat. 664; Pub. L. 105–368, title VI, §§602(c)(1), 604(a), Nov. 11, 1998, 112 Stat. 3346, 3348; Pub. L. 106–419, title IV, §402(a), Nov. 1, 2000, 114 Stat. 1861; Pub. L. 107–103, title IV, §405(b), Dec. 27, 2001, 115 Stat. 994; Pub. L. 111–350, §5(j)(3), Jan. 4, 2011, 124 Stat. 3850; Pub. L. 112–154, title VII, §702(a), Aug. 6, 2012, 126 Stat. 1205; Pub. L. 114–228, title IV, §410, Sept. 29, 2016, 130 Stat. 940; Pub. L. 115–62, title IV, §409, Sept. 29, 2017, 131 Stat. 1165; Pub. L. 115–251, title I, §123, Sept. 29, 2018, 132 Stat. 3169.)

References in Text

The Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.), referred to in subsec. (f), is Pub. L. 93–288, May 22, 1974, 88 Stat. 143, as amended, known as the Robert T. Stafford Disaster Relief and Emergency Assistance Act, which is classified principally to chapter 68 (§5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 5121 of Title 42 and Tables.

Amendments

2018—Subsec. (h). Pub. L. 115–251 struck out par. (1) designation before "The Secretary may, upon" and struck out par. (2) which read as follows: "The Secretary may not under this subsection guarantee the payment of principal and interest on certificates or other securities issued or approved after September 30, 2018."

2017—Subsec. (h)(2). Pub. L. 115–62 substituted "September 30, 2018" for "December 31, 2017".

2016—Subsec. (h)(2). Pub. L. 114–228 substituted "December 31, 2017" for "December 31, 2016".

2012—Subsec. (h)(2). Pub. L. 112–154 substituted "December 31, 2016" for "December 31, 2011".

2011—Subsec. (b). Pub. L. 111–350 substituted "division C (except sections 3302, 3501(b), 3509, 3906, 4710, and 4711) of subtitle I of title 41" for "title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251 et seq.)".

2001—Subsec. (h)(2). Pub. L. 107–103 substituted "December 31, 2011" for "December 31, 2008".

2000—Subsec. (h)(2). Pub. L. 106–419 substituted "December 31, 2008" for "December 31, 2002".

1998—Subsec. (b). Pub. L. 105–368, §604(a), substituted ", except that title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) shall apply to any contract for services or supplies on account of any property acquired pursuant to this section." for "; however, section 3709 of the Revised Statutes (41 U.S.C. 5) shall apply to any contract for services or supplies on account of any property acquired pursuant to this section if the amount of such contract exceeds the amount prescribed in clause (1) of the first sentence of such section."

Subsec. (e). Pub. L. 105–368, §602(c)(1), struck out subsec. (e), which authorized Secretary to set aside first mortgage loans and installment sales contracts owned or held by Secretary under this chapter as basis for sale of participation certificates, authorized agreements, including trust agreements, for this purpose, and set forth provisions relating to allocation, deposit, and set aside of proceeds.

1997—Subsec. (h)(2). Pub. L. 105–33 substituted "December 31, 2002" for "December 31, 1997".

1996—Subsec. (h)(2). Pub. L. 104–275 substituted "December 31, 1997" for "December 31, 1996".

Pub. L. 104–110 substituted "December 31, 1996" for "December 31, 1995".

1992—Subsec. (h). Pub. L. 102–547 substituted "December 31, 1995" for "December 31, 1992" in par. (2).

Pub. L. 102–291 added subsec. (h).

1991Pub. L. 102–83, §5(a), renumbered section 1820 of this title as this section.

Subsec. (e)(2). Pub. L. 102–83, §5(c)(1), substituted "3723 and 3724" for "1823 and 1824" in two places.

Subsec. (g). Pub. L. 102–54 added subsec. (g).

1989—Subsecs. (a) to (c), (e), (f). Pub. L. 101–237 substituted "Secretary", "Secretary's", and "Department of Veterans Affairs" for "Administrator", "Administrator's", and "Veterans' Administration", respectively, wherever appearing.

1988—Subsec. (f). Pub. L. 100–707 substituted "and Emergency Assistance Act" for "Act of 1974".

1986—Subsec. (b). Pub. L. 99–576 substituted "the amount prescribed in clause (1) of the first sentence of such section" for "$1,000".

1983—Subsec. (a)(6). Pub. L. 98–160 struck out comma after "title 31".

Subsec. (b). Pub. L. 98–160 substituted "section 3709 of the Revised Statutes (41 U.S.C. 5)" for "section 5 of title 41".

1982—Subsec. (a)(6). Pub. L. 97–258 substituted "section 3302(b) of title 31" for "section 3617, Revised Statutes (31 U.S.C. 484)".

Subsec. (f). Pub. L. 97–295 inserted "(42 U.S.C. 5121 et seq.)" after "the Disaster Relief Act of 1974".

1977—Subsec. (a)(1). Pub. L. 95–117 inserted prohibition relating to garnishment or attachment against the Administrator, etc.

1976—Subsec. (a)(1). Pub. L. 94–324, §7(24), substituted "the Administrator's" for "his".

Subsec. (a)(5). Pub. L. 94–324, §7(24), substituted "the Administrator" for "he".

Subsec. (a)(6). Pub. L. 94–324, §7(25), substituted "utilized by the Administrator" for "utilized by him".

Subsec. (e)(1). Pub. L. 94–324, §7(26), substituted "the Administrator determines" for "he determines", "by the Administrator" for "by him", "the Administrator shall periodically" for "he shall periodically", "set aside by the Administrator" for "set aside by him", "the Administrator's commitment" for "his commitment", and "to pay the Administrator's" for "to pay his".

Subsec. (e)(2). Pub. L. 94–324, §7(26), substituted "as the Administrator determines" for "as he determines".

1974—Subsec. (f). Pub. L. 93–288 substituted "Disaster Relief Act of 1974" for "Disaster Assistance Act of 1970."

1972—Subsec. (a)(4). Pub. L. 92–328 struck out provisions relating to the authority to waive or release claims, including partial or total waiver of payment, following default and loss of property.

1970—Subsec. (a)(2). Pub. L. 91–606, §233(1), substituted "a loan which has been guaranteed, insured, made or acquired under this chapter" for "a loan which has been guaranteed or insured under this chapter".

Subsec. (f). Pub. L. 91–606, §233(2), directed the Administrator in major disaster areas to provide the owner of property lost, destroyed, or damaged as the result of a major disaster with counseling and other services, to inform him of disaster assistance available from other Federal, state, or local agencies and to extend such forbearance on an individual case basis as he determines to be warranted by the facts of the case.

1968—Subsec. (e)(1). Pub. L. 90–448 substituted "Government National Mortgage Association" for "Federal National Mortgage Association" wherever appearing.

1966—Subsec. (a)(6). Pub. L. 89–625 authorized brokers utilized by Administrator in connection with properties acquired or held pursuant to this chapter to deduct from rental collections amounts covering authorized fees, costs, and expenses incurred in connection with management, repair, sale, or lease of properties and to remit the net balances to Administrator.

