US (United States) Code. Title 38. Part III. Chapter 37: Housing and small business loans

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # Veterans benefits

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-CITE-

38 USC CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

-HEAD-

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

-MISC1-

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.

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 Repealed.]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 - NATIVE AMERICAN VETERAN HOUSING LOAN PILOT PROGRAM

3761. Pilot program.

3762. Direct housing loans to Native American veterans.

3763. Native American Veteran Housing Loan Program Account.

3764. Definitions.

[SUBCHAPTER VI - TRANSFERRED]

[3771 to 3775. Repealed or renumbered.]

AMENDMENTS

2002 - Pub. L. 107-330, title III, Sec. 303(b), Dec. 6, 2002, 116

Stat. 2826, added item 3707A.

2001 - Pub. L. 107-95, Sec. 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".

1998 - Pub. L. 105-368, title VI, Secs. 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.

1996 - Pub. L. 104-110, title II, Sec. 201(a)(2), Feb. 13, 1996,

110 Stat. 770, added item 3736.

Pub. L. 104-106, div. B, title XXVIII, Sec. 2822(b)(2), Feb. 10,

1996, 110 Stat. 557, added item 3708.

1992 - Pub. L. 102-547, Secs. 3(a)(2), 8(c), Oct. 28, 1992, 106

Stat. 3635, 3640, added item 3707, item for subchapter V, and items

3761 to 3764.

1991 - Pub. L. 102-83, Sec. 5(b)(1), Aug. 6, 1991, 105 Stat. 406,

renumbered items 1801 to 1851 as 3701 to 3751, respectively.

Pub. L. 102-54, Sec. 9(b), June 13, 1991, 105 Stat. 273, added

item 1835.

1989 - Pub. L. 101-237, title III, Secs. 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.

1988 - Pub. L. 100-322, title IV, Sec. 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.

1987 - Pub. L. 100-198, Sec. 10(a)(3), Dec. 21, 1987, 101 Stat.

1323, added item 1817A.

1986 - Pub. L. 99-576, title IV, Secs. 407(b), 408(b), Oct. 28,

1986, 100 Stat. 3283, added items 1831 and 1832.

1984 - Pub. L. 98-369, div. B, title V, Sec. 2512(b)(2), July 18,

1984, 98 Stat. 1120, added item 1830.

1982 - Pub. L. 97-306, title IV, Sec. 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, Sec. 406(a)(2), Sept. 8, 1982, 96 Stat.

805, added item 1829.

1981 - Pub. L. 97-72, title III, Sec. 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.

1979 - Pub. L. 96-128, title IV, Sec. 401(b), Nov. 28, 1979, 93

Stat. 987, added item 1828.

1978 - Pub. L. 95-476, title I, Sec. 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.

1976 - Pub. L. 94-324, Sec. 2(b), June 30, 1976, 90 Stat. 720,

added item 1807.

1974 - Pub. L. 93-569, Secs. 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.

1970 - Pub. L. 91-506, Sec. 7, Oct. 23, 1970, 84 Stat. 1114,

added item 1819.

1968 - Pub. L. 90-301, Sec. 5(b), May 7, 1968, 82 Stat. 116,

added item 1827.

1966 - Pub. L. 89-358, Sec. 5(b), (f)(2), Mar. 3, 1966, 80 Stat.

26, 27, added items 1818 and 1826.

1960 - Pub. L. 86-665, Secs. 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.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 101, 103, 109, 511, 1521,

2032, 2041, 2104, 5302, 5303A, 5313B, 5701, 5904 of this title;

title 12 sections 1464, 1701x, 1709, 1709-1a, 1715y, 1715z-13a,

1715z-13b, 1717, 1721, 1731a, 1735b, 1735g, 2803; title 26 section

6334; title 42 section 1472.

-End-

-CITE-

38 USC SUBCHAPTER I - GENERAL 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER I - GENERAL

-HEAD-

SUBCHAPTER I - GENERAL

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in section 113 of this title;

title 2 section 905.

-End-

-CITE-

38 USC Sec. 3701 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER I - GENERAL

-HEAD-

Sec. 3701. Definitions

-STATUTE-

(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.

(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.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1203, Sec. 1801; Pub. L.

91-584, Sec. 5(a), Dec. 24, 1970, 84 Stat. 1576; Pub. L. 94-324,

Sec. 7(1), (2), June 30, 1976, 90 Stat. 721; Pub. L. 97-72, title

III, Sec. 303(a), Nov. 3, 1981, 95 Stat. 1059; Pub. L. 97-295, Sec.

4(62), Oct. 12, 1982, 96 Stat. 1309; Pub. L. 100-322, title IV,

Sec. 415(c)(1), May 20, 1988, 102 Stat. 551; Pub. L. 101-237, title

III, Sec. 313(a), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec.

3701 and amended Pub. L. 102-83, Sec. 5(a), (c)(1), Aug. 6, 1991,

105 Stat. 406; Pub. L. 102-547, Sec. 2(a)(1), Oct. 28, 1992, 106

Stat. 3633; Pub. L. 103-446, title IX, Sec. 901, Nov. 2, 1994, 108

Stat. 4675; Pub. L. 104-106, div. A, title XV, Sec. 1501(e)(2)(B),

Feb. 10, 1996, 110 Stat. 501.)

-REFTEXT-

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 (Sec. 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.

-MISC1-

AMENDMENTS

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, Sec. 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, Sec. 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).

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1801 of this

title as this section.

Subsec. (a). Pub. L. 102-83, Sec. 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, Sec. 303(a)(2), added subsec.

(a). Former subsec. (a) redesignated (b).

Subsec. (b). Pub. L. 97-72, Sec. 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, Sec. 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, Sec. 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, Sec. 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 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

Section 9 of Pub. L. 94-324 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."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3702, 3708, 3729, 5302 of

this title.

-End-

-CITE-

38 USC Sec. 3702 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER I - GENERAL

-HEAD-

Sec. 3702. Basic entitlement

-STATUTE-

(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) For the period beginning on October 28, 1992, and ending on

September 30, 2009, each veteran described in section 3701(b)(5)

of this title.

(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.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1203, Sec. 1802; Pub. L.

86-73, Sec. 1, June 30, 1959, 73 Stat. 156; Pub. L. 87-84, Sec.

1(b), July 6, 1961, 75 Stat. 201; Pub. L. 90-19, Sec. 25(1), May

25, 1967, 81 Stat. 28; Pub. L. 90-77, title IV, Sec. 403(a), Aug.

31, 1967, 81 Stat. 190; Pub. L. 91-506, Sec. 2(a), Oct. 23, 1970,

84 Stat. 1108; Pub. L. 91-584, Sec. 5(b), Dec. 24, 1970, 84 Stat.

1576; Pub. L. 93-569, Sec. 2(a), (b), Dec. 31, 1974, 88 Stat. 1863;

Pub. L. 94-324, Sec. 7(3)-(5), June 30, 1976, 90 Stat. 721; Pub. L.

95-476, title I, Sec. 102, Oct. 18, 1978, 92 Stat. 1497; Pub. L.

97-72, title III, Sec. 303(b), Nov. 3, 1981, 95 Stat. 1060; Pub. L.

97-295, Sec. 4(61), Oct. 12, 1982, 96 Stat. 1309; Pub. L. 98-223,

title II, Sec. 204, Mar. 2, 1984, 98 Stat. 42; Pub. L. 100-322,

title IV, Sec. 415(a)(1), (2), May 20, 1988, 102 Stat. 549, 550;

Pub. L. 101-237, title III, Secs. 310, 313(b)(1), Dec. 18, 1989,

103 Stat. 2075, 2077; Pub. L. 102-25, title III, Sec. 341, Apr. 6,

1991, 105 Stat. 92; Pub. L. 102-40, title IV, Sec. 402(d)(1), May

7, 1991, 105 Stat. 239; renumbered Sec. 3702 and amended Pub. L.

102-83, Sec. 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L.

102-547, Sec. 2(a)(2), Oct. 28, 1992, 106 Stat. 3633; Pub. L.

103-446, title IX, Sec. 902, title XII, Sec. 1201(f)(4), Nov. 2,

1994, 108 Stat. 4676, 4687; Pub. L. 105-368, title VI, Sec. 603(a),

Nov. 11, 1998, 112 Stat. 3348; Pub. L. 106-117, title VII, Sec.

711, Nov. 30, 1999, 113 Stat. 1584; Pub. L. 107-103, title IV, Sec.

405(a), Dec. 27, 2001, 115 Stat. 993.)

-MISC1-

AMENDMENTS

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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 902(4), substituted "The

loan" for "the loan".

Subsec. (b)(4). Pub. L. 103-446, Sec. 902(5), added par. (4).

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

1991 - Pub. L. 102-83, Sec. 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, Sec. 5(c)(1), substituted

"3701(b)" for "1801(b)".

1989 - Subsecs. (a)(1)(ii), (b). Pub. L. 101-237, Sec. 313(b)(1),

substituted "Secretary" for "Administrator" wherever appearing.

Subsec. (b)(3). Pub. L. 101-237, Sec. 310, added par. (3).

Subsecs. (c) to (e). Pub. L. 101-237, Sec. 313(b)(1), substituted

"Secretary" for "Administrator" wherever appearing.

1988 - Subsec. (a)(1). Pub. L. 100-322, Sec. 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, Sec. 415(a)(1)(F), added

pars. (2) and (3).

Subsec. (a)(4). Pub. L. 100-322, Sec. 415(a)(2), redesignated

subsec. (g) as (a)(4) and substituted "1801(b)" for "1801(a)".

Subsec. (g). Pub. L. 100-322, Sec. 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, Sec. 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, Sec. 303(b)(3), substituted

"insurance housing loan entitlement" for "insurance entitlement" in

two places.

Subsec. (d). Pub. L. 97-72, Sec. 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, Sec. 303(b)(6), substituted "require

housing loans" for "require loans".

Subsec. (f). Pub. L. 97-72, Sec. 303(b)(7), substituted "Any

housing loan at least" for "Any loan at least".

1978 - Subsec. (a). Pub. L. 95-476, Sec. 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, Sec. 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, Sec. 7(3), substituted "the

Administrator deems" for "he deems" and "the veteran-transferee's

entitlement" for "his entitlement".

Subsec. (c). Pub. L. 94-324, Sec. 7(4), substituted "The

Administrator" for "He".

Subsec. (d). Pub. L. 94-324, Sec. 7(4), substituted "the

Administrator" for "him" and "he".

Subsec. (e). Pub. L. 94-324, Sec. 7(5), substituted "the

Administrator" for "him" in first sentence.

Subsec. (g). Pub. L. 94-324, Sec. 7(5), substituted "the

veteran's spouse" for "his wife".

1974 - Subsec. (b). Pub. L. 93-569, Sec. 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, Sec. 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 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

Section 108 of title I of Pub. L. 95-476 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

Section 10 of Pub. L. 93-569 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

Section 2(c) of Pub. L. 102-547 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, Sec. 201(b), Feb. 13, 1996, 110 Stat. 770.

REFERENCES IN OTHER LAWS

Section 415(c)(7) of Pub. L. 100-322 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

Section 415(f) of Pub. L. 100-322 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]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3703, 3710, 3712, 3714,

3729, 3731, 3744, 5102 of this title; title 12 sections 1715z-13a,

1715z-13b.

