§3725. Guaranty and Indemnity Fund

(a) There is hereby established in the Treasury of the United States a revolving fund known as the Guaranty and Indemnity Fund.

(b) The Guaranty and Indemnity Fund shall be available to the Secretary for all operations carried out with respect to housing loans guaranteed or insured under this chapter that are closed after December 31, 1989, except for operations with respect to loans for any purpose specified in section 3712 of this title, for loans guaranteed under section 3711(g) of this title, and for administrative expenses. For purposes of this subsection, the term "administrative expenses" shall not include expenses incurred by the Secretary for appraisals performed after December 31, 1989, on a contractual basis in connection with the liquidation of housing loans guaranteed, insured, or made under this chapter.

(c)(1) All fees collected under section 3729 of this title for loans with respect to which the Guaranty and Indemnity Fund is available shall be credited to such Fund.

(2) Except as provided in paragraph (3) of this subsection, there shall also be credited to the Guaranty and Indemnity Fund-

(A) for each loan (other than loans described in section 3729(a)(2)(D) of this title) closed during fiscal year 1990 with respect to which the Guaranty and Indemnity Fund is available, an amount equal to 0.375 percent of the original amount of such loan for each of the fiscal years 1991 and 1992;

(B) for each loan (other than loans described in section 3729(a)(2)(D) of this title) closed after fiscal year 1990 with respect to which the Guaranty and Indemnity Fund is available, an amount equal to 0.25 percent of the original amount of such loan for each of the three fiscal years beginning with the fiscal year in which such loan is closed;

(C) all collections of principal and interest and the proceeds from the use or sale of property which secured a loan with respect to which the Guaranty and Indemnity Fund is available;

(D) amounts required to be credited under subsections (a)(3) ¹ and (c)(2), including amounts credited pursuant to subsections (a)(4) ¹ and (c)(3), of section 3729 of this title;

(E) fees collected under section 3729(b) of this title with respect to guaranteed or insured loans that are closed after December 31, 1989, and subsequently assumed; and

(F) all income from the investments described in subsection (d) of this section.

(3) In the case of a loan described in clause (C) of section 3729(a)(2) of this title, there shall be credited to the Guaranty and Indemnity Fund, in lieu of any amount that would otherwise be credited for such a loan under subparagraph (A) or (B) of paragraph (2) of this subsection-

(A) for each loan closed during fiscal year 1990, an amount equal to 0.25 percent of the original amount of the loan for each of the fiscal years 1991 and 1992;

(B) for each loan closed after fiscal year 1990, an amount equal to 0.25 percent of the original amount of the loan for the fiscal year in which the loan is closed and for the following fiscal year.

(d)(1) The Secretary of the Treasury shall invest the portion of the Guaranty and Indemnity Fund that is not required to meet current payments made from such Fund, as determined by the Secretary of Veterans Affairs, in obligations of the United States or in obligations guaranteed as to principal and interest by the United States.

(2) In making investments under paragraph (1) of this subsection, the Secretary of the Treasury shall select obligations having maturities suitable to the needs of the Guaranty and Indemnity Fund, as determined by the Secretary of Veterans Affairs, and bearing interest at suitable rates, as determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities.

(e)(1) Notwithstanding subsection (b) of this section, the Guaranty and Indemnity Fund shall be available to the Secretary, to such extent as is, or in such amounts as are, provided for in appropriation Acts and subject to paragraph (2) of this subsection, for-

(A) contracts for the performance of supplementary services described in paragraph (2) of section 3724(e) of this title for which the Secretary is otherwise authorized to contract; and

(B) the acquisition of supplementary equipment described in such paragraph,

(not including services or equipment for which the Guaranty and Indemnity Fund is available under subsection (b) of this section), as the Secretary determines would assist in ensuring the long-term stability and solvency of the Guaranty and Indemnity Fund.

(2) The Secretary may not in any fiscal year obligate more than a total of $25,000,000 for services or equipment under this subsection and section 3724(e) of this title.

( 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 .)

References in Text

Subsection (a)(3) and (4) of section 3729 of this title, referred to in subsec. (c)(2)(D), was repealed by Pub. L. 102–54, §15(a)(3), June 13, 1991, 105 Stat. 289 , and former subsec. (a)(5) of section 3729 was redesignated as subsec. (a)(3). Subsequently, Pub. L. 103–66, title XII, §12007, Aug. 10, 1993, 107 Stat. 414 , added a new subsec. (a)(4).

Amendments

1992-Subsec. (c)(2)(A), (B). Pub. L. 102–547 inserted "(other than loans described in section 3729(a)(2)(D) of this title)" after "for each loan".

1991-Pub. L. 102–83, §5(a), renumbered section 1825 of this title as this section.

Subsec. (b). Pub. L. 102–83, §5(c)(1), substituted "3712" for "1812" and "3711(g)" for "1811(g)".

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

Subsec. (c)(2). Pub. L. 102–83, §5(c)(1), substituted "3729" for "1829" in subpar. (D) and "3729(b)" for "1829(b)" in subpar. (E).

Pub. L. 102–54, §15(a)(2)(A), substituted "Except as provided in paragraph (3) of this subsection, there" for "There".

Subsec. (c)(3). Pub. L. 102–83, §5(c)(1), substituted "3729(a)(2)" for "1829(a)(2)".

Pub. L. 102–54, §15(a)(2)(B), added par. (3).

Subsec. (e)(1)(A), (2). Pub. L. 102–83, §5(c)(1), substituted "3724(e)" for "1824(e)".

1989-Pub. L. 101–237 substituted "Guaranty and Indemnity Fund" for "Waiver of discharge requirements for hospitalized persons" in section catchline and amended text generally. Prior to amendment, text read as follows: "The benefits of this chapter may be afforded to any person who is hospitalized pending final discharge from active duty, if said person is qualified therefor in every respect except for discharge."

1976-Pub. L. 94–324 substituted "said person" for "he".

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.

Ratification of Actions by Secretary of Veterans Affairs and by Secretary of the Treasury Between Oct. 1, 1990, and June 13, 1991

Section 15(b) of Pub. L. 102–54, 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."

Section Referred to in Other Sections

This section is referred to in sections 3724, 3729, 3734 of this title.

¹ See References in Text note below.