Subsec. (f). Pub. L. 89–769 added subsec. (f).

1964—Subsec. (e). Pub. L. 88–560 added subsec. (e).

1963—Subsec. (a)(4). Pub. L. 88–151 provided for waiver of indebtedness to the United States in certain cases arising out of default on loans guaranteed or made by the Veterans' Administration.

Effective Date of 1998 Amendment

Amendment by section 602(c)(1) of Pub. L. 105–368 effective Oct. 1, 1998, see section 602(f) of Pub. L. 105–368, set out as a note under section 2106 of this title.

Pub. L. 105–368, title VI, §604(b), Nov. 11, 1998, 112 Stat. 3348, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to contracts entered into under section 3720 of title 38, United States Code, after the end of the 60-day period beginning on the date of the enactment of this Act [Nov. 11, 1998]."

Effective Date of 1977 Amendment

Pub. L. 95–117, title IV, §403(b), Oct. 3, 1977, 91 Stat. 1066, provided that: "The amendment made by subsection (a) of this section [amending this section] shall be effective on the date of enactment of this Act [Oct. 3, 1977]."

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–324 effective June 30, 1976, see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.

Effective Date of 1974 Amendment

Amendment by Pub. L. 93–288 effective Apr. 1, 1974, see section 605 of Pub. L. 93–288, formerly set out as an Effective Date note under section 5121 of Title 42, The Public Health and Welfare.

Effective Date of 1972 Amendment

Amendment by Pub. L. 92–328 effective June 30, 1972, see section 301(c) of Pub. L. 92–328, set out as a note under section 3713 of this title.

Effective Date of 1970 Amendment

Amendment by Pub. L. 91–606 effective Dec. 31, 1970, see section 304 of Pub. L. 91–606, set out as a note under section 165 of Title 26, Internal Revenue Code.

Effective Date of 1968 Amendment

Amendment by Pub. L. 90–448 effective from and after a date, no more than 120 days following Aug. 1, 1968, as established by the Secretary of Housing and Urban Development, see section 808 of Pub. L. 90–448, set out as an Effective Date note under section 1716b of Title 12, Banks and Banking.

Effective Date of 1966 Amendment

Amendment by Pub. L. 89–769 applicable with respect to any major disaster occurring after Oct. 3, 1964, see section 14 of Pub. L. 89–769.

Ratification of Actions During Period of Expired Authority

Any action taken by Secretary of Veterans Affairs before Feb. 13, 1996, under provision of law amended by title I of Pub. L. 104–110 that was taken during period beginning on date on which authority of Secretary under such provision of law expired and ending on Feb. 13, 1996, considered to have same force and effect as if such amendment had been in effect at time of that action, see section 103 of Pub. L. 104–110, set out as a note under section 1710 of this title.

Property Management

Pub. L. 100–198, §9, Dec. 21, 1987, 101 Stat. 1320, as amended by Pub. L. 102–40, title IV, §402(d)(2), May 7, 1991, 105 Stat. 239; Pub. L. 102–83, §6(i), Aug. 6, 1991, 105 Stat. 408, provided for programs under which the Secretary could (1) convey to nonprofit entities or to States or political subdivisions of States real property or improvements to real property acquired by the Secretary as the result of a default of a loan made under this chapter to use the properties to provide shelter for homeless veterans and their families, or (2) convey such properties to entities for use in job training programs for property rehabilitation and later sale to homeless veterans. Authority to carry out the programs terminated on Oct. 1, 1990.

Housing Solar Energy and Weatherization Study; Report Not Later Than March 1, 1978

Pub. L. 95–202, title III, §311, Nov. 23, 1977, 91 Stat. 1449, directed Administrator of Veterans' Affairs, in consultation with Secretary of Energy and Secretary of Housing and Urban Development, to conduct a study to determine the most effective methods of using the programs carried out under, or amending provisions of, this chapter in order to aid and encourage present and prospective veteran homeowners to install solar heating and cooling in their homes and to apply residential energy conservation measures and that a report on such study be submitted to Congress not later than Mar. 1, 1978.

Waiver of Indebtedness; Report to Congress

Pub. L. 88–151, §2, Oct. 17, 1963, 77 Stat. 271, provided that: "The Administrator of Veterans' Affairs shall submit to the Committee on Labor and Public Welfare of the Senate and the Committee on Veterans' Affairs of the House of Representatives, not later than December 31 of each year, a written report concerning each case in which a waiver of indebtedness has been made under the authority of the amendment made by the first section of this Act [amending subsec. (a)(4) of this section]. Such report shall include, together with such other information as the Administrator deems appropriate, the name and address of each person with respect to which a waiver of indebtedness has been made and the total amount of such waiver."

Administration of Trusts by Federal National Mortgage Association

Provision for participation sales and administration of trusts by Federal National Mortgage Association not to be construed as a repeal or modification of the provisions of subsection (e) of this section respecting the authority of the Administrator of Veterans' Affairs, see section 6(a) of Pub. L. 89–429, set out as a note under section 1717 of Title 12, Banks and Banking.

§3721. Incontestability

Any evidence of guaranty or insurance issued by the Secretary shall be conclusive evidence of the eligibility of the loan for guaranty or insurance under the provisions of this chapter and of the amount of such guaranty or insurance. Nothing in this section shall preclude the Secretary from establishing, as against the original lender, defenses based on fraud or material misrepresentation. The Secretary shall not, by reason of anything contained in this section, be barred from establishing, by regulations in force at the date of such issuance or disbursement, whichever is the earlier, partial defenses to the amount payable on the guaranty or insurance.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1213, §1821; Pub. L. 101–237, title III, §313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered §3721, Pub. L. 102–83, §5(a), Aug. 6, 1991, 105 Stat. 406.)

Amendments

1991Pub. L. 102–83 renumbered section 1821 of this title as this section.

1989Pub. L. 101–237 substituted "Secretary" for "Administrator" wherever appearing.

§3722. Veterans Housing Benefit Program Fund

(a) There is hereby established in the Treasury of the United States a fund known as the Veterans Housing Benefit Program Fund (hereinafter in this section referred to as the "Fund").

(b) The Fund shall be available to the Secretary, without fiscal year limitation, for all housing loan operations under this chapter, other than administrative expenses, consistent with the Federal Credit Reform Act of 1990.

(c) There shall be deposited into the Fund the following, which shall constitute the assets of the Fund:

(1) Any amount appropriated to the Fund.

(2) Amounts paid into the Fund under section 3729 of this title or any other provision of law or regulation established by the Secretary imposing fees on persons or other entities participating in the housing loan programs under this chapter.

(3) All other amounts received by the Secretary on or after October 1, 1998, incident to housing loan operations under this chapter, including—

(A) collections of principal and interest on housing loans made by the Secretary under this chapter;

(B) proceeds from the sale, rental, use, or other disposition of property acquired under this chapter;

(C) proceeds from the sale of loans pursuant to sections 3720(h) and 3733(a)(3) of this title; and

(D) penalties collected pursuant to section 3710(g)(4)(B) of this title.