-End-

-CITE-

38 USC Sec. 3703 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER I - GENERAL

-HEAD-

Sec. 3703. Basic provisions relating to loan guaranty and insurance

-STATUTE-

(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), (6), or (8) of section

3710(a) of this title, the lesser of $60,000 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, $60,000, 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.

(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 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) 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.

(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.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1205, 1212, Sec. 1803;

Pub. L. 86-73, Sec. 2, June 30, 1959, 73 Stat. 156; Pub. L. 86-665,

Sec. 1, July 14, 1960, 74 Stat. 531; Pub. L. 87-84, Sec. 1(a), July

6, 1961, 75 Stat. 201; Pub. L. 89-358, Sec. 5(d), Mar. 3, 1966, 80

Stat. 26; Pub. L. 90-77, title IV, Sec. 403(b), Aug. 31, 1967, 81

Stat. 190; Pub. L. 91-22, Sec. 4, June 6, 1969, 83 Stat. 32; Pub.

L. 91-506, Sec. 2(b), (c), Oct. 23, 1970, 84 Stat. 1108; Pub. L.

93-75, July 26, 1973, 87 Stat. 176; Pub. L. 93-569, Secs. 2(c),

8(1)-(5), Dec. 31, 1974, 88 Stat. 1863, 1866; Pub. L. 94-324, Sec.

7(6), (16), June 30, 1976, 90 Stat. 721; Pub. L. 95-476, title I,

Sec. 103, Oct. 18, 1978, 92 Stat. 1498; Pub. L. 96-385, title IV,

Sec. 401(c)(1), Oct. 7, 1980, 94 Stat. 1533; Pub. L. 97-66, title

V, Sec. 501(a), Oct. 17, 1981, 95 Stat. 1031; Pub. L. 97-72, title

III, Sec. 303(c), (e), Nov. 3, 1981, 95 Stat. 1060; Pub. L. 97-295,

Sec. 4(61), (63), Oct. 12, 1982, 96 Stat. 1309; Pub. L. 97-306,

title IV, Sec. 406(b), Oct. 14, 1982, 96 Stat. 1444; Pub. L.

98-223, title II, Sec. 205(c), Mar. 2, 1984, 98 Stat. 43; Pub. L.

100-198, Sec. 3(a)(1), Dec. 21, 1987, 101 Stat. 1315; Pub. L.

100-253, Sec. 3(a), Feb. 29, 1988, 102 Stat. 20; Pub. L. 100-322,

title IV, Sec. 415(a)(3), (c)(2), (d)(1), May 20, 1988, 102 Stat.

550-552; Pub. L. 101-237, title III, Secs. 304(a), 306(a),

313(b)(1), (6), Dec. 18, 1989, 103 Stat. 2073, 2074, 2077; Pub. L.

102-54, Secs. 4(b), 6, June 13, 1991, 105 Stat. 268; renumbered

Sec. 3703 and amended Pub. L. 102-83, Sec. 5(a), (c)(1), Aug. 6,

1991, 105 Stat. 406; Pub. L. 102-547, Sec. 10(a), Oct. 28, 1992,

106 Stat. 3643; Pub. L. 103-78, Sec. 6, Aug. 13, 1993, 107 Stat.

769; Pub. L. 103-353, Sec. 7, Oct. 13, 1994, 108 Stat. 3175; Pub.

L. 104-110, title I, Sec. 101(d), Feb. 13, 1996, 110 Stat. 768;

Pub. L. 105-368, title VI, Sec. 602(e)(1)(A), Nov. 11, 1998, 112

Stat. 3346; Pub. L. 107-103, title IV, Sec. 401, Dec. 27, 2001, 115

Stat. 993; Pub. L. 107-330, title III, Sec. 308(f)(1), Dec. 6,

2002, 116 Stat. 2828.)

-REFTEXT-

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 (Secs. 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.

-MISC1-

AMENDMENTS

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, Sec. 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, Sec. 10(a)(2), added par. (4).

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1803 of this

title as this section.

Subsec. (a)(1)(A). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3710" for "1810" in introductory provisions.

Subsec. (a)(1)(A)(i)(III). Pub. L. 102-54, Sec. 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, Sec. 5(c)(1),

substituted "3710(a)" for "1810(a)".

Pub. L. 102-54, Sec. 6(2), substituted "(6), or (8)" for "or

(6)".

Subsec. (a)(1)(B). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3710" for "1810" and "3702(b)" for "1802(b)".

Subsec. (c)(1). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3710(a)" for "1810(a)".

Subsec. (c)(3). Pub. L. 102-83, Sec. 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, Sec. 5(c)(1), substituted "3729"

for "1829" and "3729(c)(1)" for "1829(c)(1)".

Subsec. (e)(2). Pub. L. 102-83, Sec. 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, Sec. 4(b), added subsec. (f).

1989 - Subsec. (a)(1)(A)(i). Pub. L. 101-237, Sec. 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, Sec. 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, Sec. 313(b)(1), substituted

"Secretary" for "Administrator" wherever appearing.

Subsec. (c)(1). Pub. L. 101-237, Sec. 313(b)(6), substituted

"Secretary of Housing and Urban Development considers" for

"Secretary considers".

Pub. L. 101-237, Sec. 313(b)(1), substituted "Secretary" for

"Administrator" wherever appearing.

Subsec. (c)(2)(B), (3)(D). Pub. L. 101-237, Sec. 313(b)(1),

substituted "Secretary" for "Administrator".

Subsec. (d)(2)(B), (C), (3). Pub. L. 101-237, Sec. 313(b)(1),

substituted "Secretary" and "Secretary's" for "Administrator" and

"Administrator's", respectively, wherever appearing.

Subsec. (e). Pub. L. 101-237, Sec. 304(a), added subsec. (e).

1988 - Pub. L. 100-322, Sec. 415(a)(3)(B), inserted "and

insurance" in section catchline.

Subsec. (a)(1). Pub. L. 100-322, Sec. 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, Sec. 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, Sec. 415(c)(2)(A),

substituted "1812(a)(1)(F)" for "1819(a)(1)(F)".

Subsec. (c)(3)(E). Pub. L. 100-322, Sec. 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, Sec. 205(c)(1),

substituted ", (8), or (9)(B)(i)" for "or (8)".

Subsec. (c)(3)(E). Pub. L. 98-223, Sec. 205(c)(2), inserted

"1810(a)(9)(B)(ii) or" after "section".

1982 - Subsec. (a)(1). Pub. L. 97-295, Sec. 4(61), substituted

"percent" for "per centum".

Subsec. (a)(2). Pub. L. 97-295, Sec. 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, Sec. 4(63)(B), inserted "(12

U.S.C. 1709(b))" after "the National Housing Act".

Subsec. (c)(3). Pub. L. 97-306, Sec. 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, Sec. 406(b)(2)-(4), added cl.

(E).

Subsec. (d)(3). Pub. L. 97-295, Sec. 4(63)(C), substituted "June

6, 1969" for "the effective date of this amendment".

1981 - Subsec. (a)(2)(A) [formerly Sec. 1815(a)]. Pub. L. 97-72,

Sec. 303(e), substituted "Any housing loan" for "Any loan". See

1988 Amendment note above.

Subsec. (d)(1). Pub. L. 97-72, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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 Sec. 1815(a)]. Pub. L. 94-324,

Sec. 7(16), substituted "the Administrator will" for "he will". See

1988 Amendment note above.

Subsec. (d)(3). Pub. L. 94-324, Sec. 7(6), substituted "the

Administrator determines" for "he determines".

1974 - Subsec. (a)(1). Pub. L. 93-569, Sec. 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 Sec. 1815(b)]. Pub. L. 93-569, Sec.

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, Sec. 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, Sec. 2(c), added par. (3).

Subsec. (d)(1). Pub. L. 93-569, Sec. 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, Sec. 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, Sec. 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, Sec. 2(c)(1), substituted "1810,

1811, and 1819" for "1810 and 1811".

Subsec. (d)(1). Pub. L. 91-506, Sec. 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 5 1/4 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 4 3/4 to 5 1/4 percent.

EFFECTIVE DATE OF 2002 AMENDMENT

Pub. L. 107-330, title III, Sec. 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

Section 306(b) of Pub. L. 101-237 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

Section 3(c) of Pub. L. 100-253 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

Section 3(d) of Pub. L. 100-198 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.

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

Section 10(b) of Pub. L. 102-547, as amended by Pub. L. 103-446,

title XII, Sec. 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, Sec.

201(b), Feb. 13, 1996, 110 Stat. 770.

EXPIRATION OF LOAN BENEFIT ENTITLEMENT OF CERTAIN WORLD WAR II

VETERANS

Section 403(c) of Pub. L. 90-77 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].

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3710, 3712, 3732, 3736,

3762 of this title.

-End-

-CITE-

38 USC Sec. 3704 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER I - GENERAL

-HEAD-

Sec. 3704. Restrictions on loans

-STATUTE-

(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 -

(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.

(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.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1206, Sec. 1804; Pub. L.

86-73, Sec. 3, June 30, 1959, 73 Stat. 156; Pub. L. 86-665, Sec. 5,

July 14, 1960, 74 Stat. 532; Pub. L. 89-117, title II, Sec. 217(b),

Aug. 10, 1965, 79 Stat. 473; Pub. L. 90-19, Sec. 25(2), May 25,

1967, 81 Stat. 28; Pub. L. 91-506, Sec. 2(d), Oct. 23, 1970, 84

Stat. 1108; Pub. L. 93-569, Sec. 2(d), (e), Dec. 31, 1974, 88 Stat.

1863, 1864; Pub. L. 94-324, Sec. 7(7), (8), June 30, 1976, 90 Stat.

721; Pub. L. 97-295, Sec. 4(64), Oct. 12, 1982, 96 Stat. 1309; Pub.

L. 100-198, Secs. 8(a)(1), 10(b), Dec. 21, 1987, 101 Stat. 1319,

1323; Pub. L. 100-322, title IV, Sec. 415(c)(3), May 20, 1988, 102

Stat. 551; Pub. L. 101-237, title III, Sec. 313(b)(1), Dec. 18,

1989, 103 Stat. 2077; renumbered Sec. 3704 and amended Pub. L.

102-83, Sec. 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L.

102-486, title I, Sec. 101(c)(2), Oct. 24, 1992, 106 Stat. 2787;

Pub. L. 103-446, title IX, Sec. 903, Nov. 2, 1994, 108 Stat. 4676.)

-REFTEXT-

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 (Sec. 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.

-MISC1-

AMENDMENTS

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).

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1804 of this

title as this section.

Subsec. (c)(2). Pub. L. 102-83, Sec. 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, Sec. 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, Sec. 415(c)(3)(A),

substituted "1812(a)(5)(A)(i)" for "1819(a)(5)(A)(i)".

Subsec. (c)(2)(D). Pub. L. 100-322, Sec. 415(c)(3)(b),

substituted "1812(e)(5)" for "1819(e)(5)".

Subsec. (f). Pub. L. 100-322, Sec. 415(c)(3)(C), substituted

"section 1814" for "section 1817A" in two places.

1987 - Subsec. (c). Pub. L. 100-198, Sec. 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, Sec. 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, Sec. 7(7), substituted "the

veteran" for "he" in six places and "the veteran's" for "his"

wherever appearing.

Subsec. (d). Pub. L. 94-324, Sec. 7(8), substituted "the

Administrator may" for "he may".

1974 - Subsec. (b). Pub. L. 93-569, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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

Section 8(c) of Pub. L. 100-198 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.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3706, 3710, 3711, 3712,

3762 of this title.