(d) Amounts deposited into the Fund under paragraphs (2) and (3) of subsection (c) shall be deposited in the appropriate financing or liquidating account of the Fund.

(e) For purposes of this section, the term "housing loan" shall not include a loan made pursuant to subchapter V of this chapter.

(Added Pub. L. 105–368, title VI, §602(a)(2), Nov. 11, 1998, 112 Stat. 3345; amended Pub. L. 107–14, §8(a)(16), June 5, 2001, 115 Stat. 35.)

References in Text

The Federal Credit Reform Act of 1990, referred to in subsec. (b), is title V of Pub. L. 93–344, as added by Pub. L. 101–508, title XIII, §13201(a), Nov. 5, 1990, 104 Stat. 1388–609, which is classified generally to subchapter III (§661 et seq.) of chapter 17A of Title 2, The Congress. For complete classification of this Act to the Code, see Short Title note set out under section 621 of Title 2 and Tables.

Prior Provisions

Prior to renumbering of sections 1801 to 1851 of this chapter as sections 3701 to 3751 by Pub. L. 102–83, §5(a), Aug. 6, 1991, 105 Stat. 406, section 1822 of this chapter, Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1214; Pub. L. 89–358, §5(c), Mar. 3, 1966, 88 Stat. 26; Pub. L. 89–623, §1, Oct. 4, 1966, 80 Stat. 873; Pub. L. 90–301, §2(b), May 7, 1968, 82 Stat. 113, which provided for bringing of an action in district court, by veteran or Attorney General, against one who knowingly participated in sale of property to a veteran for consideration in excess of reasonable value of property, was repealed by Pub. L. 93–569, §§7(a), 10, Dec. 31, 1974, 88 Stat. 1866, 1867, effective Dec. 31, 1974.

Amendments

2001—Subsec. (a). Pub. L. 107–14 substituted "hereinafter" for "hereafter".

Effective Date

Section effective Oct. 1, 1998, see section 602(f) of Pub. L. 105–368, set out as an Effective Date of 1998 Amendment note under section 2106 of this title.

Transfers of Amounts Into Veterans Housing Benefit Program Fund

Pub. L. 105–368, title VI, §602(b), Nov. 11, 1998, 112 Stat. 3346, provided that: "All amounts in the following funds are hereby transferred to the Veterans Housing Benefit Program Fund:

"(1) The Direct Loan Revolving Fund, as such fund was continued under section 3723 of title 38, United States Code (as such section was in effect on the day before the effective date of this title [Nov. 11, 1998]).

"(2) The Department of Veterans Affairs Loan Guaranty Revolving Fund, as established by section 3724 of such title (as such section was in effect on the day before the effective date of this title).

"(3) The Guaranty and Indemnity Fund, as established by section 3725 of such title (as such section was in effect on the day before the effective date of this title)."

[§§3723 to 3725. Repealed. Pub. L. 105–368, title VI, §602(a)(1), Nov. 11, 1998, 112 Stat. 3345]

Section 3723, Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1214, §1823; Pub. L. 86–73, §4, June 30, 1959, 73 Stat. 156; Pub. L. 86–665, §4, July 14, 1960, 74 Stat. 532; Pub. L. 87–84, §3, July 6, 1961, 75 Stat. 202; Pub. L. 88–274, Feb. 29, 1964, 78 Stat. 147; Pub. L. 88–560, title VII, §701(e)(2), Sept. 2, 1964, 78 Stat. 801; Pub. L. 94–324, §§6, 7(27), June 30, 1976, 90 Stat. 721, 722; Pub. L. 97–295, §4(68), Oct. 12, 1982, 96 Stat. 1310; Pub. L. 97–452, §2(e)(2), Jan. 12, 1983, 96 Stat. 2479; Pub. L. 99–576, title IV, §405, Oct. 28, 1986, 100 Stat. 3281; Pub. L. 101–237, title III, §313(b)(1), (8), (9), Dec. 18, 1989, 103 Stat. 2077, 2078; renumbered §3723 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406, related to direct loan revolving fund. See section 3722 of this title.

Section 3724, added Pub. L. 86–665, §7(a), July 14, 1960, 74 Stat. 532, §1824; amended Pub. L. 94–324, §7(28), June 30, 1976, 90 Stat. 722; Pub. L. 97–72, title III, §303(j), Nov. 3, 1981, 95 Stat. 1060; Pub. L. 98–369, div. B, title V, §2511(b), July 18, 1984, 98 Stat. 1117; Pub. L. 99–322, §2(a), May 23, 1986, 100 Stat. 494; Pub. L. 100–689, title III, §303, Nov. 18, 1988, 102 Stat. 4177; Pub. L. 101–237, title III, §§302(a)(2), (3)(A), (c), 313(b)(1), (2), Dec. 18, 1989, 103 Stat. 2070, 2071, 2077; renumbered §3724 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406, related to Loan Guaranty Revolving Fund. See section 3722 of this title.

Section 3725, Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1215, §1824; renumbered §1825, Pub. L. 86–665, §7(a), July 14, 1960, 74 Stat. 532; amended Pub. L. 94–324, §7(29), June 30, 1976, 90 Stat. 722; Pub. L. 101–237, title III, §302(a)(1), Dec. 18, 1989, 103 Stat. 2069; Pub. L. 102–54, §15(a)(2), June 13, 1991, 105 Stat. 289; renumbered §3725 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 102–547, §2(b)(2), Oct. 28, 1992, 106 Stat. 3634, related to Guaranty and Indemnity Fund. See section 3722 of this title.

Effective Date of Repeal

Repeal effective Oct. 1, 1998, see section 602(f) of Pub. L. 105–368, set out as an Effective Date of 1998 Amendment note under section 2106 of this title.

§3726. Withholding of payments, benefits, etc.

(a) No officer, employee, department, or agency of the United States shall set off against, or otherwise withhold from, any veteran or the surviving spouse of any veteran any payments (other than benefit payments under any law administered by the Department of Veterans Affairs) which such veteran or surviving spouse would otherwise be entitled to receive because of any liability to the Secretary allegedly arising out of any loan made to, assumed by, or guaranteed or insured on account of, such veteran or surviving spouse under this chapter, unless the Secretary provides such veteran or surviving spouse with notice by certified mail with return receipt requested of the authority of the Secretary to waive the payment of indebtedness under section 5302(b) of this title.

(b) If the Secretary does not waive the entire amount of the liability, the Secretary shall then determine whether the veteran or surviving spouse should be released from liability under section 3713(b) of this title.

(c) If the Secretary determines that the veteran or surviving spouse should not be released from liability, the Secretary shall notify the veteran or surviving spouse of that determination and provide a notice of the procedure for appealing that determination, unless the Secretary has previously made such determination and notified the veteran or surviving spouse of the procedure for appealing the determination.

(Added Pub. L. 89–358, §5(f)(1), Mar. 3, 1966, 80 Stat. 26, §1826; amended Pub. L. 94–324, §7(30), June 30, 1976, 90 Stat. 722; Pub. L. 97–66, title V, §504, Oct. 17, 1981, 95 Stat. 1033; Pub. L. 101–237, title III, §313(b)(1), (2), Dec. 18, 1989, 103 Stat. 2077; renumbered §3726, Pub. L. 102–83, §5(a), Aug. 6, 1991, 105 Stat. 406; Pub. L. 105–33, title VIII, §8033(a), Aug. 5, 1997, 111 Stat. 669.)

Amendments

1997Pub. L. 105–33 designated existing provisions as subsec. (a), substituted "unless the Secretary provides such veteran or surviving spouse with notice by certified mail with return receipt requested of the authority of the Secretary to waive the payment of indebtedness under section 5302(b) of this title." for "unless (1) there is first received the consent in writing of such veteran or surviving spouse, as the case may be, or (2) such liability and the amount thereof was determined by a court of competent jurisdiction in a proceeding to which such veteran or surviving spouse was a party.", and added subsecs. (b) and (c).

1991Pub. L. 102–83 renumbered section 1826 of this title as this section.

1989Pub. L. 101–237 substituted "Secretary" and "Department of Veterans Affairs" for "Administrator" and "Veterans' Administration", respectively.

1981Pub. L. 97–66 struck out subsec. (a) which provided that the Administrator could not, unless the Administrator had first obtained the consent in writing of an individual, set off against, or otherwise withhold from, such individual any benefits payable to such individual under any law administered by the Veterans' Administration because of liability allegedly arising out of any loan made to, assumed by, or guaranteed or insured on account of, such individual under this chapter, and struck out designation "(b)" before "No officer, employee, department, or agency of the United States".

1976—Subsec. (a). Pub. L. 94–324 substituted "the Administrator" for "he".

Subsec. (b). Pub. L. 94–324 substituted "surviving spouse" for "widow" wherever appearing.

Effective Date of 1997 Amendment

Pub. L. 105–33, title VIII, §8033(c), Aug. 5, 1997, 111 Stat. 669, provided that: "The amendments made by this section [amending this section and section 5302 of this title] shall apply with respect to any indebtedness to the United States arising pursuant to chapter 37 of title 38, United States Code, before, on, or after the date of enactment of this Act [Aug. 5, 1997]."

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–66 effective Oct. 17, 1980, see section 701(b)(3) of Pub. L. 97–66, set out as a note under section 1114 of this title.

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–324 effective June 30, 1976, see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.

§3727. Expenditures to correct or compensate for structural defects in mortgaged homes

(a) The Secretary is authorized, with respect to any property improved by a one- to four-family dwelling inspected during construction by the Department of Veterans Affairs or the Federal Housing Administration which the Secretary finds to have structural defects seriously affecting the livability of the property, to make expenditures for (1) correcting such defects, (2) paying the claims of the owner of the property arising from such defects, or (3) acquiring title to the property; except that such authority of the Secretary shall exist only (A) if the owner requests assistance under this section not later than four years (or such shorter time as the Secretary may prescribe) after the mortgage loan was made, guaranteed, or insured, and (B) if the property is encumbered by a mortgage which is made, guaranteed, or insured under this chapter after May 7, 1968.

(b) The Secretary shall by regulation prescribe the terms and conditions under which expenditures and payments may be made under the provisions of this section, and the Secretary's decisions regarding such expenditures or payments, and the terms and conditions under which the same are approved or disapproved, shall be final and conclusive, and shall not be subject to judicial review.

(c) The Secretary is authorized to make expenditures for the purposes of this section from the fund established pursuant to section 3722 of this title.

(Added Pub. L. 90–301, §5(a), May 7, 1968, 82 Stat. 116, §1827; amended Pub. L. 94–324, §7(31), June 30, 1976, 90 Stat. 722; Pub. L. 101–237, title III, §313(b)(1), (2), Dec. 18, 1989, 103 Stat. 2077; renumbered §3727 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 105–368, title VI, §602(e)(1)(C), title X, §1005(b)(11), Nov. 11, 1998, 112 Stat. 3346, 3365.)

Amendments

1998—Subsec. (a). Pub. L. 105–368, §1005(b)(11), substituted "May 7, 1968" for "the date of enactment of this section".

Subsec. (c). Pub. L. 105–368, §602(e)(1)(C), substituted "fund established pursuant to section 3722 of this title" for "funds established pursuant to sections 3723 and 3724 of this title, as applicable".

1991Pub. L. 102–83, §5(a), renumbered section 1827 of this title as this section.

Subsec. (c). Pub. L. 102–83, §5(c)(1), substituted "3723 and 3724" for "1823 and 1824".

1989Pub. L. 101–237 substituted "Secretary", "Secretary's", and "Department of Veterans Affairs" for "Administrator", "Administrator's", and "Veterans' Administration", respectively, wherever appearing.

1976—Subsec. (a). Pub. L. 94–324 substituted "the Administrator finds" for "he finds".

Subsec. (b). Pub. L. 94–324 substituted "the Administrator's" for "his".

Effective Date of 1998 Amendment

Amendment by section 602 of Pub. L. 105–368 effective Oct. 1, 1998, see section 602(f) of Pub. L. 105–368, set out as a note under section 2106 of this title.

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–324 effective June 30, 1976, see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.

§3728. Exemption from State anti-usury provisions

If, under any law of the United States, loans and mortgages insured under title I or title II of the National Housing Act are exempt from the application of the provisions of any State constitution or law (1) limiting the rate or amount of interest, discount points, or other charges which may be charged, taken, received, or reserved by lenders, (2) restricting the manner of calculating such interest (including prohibition of the charging of interest on interest), or (3) requiring a minimum amortization of principal, then loans guaranteed or insured under this chapter are also exempt from the application of such provisions.

(Added Pub. L. 96–128, title IV, §401(a), Nov. 28, 1979, 93 Stat. 986, §1828; amended Pub. L. 97–66, title V, §501(b), Oct. 17, 1981, 95 Stat. 1032; renumbered §3728, Pub. L. 102–83, §5(a), Aug. 6, 1991, 105 Stat. 406.)

References in Text

The National Housing Act, referred to in text, is act June 27, 1934, ch. 847, 48 Stat. 1246, as amended. Titles I and II of the Act are classified generally to subchapters I (§1702 et seq.) and II (§1707 et seq.), respectively, of chapter 13 of Title 12, Banks and Banking. For complete classification of this Act to the Code, see section 1701 of Title 12 and Tables.

Amendments

1991Pub. L. 102–83 renumbered section 1828 of this title as this section.

1981Pub. L. 97–66 designated as cl. (1) existing provisions relating to the limiting of rates or amounts of interest, discount points, or other charges which may be charged, taken, received, or reserved by lenders, and added cls. (2) and (3).

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–66 effective Oct. 17, 1981, see section 701(b)(1) of Pub. L. 97–66, set out as a note under section 1114 of this title.

Effective Date

Section effective Nov. 28, 1979, see section 601(b) of Pub. L. 96–128, set out as an Effective Date of 1979 Amendment note under section 1114 of this title.