-End-

-CITE-

38 USC Sec. 3705 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER I - GENERAL

-HEAD-

Sec. 3705. Warranties

-STATUTE-

(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.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1206, Sec. 1805; Pub. L.

94-324, Sec. 7(9), June 30, 1976, 90 Stat. 721; Pub. L. 101-237,

title III, Sec. 313(b)(1), Dec. 18, 1989, 103 Stat. 2077; Pub. L.

102-54, Sec. 15(a)(1), June 13, 1991, 105 Stat. 288; renumbered

Sec. 3705, Pub. L. 102-83, Sec. 5(a), Aug. 6, 1991, 105 Stat. 406;

Pub. L. 103-446, title XII, Sec. 1202(a)(2), Nov. 2, 1994, 108

Stat. 4689.)

-MISC1-

AMENDMENTS

1994 - Subsec. (a). Pub. L. 103-446 made technical correction to

directory language of Pub. L. 102-54, Sec. 15(a)(1)(A). See 1991

Amendment note below.

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1805 of this

title as this section.

Subsec. (a). Pub. L. 102-54, Sec. 15(a)(1)(B), substituted

"appraisal)" for "approval)" in second sentence.

Pub. L. 102-54, Sec. 15(a)(1)(A), as amended by Pub. L. 103-446,

substituted "appraised" for "approved" before "for guaranty" in

first sentence.

1989 - Pub. 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

Section 1202(a) of Pub. L. 103-446 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.

-End-

-CITE-

38 USC Sec. 3706 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER I - GENERAL

-HEAD-

Sec. 3706. Escrow of deposits and downpayments

-STATUTE-

(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.

-SOURCE-

(Added Pub. L. 86-665, Sec. 6(a), July 14, 1960, 74 Stat. 532, Sec.

1806; amended Pub. L. 94-324, Sec. 7(10), June 30, 1976, 90 Stat.

721; Pub. L. 101-237, title III, Sec. 313(b)(1), Dec. 18, 1989, 103

Stat. 2077; renumbered Sec. 3706 and amended Pub. L. 102-83, Sec.

5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 103-446, title

XII, Sec. 1201(e)(13), Nov. 2, 1994, 108 Stat. 4685.)

-MISC1-

AMENDMENTS

1994 - Pub. 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.

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1806 of this

title as this section.

Pub. L. 102-83, Sec. 5(c)(1), substituted "3704(b)" for "1804(b)"

in subsecs. (a) and (b).

1989 - Pub. 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.

-End-

-CITE-

38 USC Sec. 3707 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER I - GENERAL

-HEAD-

Sec. 3707. Adjustable rate mortgages

-STATUTE-

(a) The Secretary shall carry out a demonstration project under

this section during fiscal years 1993, 1994, and 1995 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.

-SOURCE-

(Added Pub. L. 102-547, Sec. 3(a)(1), Oct. 28, 1992, 106 Stat.

3634; amended Pub. L. 103-78, Sec. 7, Aug. 13, 1993, 107 Stat.

769.)

-REFTEXT-

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, as amended. Title II

of the Act is classified generally to subchapter II (Sec. 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.

-MISC1-

AMENDMENTS

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 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, Sec. 201(b), Feb. 13, 1996, 110 Stat.

770.

-End-

-CITE-

38 USC Sec. 3707A 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER I - GENERAL

-HEAD-

Sec. 3707A. Hybrid adjustable rate mortgages

-STATUTE-

(a) The Secretary shall carry out a demonstration project under

this section during fiscal years 2004 and 2005 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) 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.

(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.

-SOURCE-

(Added Pub. L. 107-330, title III, Sec. 303(a), Dec. 6, 2002, 116

Stat. 2825.)

-REFTEXT-

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 (Sec. 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.

-End-

-CITE-

38 USC Sec. 3708 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER I - GENERAL

-HEAD-

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

-STATUTE-

(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.

-SOURCE-

(Added Pub. L. 104-106, div. B, title XXVIII, Sec. 2822(b)(1), Feb.

10, 1996, 110 Stat. 556.)

-MISC1-

AUTHORITY OF SECRETARY OF DEFENSE

Section 2822(c) of Pub. L. 104-106 provided that:

"(1) Reimbursement for buy down costs. - The Secretary of Defense

shall reimburse the Secretary of Veterans Affairs for amounts paid

by the Secretary of Veterans Affairs to mortgagees under section

3708 of title 38, United States Code, as added by subsection (b).

"(2) Designation of housing shortage areas. - For purposes of

section 3708 of title 38, United States Code, the Secretary of

Defense may designate as a housing shortage area a military

installation in the United States at which the Secretary determines

there is a shortage of suitable housing to meet the military family

needs of members of the Armed Forces and the dependents of such

members.

"(3) Report. - Not later than March 30, 1998, the Secretary shall

submit to Congress a report regarding the effectiveness of the

authority provided in section 3708 of title 38, United States Code,

in ensuring that members of the Armed Forces and their dependents

have access to suitable housing. The report shall include the

recommendations of the Secretary regarding whether the authority

provided in this subsection should be extended beyond the date

specified in paragraph (5).

"(4) Earmark. - Of the amount provided in section 2405(a)(11)(B)

[110 Stat. 538], $10,000,000 for fiscal year 1996 shall be

available to carry out this subsection.

"(5) Sunset. - This subsection shall not apply with respect to

housing loans guaranteed after September 30, 1998, for which

assistance payments are paid under section 3708 of title 38, United

States Code."

-End-

-CITE-

38 USC SUBCHAPTER II - LOANS 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER II - LOANS

-HEAD-

SUBCHAPTER II - LOANS

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in section 113 of this title;

title 2 section 905.

-End-

-CITE-

38 USC Sec. 3710 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER II - LOANS

-HEAD-

Sec. 3710. Purchase or construction of homes

-STATUTE-

(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).

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 90 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, Sec. 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.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1207, Sec. 1810; Pub. L.

90-301, Secs. 1(a), 2(a), May 7, 1968, 82 Stat. 113; Pub. L.

91-506, Sec. 3, Oct. 23, 1970, 84 Stat. 1108; Pub. L. 93-569, Sec.

3, Dec. 31, 1974, 88 Stat. 1864; Pub. L. 94-324, Sec. 7(11), June

30, 1976, 90 Stat. 721; Pub. L. 95-476, title I, Secs. 104, 105(a),

Oct. 18, 1978, 92 Stat. 1498, 1499; Pub. L. 96-385, title IV, Secs.

401(a), 402(a), Oct. 7, 1980, 94 Stat. 1532, 1533; Pub. L. 98-223,

title II, Sec. 205(a), Mar. 2, 1984, 98 Stat. 42; Pub. L. 99-576,

title IV, Sec. 402(a), (b), Oct. 28, 1986, 100 Stat. 3280; Pub. L.

100-198, Secs. 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,

Sec. 415(c)(4), May 20, 1988, 102 Stat. 551; Pub. L. 101-237, title

III, Secs. 309, 313(b)(1), Dec. 18, 1989, 103 Stat. 2075, 2077;

renumbered Sec. 3710 and amended Pub. L. 102-83, Secs.

4(a)(2)(A)(iv), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 403, 406;

Pub. L. 102-547, Secs. 6(1), 9(a), (b), Oct. 28, 1992, 106 Stat.

3636, 3641, 3642; Pub. L. 103-446, title IX, Secs. 904(a), (b),

905, Nov. 2, 1994, 108 Stat. 4676, 4677; Pub. L. 104-110, title I,

Sec. 101(e), Feb. 13, 1996, 110 Stat. 768.)

-COD-

CODIFICATION

Another section 11(b) of Pub. L. 100-198 amended section 1831

[now 3731] of this title.

-MISC1-

AMENDMENTS

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, Sec. 904(a), added par.

(11).

Subsec. (e)(1). Pub. L. 103-446, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 9(b)(2), added par. (10).

Subsec. (d). Pub. L. 102-547, Sec. 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, Sec. 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;".

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1810 of this

title as this section.

Subsec. (a). Pub. L. 102-83, Sec. 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, Sec. 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, Sec. 5(c)(1), substituted

"3703(c)(3)(A)" for "1803(c)(3)(A)".

Subsec. (e)(2). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3702(b)" for "1802(b)".

Pub. L. 102-83, Sec. 4(a)(2)(A)(iv), substituted "Secretary" for

"Veterans' Administration".

Subsec. (g)(2). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3712(e)(2)" for "1812(e)(2)".

1989 - Subsec. (a)(6). Pub. L. 101-237, Sec. 313(b)(1),

substituted "Secretary" for "Administrator" wherever appearing.

Subsec. (b)(5) to (8). Pub. L. 101-237, Sec. 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, Sec. 313(b)(1), substituted

"Secretary" and "Secretary's" for "Administrator" and

"Administrator's", respectively, wherever appearing.

Subsec. (h). Pub. L. 101-237, Sec. 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, Sec. 415(c)(4)(A),

substituted "section 1812(a)(5)" for "section 1819(a)(5)".

Subsec. (g)(2). Pub. L. 100-322, Sec. 415(c)(4)(B), substituted

"section 1812(e)(2)" for "section 1819(e)(2)".

1987 - Subsec. (a). Pub. L. 100-198, Sec. 8(a)(2), substituted

"Except as provided in section 1804(c)(2) of this title, any" for

"Any".

Subsec. (b). Pub. L. 100-198, Sec. 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, Sec. 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, Sec. 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, Sec. 7(a)(2), struck out

"and" at end.

Subsec. (e)(1)(E). Pub. L. 100-198, Sec. 7(a)(3), substituted "by

more than 10 years; and" for period at end.

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

Subsec. (g)(3). Pub. L. 100-198, Sec. 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, Sec. 7(c), added subsec. (h).

1986 - Subsec. (b)(3). Pub. L. 99-576, Sec. 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, Sec. 402(b), added subsec. (g).

1984 - Subsec. (a)(9). Pub. L. 98-223, Sec. 205(a)(1), added par.

(9).

Subsec. (f). Pub. L. 98-223, Sec. 205(a)(2), added subsec. (f).

1980 - Subsec. (a)(8). Pub. L. 96-385, Sec. 401(a)(1), added par.

(8).

Subsec. (c). Pub. L. 96-385, Sec. 402(a), substituted "$27,500"

for "$25,000".

Subsec. (e). Pub. L. 96-385, Sec. 401(a)(2), added subsec. (e).

1978 - Subsec. (a)(6). Pub. L. 95-476, Sec. 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, Sec. 104(2), added par. (7).

Subsec. (c). Pub. L. 95-476, Sec. 105(a), substituted "$25,000"

for "$17,500".

Subsec. (d). Pub. L. 95-476, Sec. 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, Sec. 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, Sec. 3(2), added par. (6).

Subsec. (c). Pub. L. 93-569, Sec. 3(3), substituted "$17,500" for

"$12,500".

Subsec. (d). Pub. L. 93-569, Sec. 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, Sec. 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, Sec. 3(2), added subsec. (d).

1968 - Subsec. (b). Pub. L. 90-301, Sec. 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, Sec. 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

Section 9(c) of Pub. L. 102-547 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, Sec. 201(b), Feb. 13, 1996,

110 Stat. 770.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3701, 3703, 3704, 3708,

3711, 3712, 3713, 3714, 3722, 3729, 3732, 3733, 3736, 3762 of this

title.