§3729. Loan fee

(a) Requirement of Fee.—(1) Except as provided in subsection (c), a fee shall be collected from each person obtaining a housing loan guaranteed, insured, or made under this chapter, and each person assuming a loan to which section 3714 of this title applies. No such loan may be guaranteed, insured, made, or assumed until the fee payable under this section has been remitted to the Secretary.

(2) The fee may be included in the loan and paid from the proceeds thereof.

(b) Determination of Fee.—(1) The amount of the fee shall be determined from the loan fee table in paragraph (2). The fee is expressed as a percentage of the total amount of the loan guaranteed, insured, or made, or, in the case of a loan assumption, the unpaid principal balance of the loan on the date of the transfer of the property.

(2) The loan fee table referred to in paragraph (1) is as follows:

LOAN FEE TABLE
Type of loanActive duty

veteran

ReservistOther

obligor

(A)(i) Initial loan described in section 3710(a) to purchase or construct a dwelling with 0-down, or any other initial loan described in section 3710(a) other than with 5-down or 10-down (closed before January 1, 2004) 2.00 2.75 NA
(A)(ii) Initial loan described in section 3710(a) to purchase or construct a dwelling with 0-down, or any other initial loan described in section 3710(a) other than with 5-down or 10-down (closed on or after January 1, 2004, and before October 1, 2004) 2.20 2.40 NA
(A)(iii) Initial loan described in section 3710(a) to purchase or construct a dwelling with 0-down, or any other initial loan described in section 3710(a) other than with 5-down or 10-down (closed on or after October 1, 2004, and before September 30, 2028) 2.15 2.40 NA
(A)(iv) Initial loan described in section 3710(a) to purchase or construct a dwelling with 0-down, or any other initial loan described in section 3710(a) other than with 5-down or 10-down (closed on or after September 30, 2028) 1.40 1.65 NA
(B)(i) Subsequent loan described in section 3710(a) to purchase or construct a dwelling with 0-down, or any other subsequent loan described in section 3710(a) (closed before September 30, 2028) 3.30 3.30 NA
(B)(ii) Subsequent loan described in section 3710(a) to purchase or construct a dwelling with 0-down, or any other subsequent loan described in section 3710(a) (closed on or after September 30, 2028) 1.25 1.25 NA
(C)(i) Loan described in section 3710(a) to purchase or construct a dwelling with 5-down (closed before September 30, 2028) 1.50 1.75 NA
(C)(ii) Loan described in section 3710(a) to purchase or construct a dwelling with 5-down (closed on or after September 30, 2028) 0.75 1.00 NA
(D)(i) Initial loan described in section 3710(a) to purchase or construct a dwelling with 10-down (closed before September 30, 2028) 1.25 1.50 NA
(D)(ii) Initial loan described in section 3710(a) to purchase or construct a dwelling with 10-down (closed on or after September 30, 2028) 0.50 0.75 NA
(E) Interest rate reduction refinancing loan 0.50 0.50 NA
(F) Direct loan under section 3711 1.00 1.00 NA
(G) Manufactured home loan under section 3712 (other than an interest rate reduction refinancing loan) 1.00 1.00 NA
(H) Loan to Native American veteran under section 3762 (other than an interest rate reduction refinancing loan) 1.25 1.25 NA
(I) Loan assumption under section 3714 0.50 0.50 0.50
(J) Loan under section 3733(a) 2.25 2.25 2.25

(3) Any reference to a section in the "Type of loan" column in the loan fee table in paragraph (2) refers to a section of this title.

(4) For the purposes of paragraph (2):

(A) The term "active duty veteran" means any veteran eligible for the benefits of this chapter other than a Reservist.

(B) The term "Reservist" means a veteran described in section 3701(b)(5)(A) of this title who is eligible under section 3702(a)(2)(E) of this title.

(C) The term "other obligor" means a person who is not a veteran, as defined in section 101 of this title or other provision of this chapter.

(D) The term "initial loan" means a loan to a veteran guaranteed under section 3710 or made under section 3711 of this title if the veteran has never obtained a loan guaranteed under section 3710 or made under section 3711 of this title.

(E) The term "subsequent loan" means a loan to a veteran, other than an interest rate reduction refinancing loan, guaranteed under section 3710 or made under section 3711 of this title if the veteran has previously obtained a loan guaranteed under section 3710 or made under section 3711 of this title.

(F) The term "interest rate reduction refinancing loan" means a loan described in section 3710(a)(8), 3710(a)(9)(B)(i), 3710(a)(11), 3712(a)(1)(F), or 3762(h) of this title.

(G) The term "0-down" means a downpayment, if any, of less than 5 percent of the total purchase price or construction cost of the dwelling.

(H) The term "5-down" means a downpayment of at least 5 percent or more, but less than 10 percent, of the total purchase price or construction cost of the dwelling.

(I) The term "10-down" means a downpayment of 10 percent or more of the total purchase price or construction cost of the dwelling.


(c) Waiver of Fee.—(1) A fee may not be collected under this section from a veteran who is receiving compensation (or who, but for the receipt of retirement pay or active service pay, would be entitled to receive compensation) or from a surviving spouse of any veteran (including a person who died in the active military, naval, or air service) who died from a service-connected disability.

(2)(A) A veteran described in subparagraph (B) shall be treated as receiving compensation for purposes of this subsection as of the date of the rating described in such subparagraph without regard to whether an effective date of the award of compensation is established as of that date.

(B) A veteran described in this subparagraph is a veteran who is rated eligible to receive compensation—

(i) as the result of a pre-discharge disability examination and rating; or

(ii) based on a pre-discharge review of existing medical evidence (including service medical and treatment records) that results in the issuance of a memorandum rating.

(Added Pub. L. 97–253, title IV, §406(a)(1), Sept. 8, 1982, 96 Stat. 805, §1829; amended Pub. L. 98–369, div. B, title V, §2511(a), July 18, 1984, 98 Stat. 1117; Pub. L. 100–198, §§2, 10(c), Dec. 21, 1987, 101 Stat. 1315, 1323; Pub. L. 100–203, title VII, §7002, Dec. 22, 1987, 101 Stat. 1330–279; Pub. L. 100–322, title IV, §415(c)(6), May 20, 1988, 102 Stat. 551; Pub. L. 101–237, title III, §§303(a), 313(b)(1), Dec. 18, 1989, 103 Stat. 2071, 2077; Pub. L. 101–239, title V, §5001, Dec. 19, 1989, 103 Stat. 2136; Pub. L. 101–508, title VIII, §8032, Nov. 5, 1990, 104 Stat. 1388–348; Pub. L. 102–54, §15(a)(3), (4), June 13, 1991, 105 Stat. 289; renumbered §3729 and amended Pub. L. 102–83, §5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 102–547, §§2(b)(1), 5, Oct. 28, 1992, 106 Stat. 3633, 3636; Pub. L. 103–66, title XII, §12007, Aug. 10, 1993, 107 Stat. 414; Pub. L. 103–446, title IX, §904(c), Nov. 2, 1994, 108 Stat. 4677; Pub. L. 104–275, title II, §202(b), Oct. 9, 1996, 110 Stat. 3330; Pub. L. 105–33, title VIII, §§8012, 8032, Aug. 5, 1997, 111 Stat. 664, 669; Pub. L. 105–368, title VI, §§602(e)(1)(D), 603(b), Nov. 11, 1998, 112 Stat. 3346, 3348; Pub. L. 106–419, title IV, §402(b), Nov. 1, 2000, 114 Stat. 1861; Pub. L. 107–14, §8(b)(4), June 5, 2001, 115 Stat. 36; Pub. L. 107–103, title IV, §§405(c), 406, Dec. 27, 2001, 115 Stat. 994; Pub. L. 108–183, title IV, §405, Dec. 16, 2003, 117 Stat. 2665; Pub. L. 108–454, title IV, §406, Dec. 10, 2004, 118 Stat. 3617; Pub. L. 111–275, title II, §204, Oct. 13, 2010, 124 Stat. 2874; Pub. L. 112–26, §3(a), Aug. 3, 2011, 125 Stat. 269; Pub. L. 112–37, §15, Oct. 5, 2011, 125 Stat. 398; Pub. L. 112–56, title II, §265(a), Nov. 21, 2011, 125 Stat. 732; Pub. L. 112–154, title II, §210, title VII, §702(b), Aug. 6, 2012, 126 Stat. 1179, 1205; Pub. L. 113–146, title VII, §704, Aug. 7, 2014, 128 Stat. 1797; Pub. L. 115–46, title IV, §402, Aug. 12, 2017, 131 Stat. 969; Pub. L. 115–182, title V, §508, June 6, 2018, 132 Stat. 1480.)

Amendments

2018—Subsec. (b)(2). Pub. L. 115–182 substituted "2028" for "2027" wherever appearing in table.

2017—Subsec. (b)(2). Pub. L. 115–46 substituted "September 30, 2027" for "September 30, 2024" wherever appearing in table.

2014—Subsec. (b)(2). Pub. L. 113–146 substituted "September 30, 2024" for "October 1, 2017" wherever appearing in table.

2012—Subsec. (b)(2). Pub. L. 112–154, §702(b), substituted "October 1, 2017" for "October 1, 2016" wherever appearing in table.

Subsec. (c)(2). Pub. L. 112–154, §210, amended par. (2) generally. Prior to amendment, par. (2) read as follows: "A veteran who is rated eligible to receive compensation as a result of a pre-discharge disability examination and rating shall be treated as receiving compensation for purposes of this subsection as of the date on which the veteran is rated eligible to receive compensation as a result of the pre-discharge disability examination and rating without regard to whether an effective date of the award of compensation is established as of that date."

2011—Subsec. (b)(2). Pub. L. 112–37 substituted "November 18, 2011" for "October 1, 2011" wherever appearing in table.

Subsec. (b)(2)(A)(iii), (iv). Pub. L. 112–56, §265(a)(1), substituted "October 1, 2016" for "November 18, 2011".

Subsec. (b)(2)(B)(i). Pub. L. 112–56, §265(a)(2)(A), substituted "October 1, 2016" for "November 18, 2011".

Pub. L. 112–26, §3(a)(1), substituted "October 1, 2011" for "January 1, 2004" and substituted "3.30" for "3.00" in two places.

Subsec. (b)(2)(B)(ii). Pub. L. 112–56, §265(a)(2)(B)–(D), redesignated cl. (iv) as (ii), substituted "October 1, 2016" for "October 1, 2013", and struck out former cl. (ii) which listed loan fees of 2.80 percent in the first two table columns for a subsequent loan described in section 3710(a) to purchase or construct a dwelling with 0-down, or any other subsequent loan described in section 3710(a) (closed on or after Nov. 18, 2011, and before Oct. 1, 2012).

Pub. L. 112–26, §3(a)(2), substituted "October 1, 2011, and before October 1, 2012" for "January 1, 2004, and before October 1, 2011" and substituted "2.80" for "3.30" in two places.

Subsec. (b)(2)(B)(iii). Pub. L. 112–56, §265(a)(2)(B), struck out cl. (iii) which listed loan fees of 2.15 percent in the first two table columns for a subsequent loan described in section 3710(a) to purchase or construct a dwelling with 0-down, or any other subsequent loan described in section 3710(a) (closed on or after Oct. 1, 2012, and before Oct. 1, 2013).

Pub. L. 112–26, §3(a)(3), substituted "October 1, 2012" for "October 1, 2011".

Subsec. (b)(2)(B)(iv). Pub. L. 112–56, §265(a)(2)(C), redesignated cl. (iv) as (ii).

Subsec. (b)(2)(C), (D). Pub. L. 112–56, §265(a)(3), (4), substituted "October 1, 2016" for "November 18, 2011" wherever appearing.

2010—Subsec. (c)(1). Pub. L. 111–275 inserted "or active service pay" after "retirement pay".

2004—Subsec. (c). Pub. L. 108–454 designated existing provisions as par. (1) and added par. (2).

2003—Subsec. (b)(2). Pub. L. 108–183 amended par. (2) generally, revising table by adding cls. (iii) and (iv) of subpars. (A) and (B) and changing dates in subpars. (A) and (B).

2001Pub. L. 107–14 made technical amendment to Pub. L. 106–419. See 2000 Amendment note below.

Subsec. (b)(2). Pub. L. 107–103, §405(c), substituted "October 1, 2011" for "October 1, 2008" wherever appearing in table.

Subsec. (b)(4)(B). Pub. L. 107–103, §406, inserted "who is eligible under section 3702(a)(2)(E) of this title" before period.

2000Pub. L. 106–419, as amended by Pub. L. 107–14, amended text generally, substituting present provisions for provisions which established loan fee, set fee as 1.25 percent of total loan amount, with exceptions, provided that amount of fee may be included in loan amount and paid from proceeds thereof, provided for increased loan fee percentage for loans closed during specified period, provided for fees on subsequent loans and assumed loans, and provided that fees may not be collected from veterans receiving compensation or from surviving spouses of any veterans who died from service-connected disability.

1998—Subsec. (a)(1). Pub. L. 105–368, §602(e)(1)(D)(ii), substituted "(c)" for "(c)(1)".

Subsec. (a)(4). Pub. L. 105–368, §603(b), designated existing provisions as subpar. (A), substituted "during the period specified in subparagraph (B)" for "after September 30, 1993, and before October 1, 2002,", and added subpar. (B).

Subsec. (c). Pub. L. 105–368, §603(e)(1)(D)(i), struck out "(1)" before "A fee may not" and struck out pars. (2) and (3) which read as follows:

"(2) There shall be credited to the Guaranty and Indemnity Fund (in addition to the amount required to be credited to such Fund under clause (A) or (B) of paragraph (2) of section 3725(c) of this title or paragraph (3) of that section), on behalf of a veteran or surviving spouse described in paragraph (1) of this subsection, an amount equal to the fee that, except for paragraph (1) of this subsection, would be collected from such veteran or surviving spouse.