-End-

-CITE-

38 USC Sec. 3711 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER II - LOANS

-HEAD-

Sec. 3711. Direct loans to veterans

-STATUTE-

(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.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1208, Sec. 1811; Pub. L.

86-665, Sec. 2, July 14, 1960, 74 Stat. 531; Pub. L. 87-84, Sec. 2,

July 6, 1961, 75 Stat. 201; Pub. L. 88-402, Aug. 4, 1964, 78 Stat.

380; Pub. L. 89-358, Sec. 5(e), Mar. 3, 1966, 80 Stat. 26; Pub. L.

90-77, title IV, Sec. 404, Aug. 31, 1967, 81 Stat. 190; Pub. L.

90-301, Sec. 1(b), May 7, 1968, 82 Stat. 113; Pub. L. 91-22, Sec.

3, June 6, 1969, 83 Stat. 32; Pub. L. 91-506, Sec. 4, Oct. 23,

1970, 84 Stat. 1109; Pub. L. 92-66, Aug. 5, 1971, 85 Stat. 173;

Pub. L. 93-569, Sec. 4, Dec. 31, 1974, 88 Stat. 1864; Pub. L.

94-324, Secs. 3, 7(12)-(15), June 30, 1976, 90 Stat. 720, 721; Pub.

L. 95-476, title I, Sec. 105(b), Oct. 18, 1978, 92 Stat. 1499; Pub.

L. 96-385, title IV, Secs. 401(c)(2), 402(b), Oct. 7, 1980, 94

Stat. 1533; Pub. L. 97-295, Sec. 4(65), Oct. 12, 1982, 96 Stat.

1309; Pub. L. 97-306, title IV, Sec. 406(c)(1), Oct. 14, 1982, 96

Stat. 1445; Pub. L. 100-198, Sec. 3(c), Dec. 21, 1987, 101 Stat.

1316; Pub. L. 100-322, title IV, Sec. 415(c)(5), (d)(2) May 20,

1988, 102 Stat. 551, 552; Pub. L. 101-237, title III, Sec.

313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec. 3711 and

amended Pub. L. 102-83, Sec. 5(a), (c)(1), Aug. 6, 1991, 105 Stat.

406; Pub. L. 105-368, title VI, Sec. 602(e)(1)(B), Nov. 11, 1998,

112 Stat. 3346.)

-REFTEXT-

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 (Sec. 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 (Sec.

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.

-MISC1-

AMENDMENTS

1998 - Subsec. (k). Pub. L. 105-368 struck out "and section 3723

of this title" after "functions under this section" in two places.

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1811 of this

title as this section.

Subsec. (a). Pub. L. 102-83, Sec. 5(c)(1), substituted "3710 or

3712" for "1810 or 1812".

Subsec. (b). Pub. L. 102-83, Sec. 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, Sec. 5(c)(1), substituted "3710

or 3712" for "1810 or 1812".

Subsec. (d)(2). Pub. L. 102-83, Sec. 5(c)(1), substituted "3712"

for "1812" and "3710" for "1810" in subpars. (A) and (B).

Subsec. (e). Pub. L. 102-83, Sec. 5(c)(1), substituted "3710(a)"

for "1810(a)".

Subsec. (g). Pub. L. 102-83, Sec. 5(c)(1), substituted "3710 or

3712" for "1810 or 1812".

Subsec. (h). Pub. L. 102-83, Sec. 5(c)(1), substituted "3704" for

"1804".

Subsec. (k). Pub. L. 102-83, Sec. 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, Sec. 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, Sec. 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, Sec. 415(c)(5)(A),

substituted "1812" for "1819".

Subsec. (d)(2)(B). Pub. L. 100-322, Sec. 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, Sec. 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, Sec. 406(c)(1),

substituted "manufactured home" for "mobile home".

Subsec. (c)(2). Pub. L. 97-295, Sec. 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, Sec. 406(c)(1), substituted

"manufactured home" for "mobile home".

Subsec. (d)(2)(B). Pub. L. 97-295, Sec. 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, Sec. 4(65)(C), substituted "percent"

for "per centum" wherever appearing.

1980 - Subsec. (b). Pub. L. 96-385, Sec. 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, Sec. 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, Sec. 105(b)(1),

substituted "$25,000" for "$17,500" in two places.

Subsec. (d)(2)(B). Pub. L. 95-476, Sec. 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, Sec. 7(12), substituted "the

Administrator shall" for "he shall" and "The Administrator" for

"He".

Subsec. (c). Pub. L. 94-324, Sec. 7(13), substituted "the

veteran" for "he" wherever appearing.

Subsec. (d)(2)(A). Pub. L. 94-324, Sec. 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, Sec. 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, Sec. 7(14), substituted "the

Administrator" for "him" and "he" wherever appearing.

Subsec. (k). Pub. L. 94-324, Sec. 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, Sec. 4(1), substituted "1810

or 1819" for "1810".

Subsec. (b). Pub. L. 91-506, Sec. 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, Sec. 4(3), (4), inserted

reference to mobile home loans.

Subsec. (d)(2)(A). Pub. L. 91-506, Sec. 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, Sec. 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, Sec. 4(7), substituted "1810 or 1819

of this title, as appropriate" for "1810 of this title".

Subsec. (h). Pub. L. 91-506, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 2(a), substituted

"$15,000" for "$13,500" wherever appearing.

Subsec. (h). Pub. L. 87-84, Sec. 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.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3710, 3712, 3729, 3732 of

this title.

-End-

-CITE-

38 USC Sec. 3712 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER II - LOANS

-HEAD-

Sec. 3712. Loans to purchase manufactured homes and lots

-STATUTE-

(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.

-SOURCE-

(Added Pub. L. 91-506, Sec. 5, Oct. 23, 1970, 84 Stat. 1110, Sec.

1819; amended Pub. L. 93-569, Sec. 5, Dec. 31, 1974, 88 Stat. 1864;

Pub. L. 94-324, Secs. 5, 7(20)-(23), June 30, 1976, 90 Stat. 720,

722; Pub. L. 95-476, title I, Sec. 107, Oct. 18, 1978, 92 Stat.

1500; Pub. L. 96-385, title IV, Secs. 401(b), 402(c), Oct. 7, 1980,

94 Stat. 1532, 1533; Pub. L. 97-66, title V, Sec. 503, Oct. 17,

1981, 95 Stat. 1032; Pub. L. 97-72, title III, Sec. 303(h), (i),

Nov. 3, 1981, 95 Stat. 1060; Pub. L. 97-295, Sec. 4(66), Oct. 12,

1982, 96 Stat. 1310; Pub. L. 97-306, title IV, Sec. 406(a), (c)(2),

Oct. 14, 1982, 96 Stat. 1444, 1445; Pub. L. 98-223, title II, Sec.

205(b), Mar. 2, 1984, 98 Stat. 43; Pub. L. 99-576, title IV, Sec.

402(c)(2), Oct. 28, 1986, 100 Stat. 3281; Pub. L. 100-198, Secs.

3(b), 7(b), 8(b), Dec. 21, 1987, 101 Stat. 1315, 1318, 1320; Pub.

L. 100-253, Sec. 3(b), Feb. 29, 1988, 102 Stat. 20; renumbered Sec.

1812 and amended Pub. L. 100-322, title IV, Sec. 415(b)(4), May 20,

1988, 102 Stat. 551; Pub. L. 101-237, title III, Sec. 313(b)(1),

(7), Dec. 18, 1989, 103 Stat. 2077; Pub. L. 101-508, title VIII,

Sec. 8031(a), Nov. 5, 1990, 104 Stat. 1388-348; Pub. L. 102-54,

Sec. 14(c)(8), June 13, 1991, 105 Stat. 285; renumbered Sec. 3712

and amended Pub. L. 102-83, Secs. 4(a)(2)(A)(v), 5(a), (c)(1), Aug.

6, 1991, 105 Stat. 403, 406; Pub. L. 1102-547, Sec. 6(2), Oct. 28,

1992, 106 Stat. 3636; Pub. L. 103-446, title IX, Sec. 906, title

XII, Sec. 1201(e)(14), Nov. 2, 1994, 108 Stat. 4677, 4685; Pub. L.

104-66, title I, Sec. 1141(b), Dec. 21, 1995, 109 Stat. 726.)

-MISC1-

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, Sec.

1201(e)(14)(A)(i), inserted "of" after "subparagraph (B)" in

introductory provisions.

Subsec. (c)(3)(E). Pub. L. 103-446, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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;".

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1812 of this

title as this section.

Subsec. (a)(4)(A)(iii). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3703(c)(3)(A)" for "1803(c)(3)(A)".

Subsec. (a)(4)(B). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3702(b)" for "1802(b)".

Pub. L. 102-83, Sec. 4(a)(2)(A)(v), substituted "Secretary" for

"Veterans' Administration".

Subsec. (a)(5)(A). Pub. L. 102-83, Sec. 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, Sec. 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, Sec. 4(a)(2)(A)(v), substituted "Secretary" for

"Veterans' Administration".

Subsec. (b)(2). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3702(b)" for "1802(b)".

Subsec. (c)(1). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3702(d)" for "1802(d)".

Subsec. (c)(4). Pub. L. 102-83, Sec. 5(c)(1), substituted "3710

or 3711" for "1810 or 1811" and "3710" for "1810".

Subsec. (c)(5). Pub. L. 102-54, Sec. 14(c)(8)(A), substituted

"for purposes specified in this section" for "under this section".

Subsec. (e)(2). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3710(g)" for "1810(g)".

Subsec. (e)(5). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3704(c)(2)" for "1804(c)(2)".

Subsec. (l). Pub. L. 102-54, Sec. 14(c)(8)(B), struck out ",

beginning 12 months following October 23, 1970," after "shall".

Subsec. (m). Pub. L. 102-83, Sec. 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, Sec.

313(b)(1), substituted "Secretary" and "Secretary's" for

"Administrator" and "Administrator's", respectively, wherever

appearing.

Subsec. (h)(2)(B). Pub. L. 101-237, Sec. 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, Sec. 313(b)(1), substituted

"Secretary" and "Secretary's" for "Administrator" and

"Administrator's", respectively, wherever appearing.

1988 - Pub. L. 100-322, Sec. 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, Sec.

415(b)(4)(A), substituted "for purposes specified in this section"

for "under this section".

Subsec. (c)(3). Pub. L. 100-322, Sec. 415(b)(4)(B)(i), inserted

"as specified in paragraph (4) of this subsection" before period at

end.

Pub. L. 100-253, Sec. 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, Sec. 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, Sec. 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, Sec. 3(b)(3), added par. (5).

Subsecs. (d)(1), (e) to (g), (h)(1). Pub. L. 100-322, Sec.

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, Sec. 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, Sec. 7(b)(2)-(4), added

cl. (vi).

Subsec. (a)(5)(A)(i). Pub. L. 100-198, Sec. 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, Sec. 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, Sec. 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, Sec. 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.

1982 - Pub. L. 97-306, Sec. 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, Sec. 406(c)(2)(A),

substituted "manufactured" for "mobile" wherever appearing.

Subsec. (a)(1)(G). Pub. L. 97-306, Sec. 406(a)(1), added cl. (G).

Subsec. (a)(2). Pub. L. 97-306, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 406(c)(2)(A), substituted

"manufactured" for "mobile" wherever appearing.

1981 - Subsec. (a)(1). Pub. L. 97-72, Sec. 303(h), substituted

"housing loan benefits" for "benefits".

Subsec. (b)(2). Pub. L. 97-72, Sec. 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, Sec. 401(b)(1), added

cl. (F).

Subsec. (a)(4). Pub. L. 96-385, Sec. 401(b)(2), added par. (4).

Subsec. (c)(3), (4). Pub. L. 96-385, Sec. 402(c), substituted

"$20,000" for "$17,500" once in par. (3) and twice in par. (4).

1978 - Subsec. (a). Pub. L. 95-476, Sec. 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, Sec. 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, Sec. 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, Sec. 107(b)(1), struck out

provisions relating to eligible purposes of mobile home loans under

this section.

Subsec. (c)(3). Pub. L. 95-476, Sec. 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, Sec. 107(b)(3), added par. (4).

Subsec. (d). Pub. L. 95-476, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 107(f), added par. (2).

Subsec. (i). Pub. L. 95-476, Sec. 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, Sec. 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, Sec. 107(e), redesignated subsec.

(l) as (k). Former subsec. (k) redesignated (j).

Subsec. (l). Pub. L. 95-476, Sec. 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, Sec. 107(e), redesignated

subsec. (n) as (m). Former subsec. (m) redesignated (l).

1976 - Subsec. (c)(1). Pub. L. 94-324, Sec. 7(20), substituted

"the Administrator determines" for "he determines".

Subsec. (c)(3). Pub. L. 94-324, Secs. 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, Sec. 7(21), substituted "the

Administrator's" for "his".

Subsec. (d)(3). Pub. L. 94-324, Sec. 7(21), substituted "the

Administrator shall" for "he shall".

Subsec. (e)(4). Pub. L. 94-324, Sec. 7(22), substituted

"subsection" for "subparagraph".

Subsec. (e)(5). Pub. L. 94-324, Sec. 7(22), substituted "the

veteran will" for "he will" and "the veteran's" for "his".

Subsec. (f). Pub. L. 94-324, Sec. 7(23), substituted "the

Administrator determines" for "he determines".

Subsec. (h). Pub. L. 94-324, Sec. 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, Sec. 7(23), substituted "the

manufacturer's obligations" for "his obligations".

Subsec. (l). Pub. L. 94-324, Sec. 7(23), substituted "the

Administrator determines" for "he determines".

1974 - Subsec. (a). Pub. L. 93-569, Sec. 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, Sec. 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, Sec. 5(2), added par. (2).

Subsec. (c)(1). Pub. L. 93-569, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 5(6), added

subpars. (D) to (H).

Subsec. (e)(3). Pub. L. 93-569, Sec. 5(7), inserted "purchased

with the proceeds of the loan and on" after "mobile home".

Subsec. (f). Pub. L. 93-569, Sec. 5(8), inserted "and mobile home

lot loans" after "loans".

Subsec. (i). Pub. L. 93-569, Sec. 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, Sec. 5(10), inserted "and mobile

home lot loans" after "mobile home loans".

Subsec. (o). Pub. L. 93-569, Sec. 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

Section 8031(b) of Pub. L. 101-508 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

Section 8 of Pub. L. 91-506 provided that: "Section 5 of this Act

[enacting this section] shall become effective sixty days following

the date of enactment [Oct. 23, 1970]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3701, 3703, 3704, 3710,

3711, 3729, 3762 of this title.

-End-

-CITE-

38 USC Sec. 3713 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER II - LOANS

-HEAD-

Sec. 3713. Release from liability under guaranty

-STATUTE-

(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.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1212, Sec. 1817; Pub. L.

92-328, title II, Sec. 204, June 30, 1972, 86 Stat. 397; Pub. L.

94-324, Sec. 7(18), (19), June 30, 1976, 90 Stat. 722; Pub. L.

97-72, title III, Sec. 303(f), Nov. 3, 1981, 95 Stat. 1060; Pub. L.

100-198, Sec. 10(a)(2), Dec. 21, 1987, 101 Stat. 1323; renumbered

Sec. 1813 and amended Pub. L. 100-322, title IV, Sec. 415(b)(2),

May 20, 1988, 102 Stat. 550; Pub. L. 101-237, title III, Sec.

313(b)(1), Dec. 18, 1989, 103 Stat. 2077; Pub. L. 102-40, title IV,

Sec. 402(d)(1), May 7, 1991, 105 Stat. 239; renumbered Sec. 3713

and amended Pub. L. 102-83, Sec. 5(a), (c)(1), Aug. 6, 1991, 105

Stat. 406; Pub. L. 103-446, title XII, Sec. 1201(e)(15), Nov. 2,

1994, 108 Stat. 4686.)

-MISC1-

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".

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1813 of this

title as this section.

Subsec. (a). Pub. L. 102-83, Sec. 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.

1988 - Pub. L. 100-322, Sec. 415(b)(2)(B), renumbered section

1817 of this title as this section.

Subsec. (a). Pub. L. 100-322, Sec. 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, Sec. 303(f)(1), substituted

"direct housing loan" for "direct loan".

Subsec. (b). Pub. L. 97-72, Sec. 303(f)(2), substituted "or

direct housing loan obtained" for "or direct loan obtained".

1976 - Subsec. (a). Pub. L. 94-324, Sec. 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, Sec. 7(19), substituted "obtained by

the veteran" for "obtained by him", "the Administrator determines"

for "he determines", and "the Administrator deems" for "he deems".

1972 - Pub. 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

Section 301(c) of Pub. L. 92-328 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]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3726 of this title.

-End-

-CITE-

38 USC Sec. 3714 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER II - LOANS

-HEAD-

Sec. 3714. Assumptions; release from liability

-STATUTE-

(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.

-SOURCE-

(Added Pub. L. 100-198, Sec. 10(a)(1), Dec. 21, 1987, 101 Stat.

1321, Sec. 1817A; renumbered Sec. 1814, Pub. L. 100-322, title IV,

Sec. 415(b)(2)(B), May 20, 1988, 102 Stat. 551; amended Pub. L.

100-689, title III, Sec. 302, Nov. 18, 1988, 102 Stat. 4176; Pub.

L. 101-237, title III, Sec. 313(b)(1), Dec. 18, 1989, 103 Stat.

2077; renumbered Sec. 3714 and amended Pub. L. 102-83, Secs.

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, Sec. 1005(b)(10), Nov. 11,

1998, 112 Stat. 3365; Pub. L. 107-103, title IV, Sec. 403, Dec. 27,

2001, 115 Stat. 993.)

-MISC1-

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 1/2 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".

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1814 of this

title as this section.

Subsec. (a)(1)(B)(ii). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3710" for "1810".

Subsec. (a)(2). Pub. L. 102-83, Sec. 5(c)(1), substituted "3702"

for "1802".

Subsec. (a)(4)(B)(ii)(I). Pub. L. 102-83, Sec. 4(a)(3), (4),

substituted "Department" for "Veterans' Administration".

Subsec. (d). Pub. L. 102-83, Sec. 4(a)(2)(B)(iv), substituted

"Department of Veterans Affairs" for "Veterans' Administration".

Subsec. (f)(1)(A). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3733(a)(1)" for "1833(a)(1)".

1989 - Subsecs. (a), (c) to (f). Pub. L. 101-237, Sec. 313(b)(1),

substituted "Secretary" for "Administrator" wherever appearing.

1988 - Pub. L. 100-322, Sec. 415(b)(2)(B), renumbered section

1817A of this title as this section.

Subsec. (a)(1). Pub. L. 100-689, Sec. 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, Sec. 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."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3704, 3729 of this title.

-End-

-CITE-

38 USC Secs. 3715 to 3719 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER II - LOANS

-HEAD-

[Secs. 3715 to 3719. Vacant]

-COD-

CODIFICATION

Prior to renumbering of sections 1801 to 1851 of this chapter as

sections 3701 to 3751 by Pub. L. 102-83, Sec. 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, Sec. 5(a), Mar. 3, 1966, 80

Stat. 25; amended Pub. L. 91-506, Sec. 2(e), Oct. 23, 1970, 84

Stat. 1108; Pub. L. 93-569, Sec. 8(6), (7), Dec. 31, 1974, 88 Stat.

1866, 1867; Pub. L. 94-324, Sec. 4, June 30, 1976, 90 Stat. 720;

Pub. L. 95-476, title I, Sec. 106(a), Oct. 18, 1978, 92 Stat. 1499;

Pub. L. 97-72, title III, Sec. 303(g), Nov. 3, 1981, 95 Stat. 1060;

Pub. L. 97-295, Sec. 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,

Sec. 415(b)(3), May 20, 1988, 102 Stat. 551.

Section 1819 was renumbered section 1812 of this title.

-End-

-CITE-

38 USC SUBCHAPTER III - ADMINISTRATIVE PROVISIONS 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in section 113 of this title;

title 2 section 905.

-End-

-CITE-

38 USC Sec. 3720 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3720. Powers of Secretary

-STATUTE-

(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 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.

(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, Sec. 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)(1) 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.

(2) The Secretary may not under this subsection guarantee the

payment of principal and interest on certificates or other

securities issued or approved after December 31, 2011.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1213, Sec. 1820; Pub. L.

88-151, Sec. 1, Oct. 17, 1963, 77 Stat. 271; Pub. L. 88-560, title

VII, Sec. 701(e)(1), Sept. 2, 1964, 78 Stat. 800; Pub. L. 89-625,

Oct. 4, 1966, 80 Stat. 874; Pub. L. 89-769, Sec. 3(c), Nov. 6,

1966, 80 Stat. 1316; Pub. L. 90-448, title VIII, Sec. 807(h), Aug.

1, 1968, 82 Stat. 545; Pub. L. 91-606, title II, Sec. 233, Dec. 31,

1970, 84 Stat. 1753; Pub. L. 92-328, title II, Sec. 205, June 30,

1972, 86 Stat. 397; Pub. L. 93-288, title VII, Sec. 702(l),

formerly title VI, Sec. 602(l), May 22, 1974, 88 Stat. 164,

renumbered title VII, Sec. 702(l), Pub. L. 103-337, div. C, title

XXXIV, Sec. 3411(a)(1), (2), Oct. 5, 1994, 108 Stat. 3100; Pub. L.

94-324, Sec. 7(24)-(26), June 30, 1976, 90 Stat. 722; Pub. L.

95-117, title IV, Sec. 403(a), Oct. 3, 1977, 91 Stat. 1066; Pub. L.

97-258, Sec. 3(k)(3), Sept. 13, 1982, 96 Stat. 1065; Pub. L.

97-295, Sec. 4(67), Oct. 12, 1982, 96 Stat. 1310; Pub. L. 98-160,

title VII, Sec. 702(14), Nov. 21, 1983, 97 Stat. 1009; Pub. L.

99-576, title IV, Sec. 404, Oct. 28, 1986, 100 Stat. 3281; Pub. L.

100-707, title I, Sec. 109(n), Nov. 23, 1988, 102 Stat. 4709; Pub.

L. 101-237, title III, Sec. 313(b)(1), (2), Dec. 18, 1989, 103

Stat. 2077; Pub. L. 102-54, Sec. 4(a), June 13, 1991, 105 Stat.

268; renumbered Sec. 3720 and amended Pub. L. 102-83, Sec. 5(a),

(c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 102-291, Sec. 5(a),

May 20, 1992, 106 Stat. 179; Pub. L. 102-547, Sec. 4, Oct. 28,

1992, 106 Stat. 3636; Pub. L. 104-110, title I, Sec. 101(f), Feb.