"(3) Credits to the Guaranty and Indemnity Fund under paragraph (2) of this subsection with respect to loans guaranteed, insured, or made under this chapter that are closed during fiscal year 1990 shall be made in October 1990."

1997—Subsec. (a)(2)(A). Pub. L. 105–33, §8032(1)(A), struck out "or 3733(a)" after "section 3711".

Subsec. (a)(2)(F). Pub. L. 105–33, §8032(1)(B)–(D), added subpar. (F).

Subsec. (a)(4). Pub. L. 105–33, §§8012(1), 8032(2), substituted "October 1, 2002" for "October 1, 1998" and "(E), or (F)" for "or (E)".

Subsec. (a)(5)(C). Pub. L. 105–33, §8012(2), substituted "October 1, 2002" for "October 1, 1998".

1996—Subsec. (a)(2)(E). Pub. L. 104–275 substituted "3712(a)(1)(F), or 3762(h)" for "or 3712(a)(1)(F)".

1994—Subsec. (a)(2)(E). Pub. L. 103–446 inserted "3710(a)(11)," after "3710(a)(9)(B)(i),".

1993—Subsec. (a)(2). Pub. L. 103–66, §12007(c), substituted "paragraphs (4) and (5)" for "paragraph (6)" in introductory provisions.

Subsecs. (a)(4) to (6). Pub. L. 103–66, §12007(a), (b), added pars. (4) and (5) and struck out par. (6) which read as follows: "With respect to each loan closed during the period beginning on November 1, 1990, and ending on September 30, 1991, each amount specified in paragraph (2) of this subsection shall be increased by 0.625 percent of the total loan amount."

1992—Subsec. (a)(2)(A). Pub. L. 102–547, §5(1), inserted "(other than section 3712(a)(1)(F))" after "section 3712".

Subsec. (a)(2)(D). Pub. L. 102–547, §2(b)(1), added subpar. (D).

Subsec. (a)(2)(E). Pub. L. 102–547, §5(2), added subpar. (E).

1991Pub. L. 102–83, §5(a), renumbered section 1829 of this title as this section.

Subsec. (a)(1). Pub. L. 102–83, §5(c)(1), substituted "3733(a)" for "1833(a)".

Subsec. (a)(2). Pub. L. 102–83, §5(c)(1), substituted "3711 or 3733(a)" for "1811 or 1833(a)" and "3712" for "1812" in subpar. (A) and "3712(a)" for "1812(a)" in subpars. (B) and (C).

Subsec. (a)(3) to (5). Pub. L. 102–54, §15(a)(3), redesignated par. (5) as (3) and struck out former pars. (3) and (4) which read as follows:

"(3) Except as provided in paragraph (4) of this subsection, there shall be credited to the Guaranty and Indemnity Fund (in addition to the amount required to be credited to such Fund under section 1825(c)(2)(A) or (B) of this title), on behalf of a veteran who has made a downpayment described in paragraph (2)(C) of this subsection, an amount equal to 0.25 percent of the total loan amount for the fiscal year in which the loan is closed and for the following fiscal year.

"(4) Credits to the Guaranty and Indemnity Fund under paragraph (3) of this subsection with respect to loans guaranteed or insured under this chapter that are closed during fiscal year 1990 shall be made in October 1990 and October 1991."

Subsec. (b). Pub. L. 102–83, §5(c)(1), substituted "3714" for "1814".

Subsec. (c)(2). Pub. L. 102–83, §5(c)(1), substituted "3725(c)" for "1825(c)".

Pub. L. 102–54, §15(a)(4), substituted "clause (A) or (B) of paragraph (2) of section 1825(c) of this title or paragraph (3) of that section" for "section 1825(c)(2)(A) or (B) of this title and subsection (a)(3) of this section".

1990—Subsec. (a)(2). Pub. L. 101–508, §8032(1), substituted "Except as provided in paragraph (6) of this subsection, the amount" for "The amount".

Subsec. (a)(6). Pub. L. 101–508, §8032(2), added par. (6).

1989Pub. L. 101–237, §303(a), amended section generally. Prior to amendment, section read as follows:

"(a) Except as provided in subsection (b) of this section, a fee shall be collected from each veteran obtaining a housing loan guaranteed, made, or insured under this chapter, and from each person obtaining a loan from the Secretary to finance the purchase of real property from the Secretary, and no such loan may be guaranteed, made, or insured under this chapter until the fee payable with respect to such loan has been remitted to the Secretary. The amount of the fee shall be one percent of the total loan amount. The amount of the fee may be included in the loan and paid from the proceeds thereof.

"(b) A fee may not be collected under this section from a veteran who is receiving compensation (or who but for the receipt of retirement pay would be entitled to receive compensation) or from a surviving spouse of any veteran (including a person who died in the active military, naval, or air service) who died from a service-connected disability.

"(c) A fee may not be collected under this section with respect to any loan closed after September 30, 1990.

"(d) Except as provided in subsection (b) of this section, a fee shall be collected from a person assuming a loan to which section 1814 of this chapter applies. The amount of the fee shall be equal to one-half of one percent of the balance of such loan on the date of the transfer of the property."

Subsec. (a). Pub. L. 101–237, §313(b)(1), substituted "Secretary" for "Administrator" wherever appearing.

Subsec. (c). Pub. L. 101–239 substituted "September 30, 1990" for "September 30, 1989".

1988—Subsec. (d). Pub. L. 100–322 substituted "section 1814" for "section 1817A".

1987—Subsec. (b). Pub. L. 100–198, §2(b), substituted "of any veteran (including a person who died in the active military, naval, or air service) who died from a service-connected disability" for "described in section 1801(b)(2) of this title".

Subsec. (c). Pub. L. 100–198, §2(a), and Pub. L. 100–203, amended subsec. identically, substituting "September 30, 1989" for "September 30, 1987".

Subsec. (d). Pub. L. 100–198, §10(c), added subsec. (d).

1984—Subsec. (a). Pub. L. 98–369, §2511(a)(1), inserted "and from each person obtaining a loan from the Administrator to finance the purchase of real property from the Administrator," after "under this chapter,", struck out "one-half of" before "one percent of the total loan amount", and struck out "to the veteran" after "in the loan".

Subsecs. (c), (d). Pub. L. 98–367, §2511(a)(2), (3), redesignated subsec. (d) as (c) and substituted "September 30, 1987" for "September 30, 1985". Former subsec. (c), which related to deposit of fees collected under this section into Treasury as miscellaneous receipts, was struck out.

Effective Date of 2011 Amendment

Pub. L. 112–56, title II, §265(b), Nov. 21, 2011, 125 Stat. 733, provided that: "The amendments made by subsection (a) [amending this section] shall take effect on the later of—

"(1) November 18, 2011; or

"(2) the date of the enactment of this Act [Nov. 21, 2011]."