13, 1996, 110 Stat. 768; Pub. L. 104-275, title II, Sec. 201, Oct.

9, 1996, 110 Stat. 3330; Pub. L. 105-33, title VIII, Sec. 8011,

Aug. 5, 1997, 111 Stat. 664; Pub. L. 105-368, title VI, Secs.

602(c)(1), 604(a), Nov. 11, 1998, 112 Stat. 3346, 3348; Pub. L.

106-419, title IV, Sec. 402(a), Nov. 1, 2000, 114 Stat. 1861; Pub.

L. 107-103, title IV, Sec. 405(b), Dec. 27, 2001, 115 Stat. 994.)

-REFTEXT-

REFERENCES IN TEXT

The Federal Property and Administrative Services Act of 1949,

referred to in subsec. (b), is act June 30, 1949, ch. 288, 63 Stat.

377, as amended. Title III of the Act is classified generally to

subchapter IV (Sec. 251 et seq.) of chapter 4 of Title 41, Public

Contracts. For complete classification of this Act to the Code, see

Tables.

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 (Sec. 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.

-MISC1-

AMENDMENTS

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, Sec. 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, Sec. 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).

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1820 of this

title as this section.

Subsec. (e)(2). Pub. L. 102-83, Sec. 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, Sec. 7(24), substituted

"the Administrator's" for "his".

Subsec. (a)(5). Pub. L. 94-324, Sec. 7(24), substituted "the

Administrator" for "he".

Subsec. (a)(6). Pub. L. 94-324, Sec. 7(25), substituted "utilized

by the Administrator" for "utilized by him".

Subsec. (e)(1). Pub. L. 94-324, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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

Section 403(b) of Pub. L. 95-117 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, 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, Sec. 9, Dec. 21, 1987, 101 Stat. 1320, as

amended by Pub. L. 102-40, title IV, Sec. 402(d)(2), May 7, 1991,

105 Stat. 239; Pub. L. 102-83, Sec. 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, Sec. 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

Section 2 of Pub. L. 88-151 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.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3722, 5701 of this title;

title 28 section 2410.

-End-

-CITE-

38 USC Sec. 3721 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3721. Incontestability

-STATUTE-

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.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1213, Sec. 1821; Pub. L.

101-237, title III, Sec. 313(b)(1), Dec. 18, 1989, 103 Stat. 2077;

renumbered Sec. 3721, Pub. L. 102-83, Sec. 5(a), Aug. 6, 1991, 105

Stat. 406.)

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83 renumbered section 1821 of this title as

this section.

1989 - Pub. L. 101-237 substituted "Secretary" for

"Administrator" wherever appearing.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3712 of this title.

-End-

-CITE-

38 USC Sec. 3722 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3722. Veterans Housing Benefit Program Fund

-STATUTE-

(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.

-SOURCE-

(Added Pub. L. 105-368, title VI, Sec. 602(a)(2), Nov. 11, 1998,

112 Stat. 3345; amended Pub. L. 107-14, Sec. 8(a)(16), June 5,

2001, 115 Stat. 35.)

-REFTEXT-

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, Sec. 13201(a), Nov. 5, 1990, 104 Stat. 1388-609, which

is classified generally to subchapter III (Sec. 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.

-MISC1-

PRIOR PROVISIONS

Prior to renumbering of sections 1801 to 1851 of this chapter as

sections 3701 to 3751 by Pub. L. 102-83, Sec. 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, Sec. 5(c), Mar. 3, 1966, 88

Stat. 26; Pub. L. 89-623, Sec. 1, Oct. 4, 1966, 80 Stat. 873; Pub.

L. 90-301, Sec. 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, Secs. 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, Sec. 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)."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2106, 3727, 3733 of this

title.

-End-

-CITE-

38 USC Secs. 3723 to 3725 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

[Secs. 3723 to 3725. Repealed. Pub. L. 105-368, title VI, Sec.

602(a)(1), Nov. 11, 1998, 112 Stat. 3345]

-MISC1-

Section 3723, Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1214, Sec.

1823; Pub. L. 86-73, Sec. 4, June 30, 1959, 73 Stat. 156; Pub. L.

86-665, Sec. 4, July 14, 1960, 74 Stat. 532; Pub. L. 87-84, Sec. 3,

July 6, 1961, 75 Stat. 202; Pub. L. 88-274, Feb. 29, 1964, 78 Stat.

147; Pub. L. 88-560, title VII, Sec. 701(e)(2), Sept. 2, 1964, 78

Stat. 801; Pub. L. 94-324, Secs. 6, 7(27), June 30, 1976, 90 Stat.

721, 722; Pub. L. 97-295, Sec. 4(68), Oct. 12, 1982, 96 Stat. 1310;

Pub. L. 97-452, Sec. 2(e)(2), Jan. 12, 1983, 96 Stat. 2479; Pub. L.

99-576, title IV, Sec. 405, Oct. 28, 1986, 100 Stat. 3281; Pub. L.

101-237, title III, Sec. 313(b)(1), (8), (9), Dec. 18, 1989, 103

Stat. 2077, 2078; renumbered Sec. 3723 and amended Pub. L. 102-83,

Sec. 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, Sec. 7(a), July 14, 1960, 74

Stat. 532, Sec. 1824; amended Pub. L. 94-324, Sec. 7(28), June 30,

1976, 90 Stat. 722; Pub. L. 97-72, title III, Sec. 303(j), Nov. 3,

1981, 95 Stat. 1060; Pub. L. 98-369, div. B, title V, Sec. 2511(b),

July 18, 1984, 98 Stat. 1117; Pub. L. 99-322, Sec. 2(a), May 23,

1986, 100 Stat. 494; Pub. L. 100-689, title III, Sec. 303, Nov. 18,

1988, 102 Stat. 4177; Pub. L. 101-237, title III, Secs. 302(a)(2),

(3)(A), (c), 313(b)(1), (2), Dec. 18, 1989, 103 Stat. 2070, 2071,

2077; renumbered Sec. 3724 and amended Pub. L. 102-83, Sec. 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, Sec.

1824; renumbered Sec. 1825, Pub. L. 86-665, Sec. 7(a), July 14,

1960, 74 Stat. 532; amended Pub. L. 94-324, Sec. 7(29), June 30,

1976, 90 Stat. 722; Pub. L. 101-237, title III, Sec. 302(a)(1),

Dec. 18, 1989, 103 Stat. 2069; Pub. L. 102-54, Sec. 15(a)(2), June

13, 1991, 105 Stat. 289; renumbered Sec. 3725 and amended Pub. L.

102-83, Sec. 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L.

102-547, Sec. 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.

-End-

-CITE-

38 USC Sec. 3726 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3726. Withholding of payments, benefits, etc.

-STATUTE-

(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.

-SOURCE-

(Added Pub. L. 89-358, Sec. 5(f)(1), Mar. 3, 1966, 80 Stat. 26,

Sec. 1826; amended Pub. L. 94-324, Sec. 7(30), June 30, 1976, 90

Stat. 722; Pub. L. 97-66, title V, Sec. 504, Oct. 17, 1981, 95

Stat. 1033; Pub. L. 101-237, title III, Sec. 313(b)(1), (2), Dec.

18, 1989, 103 Stat. 2077; renumbered Sec. 3726, Pub. L. 102-83,

Sec. 5(a), Aug. 6, 1991, 105 Stat. 406; Pub. L. 105-33, title VIII,

Sec. 8033(a), Aug. 5, 1997, 111 Stat. 669.)

-MISC1-

AMENDMENTS

1997 - Pub. 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).

1991 - Pub. L. 102-83 renumbered section 1826 of this title as

this section.

1989 - Pub. L. 101-237 substituted "Secretary" and "Department of

Veterans Affairs" for "Administrator" and "Veterans'

Administration", respectively.

1981 - Pub. 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

Section 8033(c) of Pub. L. 105-33 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.

-End-

-CITE-

38 USC Sec. 3727 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3727. Expenditures to correct or compensate for structural

defects in mortgaged homes

-STATUTE-

(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.

-SOURCE-

(Added Pub. L. 90-301, Sec. 5(a), May 7, 1968, 82 Stat. 116, Sec.

1827; amended Pub. L. 94-324, Sec. 7(31), June 30, 1976, 90 Stat.

722; Pub. L. 101-237, title III, Sec. 313(b)(1), (2), Dec. 18,

1989, 103 Stat. 2077; renumbered Sec. 3727 and amended Pub. L.

102-83, Sec. 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L.

105-368, title VI, Sec. 602(e)(1)(C), title X, Sec. 1005(b)(11),

Nov. 11, 1998, 112 Stat. 3346, 3365.)

-MISC1-

AMENDMENTS

1998 - Subsec. (a). Pub. L. 105-368, Sec. 1005(b)(11),

substituted "May 7, 1968" for "the date of enactment of this

section".

Subsec. (c). Pub. L. 105-368, Sec. 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".

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1827 of this

title as this section.

Subsec. (c). Pub. L. 102-83, Sec. 5(c)(1), substituted "3723 and

3724" for "1823 and 1824".

1989 - Pub. 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.

-End-

-CITE-

38 USC Sec. 3728 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3728. Exemption from State anti-usury provisions

-STATUTE-

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.

-SOURCE-

(Added Pub. L. 96-128, title IV, Sec. 401(a), Nov. 28, 1979, 93

Stat. 986, Sec. 1828; amended Pub. L. 97-66, title V, Sec. 501(b),

Oct. 17, 1981, 95 Stat. 1032; renumbered Sec. 3728, Pub. L. 102-83,

Sec. 5(a), Aug. 6, 1991, 105 Stat. 406.)

-REFTEXT-

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 (Sec. 1702 et seq.)

and II (Sec. 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.

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83 renumbered section 1828 of this title as

this section.

1981 - Pub. 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.

-End-

-CITE-

38 USC Sec. 3729 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3729. Loan fee

-STATUTE-

(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 loan Active duty Reservist Other

veteran obligor

--------------------------------------------------------------------

(A)(i) Initial loan 2.00 2.75 NA

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

October 1, 2011)

(A)(ii) Initial loan 1.25 2.00 NA

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, 2011)

(B)(i) Subsequent loan 3.00 3.00 NA

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 October 1,

2011)

(B)(ii) Subsequent loan 1.25 2.00 NA

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

October 1, 2011)

(C)(i) Loan described in 1.50 2.25 NA

section 3710(a) to

purchase or construct a

dwelling with 5-down

(closed before October 1,

2011)

(C)(ii) Loan described in 0.75 1.50 NA

section 3710(a) to

purchase or construct a

dwelling with 5-down

(closed on or after

October 1, 2011)

(D)(i) Initial loan 1.25 2.00 NA

described in section

3710(a) to purchase or

construct a dwelling with

10-down (closed before

October 1, 2011)

(D)(ii) Initial loan 0.50 1.25 NA

described in section

3710(a) to purchase or

construct a dwelling with

10-down (closed on or

after October 1, 2011)

(E) Interest rate 0.50 0.50 NA

reduction refinancing loan

(F) Direct loan under 1.00 1.00 NA

section 3711

(G) Manufactured home 1.00 1.00 NA

loan under section 3712

(other than an interest

rate reduction

refinancing loan)

(H) Loan to Native 1.25 1.25 NA

American veteran under

section 3762 (other than

an interest rate

reduction refinancing

loan)

(I) Loan assumption under 0.50 0.50 0.50

section 3714

(J) Loan under section 2.25 2.25 2.25

3733(a)

--------------------------------------------------------------------

(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. - 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.

-SOURCE-

(Added Pub. L. 97-253, title IV, Sec. 406(a)(1), Sept. 8, 1982, 96

Stat. 805, Sec. 1829; amended Pub. L. 98-369, div. B, title V, Sec.

2511(a), July 18, 1984, 98 Stat. 1117; Pub. L. 100-198, Secs. 2,

10(c), Dec. 21, 1987, 101 Stat. 1315, 1323; Pub. L. 100-203, title

VII, Sec. 7002, Dec. 22, 1987, 101 Stat. 1330-279; Pub. L. 100-322,

title IV, Sec. 415(c)(6), May 20, 1988, 102 Stat. 551; Pub. L.

101-237, title III, Secs. 303(a), 313(b)(1), Dec. 18, 1989, 103

Stat. 2071, 2077; Pub. L. 101-239, title V, Sec. 5001, Dec. 19,

1989, 103 Stat. 2136; Pub. L. 101-508, title VIII, Sec. 8032, Nov.

5, 1990, 104 Stat. 1388-348; Pub. L. 102-54, Sec. 15(a)(3), (4),

June 13, 1991, 105 Stat. 289; renumbered Sec. 3729 and amended Pub.

L. 102-83, Sec. 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L.

102-547, Secs. 2(b)(1), 5, Oct. 28, 1992, 106 Stat. 3633, 3636;

Pub. L. 103-66, title XII, Sec. 12007, Aug. 10, 1993, 107 Stat.

414; Pub. L. 103-446, title IX, Sec. 904(c), Nov. 2, 1994, 108

Stat. 4677; Pub. L. 104-275, title II, Sec. 202(b), Oct. 9, 1996,

110 Stat. 3330; Pub. L. 105-33, title VIII, Secs. 8012, 8032, Aug.

5, 1997, 111 Stat. 664, 669; Pub. L. 105-368, title VI, Secs.

602(e)(1)(D), 603(b), Nov. 11, 1998, 112 Stat. 3346, 3348; Pub. L.

106-419, title IV, Sec. 402(b), Nov. 1, 2000, 114 Stat. 1861; Pub.

L. 107-14, Sec. 8(b)(4), June 5, 2001, 115 Stat. 36; Pub. L.

107-103, title IV, Secs. 405(c), 406, Dec. 27, 2001, 115 Stat.

994.)

-MISC1-

AMENDMENTS

Pub. L. 107-14 made technical amendment to Pub. L. 106-419. See

2000 Amendment note below.

Subsec. (b)(2). Pub. L. 107-103, Sec. 405(c), substituted

"October 1, 2011" for "October 1, 2008" wherever appearing in

table.

Subsec. (b)(4)(B). Pub. L. 107-103, Sec. 406, inserted "who is

eligible under section 3702(a)(2)(E) of this title" before period.

2000 - Pub. 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, Sec. 602(e)(1)(D)(ii),

substituted "(c)" for "(c)(1)".

Subsec. (a)(4). Pub. L. 105-368, Sec. 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, Sec. 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, Sec. 8032(1)(A), struck

out "or 3733(a)" after "section 3711".

Subsec. (a)(2)(F). Pub. L. 105-33, Sec. 8032(1)(B)-(D), added

subpar. (F).

Subsec. (a)(4). Pub. L. 105-33, Secs. 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, Sec. 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, Sec. 12007(c), substituted

"paragraphs (4) and (5)" for "paragraph (6)" in introductory

provisions.

Subsecs. (a)(4) to (6). Pub. L. 103-66, Sec. 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, Sec. 5(1), inserted

"(other than section 3712(a)(1)(F))" after "section 3712".

Subsec. (a)(2)(D). Pub. L. 102-547, Sec. 2(b)(1), added subpar.

(D).

Subsec. (a)(2)(E). Pub. L. 102-547, Sec. 5(2), added subpar. (E).

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1829 of this

title as this section.

Subsec. (a)(1). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3733(a)" for "1833(a)".

Subsec. (a)(2). Pub. L. 102-83, Sec. 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, Sec. 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, Sec. 5(c)(1), substituted "3714" for

"1814".

Subsec. (c)(2). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3725(c)" for "1825(c)".

Pub. L. 102-54, Sec. 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, Sec. 8032(1), substituted

"Except as provided in paragraph (6) of this subsection, the

amount" for "The amount".

Subsec. (a)(6). Pub. L. 101-508, Sec. 8032(2), added par. (6).

1989 - Pub. L. 101-237, Sec. 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, Sec. 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, Sec. 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, Sec. 2(a), and Pub. L. 100-203,

amended subsec. identically, substituting "September 30, 1989" for

"September 30, 1987".

Subsec. (d). Pub. L. 100-198, Sec. 10(c), added subsec. (d).

1984 - Subsec. (a). Pub. L. 98-369, Sec. 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, Sec. 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 2001 AMENDMENT

Pub. L. 107-14, Sec. 8(b), June 5, 2001, 115 Stat. 34, 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

Section 303(b) of Pub. L. 101-237 provided that: "The amendments

made by this section [amending this section] shall take effect on

January 1, 1990."

EFFECTIVE DATE OF 1984 AMENDMENT

Section 2511(c) of Pub. L. 98-369 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

Section 406(b) of Pub. L. 97-253, as amended by Pub. L. 102-83,

Sec. 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."

FEE FOR LOAN ASSUMPTION

Pub. L. 107-330, title III, Sec. 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

Section 15(b) of Pub. L. 102-54, as amended by Pub. L. 102-83,

Sec. 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

Section 303(c) of Pub. L. 101-237 directed Secretary of Veterans

Affairs to collect fees under this section through Dec. 31, 1989.

Pub. L. 101-110, Sec. 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, Sec. 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, Sec. 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."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2041, 3703, 3722, 3734 of

this title.

-End-

-CITE-

38 USC Sec. 3730 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3730. Use of attorneys in court

-STATUTE-

(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.

-SOURCE-

(Added Pub. L. 98-369, div. B, title V, Sec. 2512(b)(1), July 18,

1984, 98 Stat. 1120, Sec. 1830; amended Pub. L. 99-576, title IV,

Sec. 406, Oct. 28, 1986, 100 Stat. 3282; Pub. L. 101-237, title

III, Sec. 313(b)(1), (2), Dec. 18, 1989, 103 Stat. 2077; renumbered

Sec. 3730, Pub. L. 102-83, Sec. 5(a), Aug. 6, 1991, 105 Stat. 406;

Pub. L. 105-368, title X, Sec. 1005(b)(12), Nov. 11, 1998, 112

Stat. 3365.)

-MISC1-

AMENDMENTS

1998 - Subsec. (a). Pub. L. 105-368 substituted "The Secretary

shall" for "Within 180 days after the date of the enactment of this

section, the Secretary shall take appropriate steps to".

1991 - Pub. L. 102-83 renumbered section 1830 of this title as

this section.

1989 - Subsec. (a). Pub. L. 101-237 substituted "Secretary" and

"Department of Veterans Affairs" for "Administrator" and "Veterans'

Administration", respectively, wherever appearing.

1986 - Subsec. (a). Pub. L. 99-576 substituted "The" for "With

the concurrence of the Attorney General of the United States, the"

in second sentence.

EFFECTIVE DATE

Section 2512(c)(3) of Pub. L. 98-369 provided that: "The

amendments made by subsection (b) [enacting this section] shall

take effect on the date of the enactment of this Act [July 18,

1984]."

-End-

-CITE-

38 USC Sec. 3731 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3731. Appraisals

-STATUTE-

(a) The Secretary shall -

(1) subject to subsection (b)(2) and in consultation with

appropriate representatives of institutions which are regularly

engaged in making housing loans, prescribe uniform qualifications

for appraisers, including the successful completion of a written

test, submission of a sample appraisal, certification of an

appropriate number of years of experience as an appraiser, and

submission of recommendations from other appraisers;

(2) use such qualifications in determining whether to approve

an appraiser to make appraisals of the reasonable value of any

property, construction, repairs, or alterations for the purposes

of this chapter; and

(3) in consultation with local representatives of institutions

described in clause (1) of this subsection, develop and maintain

lists of appraisers who are approved under clause (2) of this

subsection to make appraisals for the purposes of this chapter.

(b)(1) The Secretary shall select appraisers from a list required

by subsection (a)(3) of this section on a rotating basis to make

appraisals for the purposes of this chapter.

(2) If uniform qualifications become applicable for appraisers

who perform appraisals for or in connection with the Federal

Government, the qualifications required by subsection (a)(1) of

this section may be more stringent than such uniform

qualifications, but the Secretary may use no written test in

determining the qualifications of appraisers other than the test

prescribed to implement such uniform qualifications.

(c) Except as provided in subsection (f) of this section, the

appraiser shall forward an appraisal report to the Secretary for

review. Upon receipt of such report, the Secretary shall determine

the reasonable value of the property, construction, repairs, or

alterations for purposes of this chapter, and notify the veteran of

such determination. Upon request, the Secretary shall furnish a

copy of the appraisal made of property for the purposes of this

chapter to the lender proposing to make the loan which is to be

secured by such property and is to be guaranteed under this

chapter.

(d) If a lender (other than a lender authorized under subsection

(f) of this section to determine reasonable value) -

(1) has proposed to make a loan to be guaranteed under this

chapter,

(2) has been furnished a certificate of reasonable value of any

property or of any construction, repairs, or alterations of

property which is to be the security for such loan, and

(3) within a reasonable period prescribed by the Secretary, has

furnished to the Secretary an additional appraisal of the

reasonable value of such property, construction, repairs, or

alterations which was made by an appraiser selected by the lender

from the list required by subsection (a)(3) of this section,

the Secretary shall consider both the initial appraisal and the

additional appraisal and shall, if appropriate, issue a revised

certificate of reasonable value of such property, construction,

repairs, or alterations.

(e)(1) In no case may a veteran be required to pay all or any

portion of the cost of the additional appraisal described in

subsection (d)(3) of this section.

(2) If a veteran, within a reasonable period prescribed by the

Secretary, has furnished to the Secretary an additional appraisal

of the reasonable value of such property, construction, repairs, or

alterations which was made by an appraiser selected by the veteran

from the list required by subsection (a)(3) of this section, the

Secretary shall consider such appraisal, along with other

appraisals furnished to the Secretary, and shall, if appropriate,

issue a revised certificate of reasonable value of such property,

construction, repairs, or alterations.

(f)(1) Subject to the provisions of paragraphs (2) and (3) of

this subsection, the Secretary may, in accordance with standards

and procedures established in regulations prescribed by the

Secretary, authorize a lender to determine the reasonable value of

property for the purposes of this chapter if the lender is

authorized to make loans which are automatically guaranteed under

section 3702(d) of this title. In such a case, the appraiser

selected by the Secretary pursuant to subsection (b) of this

section shall submit the appraisal report directly to the lender

for review, and the lender shall, as soon as possible thereafter,

furnish a copy of the appraisal to the veteran who is applying for

the loan concerned and to the Secretary.

(2) In exercising the authority provided in paragraph (1) of this

subsection, the Secretary shall assign a sufficient number of

personnel to carry out an appraisal-review system to monitor, on at

least a random-sampling basis, the making of appraisals by

appraisers and the effectiveness and the efficiency of the

determination of reasonable value of property by lenders.