Pub. L. 112–26, §3(b), Aug. 3, 2011, 125 Stat. 269, provided that: "The amendments made by subsection (a) [amending this section] shall take effect on the later of October 1, 2011, or the date of the enactment of this Act [Aug. 3, 2011]."

Effective Date of 2003 Amendment

Pub. L. 108–183, title IV, §405, Dec. 16, 2003, 117 Stat. 2665, provided that the amendment made by section 405 is effective Jan. 1, 2004.

Effective Date of 2001 Amendment

Pub. L. 107–14, §8(b), June 5, 2001, 115 Stat. 36, provided that the amendment made by section 8(b) is effective Nov. 1, 2000, and as if included in the Veterans Benefits and Health Care Improvement Act of 2000, Pub. L. 106–419, as enacted.

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–368 effective Oct. 1, 1998, see section 602(f) of Pub. L. 105–368, set out as a note under section 2106 of this title.

Effective Date of 1989 Amendment

Pub. L. 101–237, title III, §303(b), Dec. 18, 1989, 103 Stat. 2073, provided that: "The amendments made by this section [amending this section] shall take effect on January 1, 1990."

Effective Date of 1984 Amendment

Pub. L. 98–369, div. B, title V, §2511(c), July 18, 1984, 98 Stat. 1117, provided that:

"(1) The amendments made by subsection (a)(1) [amending this section] shall apply with respect to loans closed after the end of the 30-day period beginning on the date of the enactment of this Act [July 18, 1984].

"(2) The amendments made by subsections (a)(2) and (b) [amending this section and section 1824 [now 3724] of this title] shall apply with respect to loans closed on or after the date of the enactment of this Act [July 18, 1984].

"(3) The amendment made by subsection (a)(3) [amending this section] shall take effect on the date of the enactment of this Act [July 18, 1984]."

Effective Date

Pub. L. 97–253, title IV, §406(b), Sept. 8, 1982, 96 Stat. 805, as amended by Pub. L. 102–83, §5(c)(2), Aug. 6, 1991, 105 Stat. 406, provided that: "Section 1829 [now 3729] of title 38, United States Code, as added by subsection (a), shall apply only to loans closed after September 30, 1982."

Temporary Increase in Certain Housing Loan Fees

Pub. L. 109–233, title I, §101(f), June 15, 2006, 120 Stat. 399, provided that: "For a subsequent loan described in subsection (a) of section 3710 of title 38, United States Code, to purchase or construct a dwelling with 0-down or any other subsequent loan described in that subsection, other than a loan with 5-down or 10-down, that is closed during fiscal year 2007, the Secretary of Veterans Affairs shall apply section 3729(b)(2) of such title by substituting '3.35' for '3.30'."

Fee for Loan Assumption

Pub. L. 107–330, title III, §307, Dec. 6, 2002, 116 Stat. 2827, provided that:

"(a) In General.—For the period described in subsection (b), the Secretary of Veterans Affairs shall apply section 3729(b)(2)(I) of title 38, United States Code, by substituting '1.00' for '0.50' each place it appears.

"(b) Period Described.—The period referred to in subsection (a) is the period that begins on the date that is 7 days after the date of the enactment of this Act [Dec. 6, 2002] and ends on September 30, 2003."

Ratification of Actions by Secretary of Veterans Affairs and by Secretary of the Treasury Between Oct. 1, 1990, and June 13, 1991

Pub. L. 102–54, §15(b), June 13, 1991, 105 Stat. 289, as amended by Pub. L. 102–83, §5(c)(2), Aug. 6, 1991, 105 Stat. 406, provided that:

"(1) Any action of the Secretary of Veterans Affairs or the Secretary of the Treasury—

"(A) that was taken during the period beginning on October 1, 1990, and ending on the date of the enactment of this Act [June 13, 1991]; and

"(B) that would have been an action carried out under section 3725(c)(3) [formerly 1825(c)(3)] of title 38, United States Code, if the amendment made by paragraph (2) of subsection (a) of this section had been made before October 1, 1990,

is hereby ratified.

"(2) Any failure to act by the Secretary of Veterans Affairs or the Secretary of the Treasury during such period under section 3729(a)(3) [formerly 1829(a)(3)] of such title is hereby ratified."

Ratification of Actions of Secretary of Veterans Affairs During Transition Periods

For provisions ratifying any actions of the Secretary of Veterans Affairs in carrying out this section during the period beginning Dec. 1, 1989, and ending Dec. 18, 1989, see section 604 of Pub. L. 101–237, set out as a note under section 1720B of this title.

For provisions ratifying any actions of the Secretary of Veterans Affairs in carrying out this section during the period beginning Oct. 1, 1989, and ending Oct. 6, 1989, see section 3(b) of Pub. L. 101–110, set out as a note under section 1720B of this title.

Rule for Construction of Duplicate Provisions

For rule relating to construction of provisions of Pub. L. 100–203 and Pub. L. 100–198 making duplicate amendments to this section, see section 7004(b) of Pub. L. 100–203, set out as a note under section 3733 of this title.

Extension of Time for Collection of Fees

Pub. L. 101–237, title III, §303(c), Dec. 18, 1989, 103 Stat. 2073, directed Secretary of Veterans Affairs to collect fees under this section through Dec. 31, 1989.

Pub. L. 101–110, §2, Oct. 6, 1989, 103 Stat. 682, authorized collection of fees under this section with respect to loans closed before Dec. 1, 1989.

Pub. L. 100–136, §1(b), Oct. 16, 1987, 101 Stat. 813, authorized collection of fees under this section with respect to loans closed through Nov. 15, 1987.

Home Loan Origination Fee

Pub. L. 99–576, title IV, §409, Oct. 28, 1986, 100 Stat. 3283, provided that: "It is the sense of the Congress that the Veterans' Administration loan origination fee should not be increased above its present level of one percent of the amount of the loan guaranteed."

§3730. Use of attorneys in court

(a) The Secretary shall authorize attorneys employed by the Department of Veterans Affairs to exercise the right of the United States to bring suit in court to foreclose a loan made or acquired by the Secretary under this chapter and to recover possession of any property acquired by the Secretary under this chapter. The Secretary may acquire the services of attorneys, other than those who are employees of the Department of Veterans Affairs, to exercise that right. The activities of attorneys in bringing suit under this section shall be subject to the direction and supervision of the Attorney General and to such terms and conditions as the Attorney General may prescribe.

(b) Nothing in this section derogates from the authority of the Attorney General under sections 516 and 519 of title 28 to direct and supervise all litigation to which the United States or an agency or officer of the United States is a party.

(Added Pub. L. 98–369, div. B, title V, §2512(b)(1), July 18, 1984, 98 Stat. 1120, §1830; amended Pub. L. 99–576, title IV, §406, Oct. 28, 1986, 100 Stat. 3282; Pub. L. 101–237, title III, §313(b)(1), (2), Dec. 18, 1989, 103 Stat. 2077; renumbered §3730, Pub. L. 102–83, §5(a), Aug. 6, 1991, 105 Stat. 406; Pub. L. 105–368, title X, §1005(b)(12), Nov. 11, 1998,