[(3) Repealed. Pub. L. 104-110, title I, Sec. 101(g), Feb. 13,

1996, 110 Stat. 768.]

(4) Not later than April 30 of each year following a year in

which the Secretary authorizes lenders to determine reasonable

value of property under this subsection, the Secretary shall submit

to the Committees on Veterans' Affairs of the Senate and the House

of Representatives a report relating to the exercise of that

authority during the year in which the authority was exercised.

(5) A report submitted pursuant to paragraph (4) of this

subsection shall include, for the period covered by each report -

(A) the number and value of loans made by lenders exercising

the authority of this subsection;

(B) the number and value of such loans reviewed by the

appraisal-review monitors referred to in paragraph (2) of this

subsection;

(C) the number and value of loans made under this subsection of

which the Secretary received notification of default;

(D) the amount of guaranty paid by the Secretary to such

lenders by reason of defaults on loans as to which reasonable

value was determined under this subsection; and

(E) such recommendations as the Secretary considers appropriate

to improve the exercise of the authority provided for in this

subsection and to protect the interests of the United States.

-SOURCE-

(Added Pub. L. 99-576, title IV, Sec. 407(a), Oct. 28, 1986, 100

Stat. 3282, Sec. 1831; amended Pub. L. 100-198, Sec. 11(a), (b),

Dec. 21, 1987, 101 Stat. 1324; Pub. L. 101-237, title III, Sec.

313(b)(1), Dec. 18, 1989, 103 Stat. 2077; Pub. L. 102-54, Sec.

3(b), (c), June 13, 1991, 105 Stat. 267; renumbered Sec. 3731 and

amended Pub. L. 102-83, Sec. 5(a), (c)(1), Aug. 6, 1991, 105 Stat.

406; Pub. L. 102-547, Sec. 7, Oct. 28, 1992, 106 Stat. 3636; Pub.

L. 104-110, title I, Sec. 101(g), Feb. 13, 1996, 110 Stat. 768.)

-COD-

CODIFICATION

Another section 11(b) of Pub. L. 100-198 amended section 1810

[now 3710] of this title.

-MISC1-

AMENDMENTS

1996 - Subsec. (f)(3). Pub. L. 104-110 struck out par. (3) which

read as follows: "The authority provided in this subsection shall

terminate on December 31, 1995."

1992 - Subsec. (f)(3). Pub. L. 102-547 substituted "1995" for

"1992".

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1831 of this

title as this section.

Subsec. (f)(1). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3702(d)" for "1802(d)".

Subsec. (f)(3). Pub. L. 102-54, Sec. 3(b), substituted "December

31, 1992" for "October 1, 1990".

Subsec. (f)(4), (5). Pub. L. 102-54, Sec. 3(c), added pars. (4)

and (5).

1989 - Pub. L. 101-237 substituted "Secretary" for

"Administrator" wherever appearing.

1987 - Subsec. (a)(1). Pub. L. 100-198, Sec. 11(a)(1), inserted

"subject to subsection (b)(2) and" at beginning and ", including

the successful completion of a written test, submission of a sample

appraisal, certification of an appropriate number of years of

experience as an appraiser, and submission of recommendations from

other appraisers" before semicolon at end.

Subsec. (b). Pub. L. 100-198, Sec. 11(a)(2), designated existing

provisions as par. (1) and added par. (2).

Subsec. (c). Pub. L. 100-198, Sec. 11(b)(1), substituted "Except

as provided in subsection (f) of this section, the appraiser shall

forward an appraisal report to the Administrator for review. Upon

receipt of such report, the Administrator shall determine the

reasonable value of the property, construction, repairs, or

alterations for purposes of this chapter, and notify the veteran of

such determination. Upon request, the Administrator shall" for "The

Administrator shall, upon request,".

Subsec. (d). Pub. L. 100-198, Sec. 11(b)(2), which directed

insertion of "(other than a lender authorized under subsection (f)

of this section to determine reasonable value)" after "lender" was

executed by making the insertion after "lender" the first place it

appears in subsec. (d), as the probable intent of Congress,

notwithstanding appearance of "lender" in subsec. (d)(3).

Subsec. (f). Pub. L. 100-198, Sec. 11(b)(3), added subsec. (f).

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.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3710, 3736, 3762 of this

title.

-End-

-CITE-

38 USC Sec. 3732 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3732. Procedure on default

-STATUTE-

(a)(1) In the event of default in the payment of any loan

guaranteed under this chapter, the holder of the obligation shall

notify the Secretary of such default. Upon receipt of such notice,

the Secretary may, subject to subsection (c) of this section, pay

to such holder the guaranty not in excess of the pro rata portion

of the amount originally guaranteed. Except as provided in section

3703(e) of this title, if the Secretary makes such a payment, the

Secretary shall be subrogated to the rights of the holder of the

obligation to the extent of the amount paid on the guaranty.

(2) Before suit or foreclosure the holder of the obligation shall

notify the Secretary of the default, and within thirty days

thereafter the Secretary may, at the Secretary's option, pay the

holder of the obligation the unpaid balance of the obligation plus

accrued interest and receive an assignment of the loan and

security. Nothing in this section shall preclude any forebearance

for the benefit of the veteran as may be agreed upon by the parties

to the loan and approved by the Secretary.

(3) The Secretary may establish the date, not later than the date

of judgment and decree of foreclosure or sale, upon which accrual

of interest or charges shall cease.

(4)(A) Upon receiving a notice pursuant to paragraph (1) of this

subsection, the Secretary shall -

(i) provide the veteran with information and, to the extent

feasible, counseling regarding -

(I) alternatives to foreclosure, as appropriate in light of

the veteran's particular circumstances, including possible

methods of curing the default, conveyance of the property to

the Secretary by means of a deed in lieu of foreclosure, and

the actions authorized by paragraph (2) of this subsection; and

(II) what the Department of Veterans Affairs' and the

veteran's liabilities would be with respect to the loan in the

event of foreclosure; and

(ii) advise the veteran regarding the availability of such

counseling;

except with respect to loans made by a lender which the Secretary

has determined has a demonstrated record of consistently providing

timely and accurate information to veterans with respect to such

matters.

(B) The Secretary shall, to the extent of the availability of

appropriations, ensure that sufficient personnel are available to

administer subparagraph (A) of this paragraph effectively and

efficiently.

(5) In the event of default in the payment of any loan guaranteed

or insured under this chapter in which a partial payment has been

tendered by the veteran concerned and refused by the holder, the

holder of the obligation shall notify the Secretary as soon as such

payment has been refused. The Secretary may require that any such

notification include a statement of the circumstances of the

default, the amount tendered, the amount of the indebtedness on the

date of the tender, and the reasons for the holder's refusal.

(b) With respect to any loan made under section 3711 which has

not been sold as provided in subsection (g) of such section, if the

Secretary finds, after there has been a default in the payment of

any installment of principal or interest owing on such loan, that

the default was due to the fact that the veteran who is obligated

under the loan has become unemployed as the result of the closing

(in whole or in part) of a Federal installation, the Secretary

shall (1) extend the time for curing the default to such time as

the Secretary determines is necessary and desirable to enable such

veteran to complete payments on such loan, including an extension

of time beyond the stated maturity thereof, or (2) modify the terms

of such loan for the purpose of changing the amortization

provisions thereof by recasting, over the remaining term of the

loan, or over such longer period as the Secretary may determine,

the total unpaid amount then due with the modification to become

effective currently or upon the termination of an agreed-upon

extension of the period for curing the default.

(c)(1) For purposes of this subsection -

(A) The term "defaulted loan" means a loan that is guaranteed

under this chapter, that was made for a purpose described in

section 3710(a) of this title, and that is in default.

(B) The term "liquidation sale" means a judicial sale or other

disposition of real property to liquidate a defaulted loan that

is secured by such property.

(C) The term "net value", with respect to real property, means

the amount equal to (i) the fair market value of the property,

minus (ii) the total of the amounts which the Secretary estimates

the Secretary would incur (if the Secretary were to acquire and

dispose of the property) for property taxes, assessments, liens,

property maintenance, property improvement, administration,

resale (including losses sustained on the resale of the

property), and other costs resulting from the acquisition and

disposition of the property, excluding any amount attributed to

the cost to the Government of borrowing funds.

(D) Except as provided in subparagraph (D) of paragraph (10) of

this subsection, the term "total indebtedness", with respect to a

defaulted loan, means the amount equal to the total of (i) the

unpaid principal of the loan, (ii) the interest on the loan as of

the date applicable under paragraph (10) of this subsection, and

(iii) such reasonably necessary and proper charges (as specified

in the loan instrument and permitted by regulations prescribed by

the Secretary to implement this subsection) associated with

liquidation of the loan, including advances for taxes, insurance,

and maintenance or repair of the real property securing the loan.

(2)(A) Except as provided in subparagraph (B) of this paragraph,

this subsection applies to any case in which the holder of a

defaulted loan undertakes to liquidate the loan by means of a

liquidation sale.

(B) This subsection does not apply to a case in which the

Secretary proceeds under subsection (a)(2) of this section.

(3)(A) Before carrying out a liquidation sale of real property

securing a defaulted loan, the holder of the loan shall notify the

Secretary of the proposed sale. Such notice shall be provided in

accordance with regulations prescribed by the Secretary to

implement this subsection.

(B) After receiving a notice described in subparagraph (A) of

this paragraph, the Secretary shall determine the net value of the

property securing the loan and the amount of the total indebtedness

under the loan and shall notify the holder of the loan of the

determination of such net value.

(4) A case referred to in paragraphs (5), (6), and (7) of this

subsection as being described in this paragraph is a case in which

the net value of the property securing a defaulted loan exceeds the

amount of the total indebtedness under the loan minus the amount

guaranteed under this chapter.

(5) In a case described in paragraph (4) of this subsection, if

the holder of the defaulted loan acquires the property securing the

loan at a liquidation sale for an amount that does not exceed the

lesser of the net value of the property or the total indebtedness

under the loan -

(A) the holder shall have the option to convey the property to

the United States in return for payment by the Secretary of an

amount equal to the lesser of such net value or total

indebtedness; and

(B) the liability of the United States under the loan guaranty

under this chapter shall be limited to the amount of such total

indebtedness minus the net value of the property.

(6) In a case described in paragraph (4) of this subsection, if

the holder of the defaulted loan does not acquire the property

securing the loan at the liquidation sale, the liability of the

United States under the loan guaranty under this chapter shall be

limited to the amount equal to (A) the amount of such total

indebtedness, minus (B) the amount realized by the holder incident

to the sale or the net value of the property, whichever is greater.

(7) In a case described in paragraph (4) of this subsection, if

the holder of the defaulted loan acquires the property securing the

loan at the liquidation sale for an amount that exceeds the lesser

of the total indebtedness under the loan or the net value and -

(A)(i) the amount was the minimum amount for which, under

applicable State law, the property was permitted to be sold at

the liquidation sale, the holder shall have the option to convey

the property to the United States in return for payment by the

Secretary of an amount equal to the lesser of the amount for

which the holder acquired the property or the total indebtedness

under the loan; or

(ii) there was no minimum amount for which the property had to

be sold at the liquidation sale under applicable State law, the

holder shall have the option to convey the property to the United

States in return for payment by the Secretary of an amount equal

to the lesser of such net value or total indebtedness; and

(B) the liability of the United States under the loan guaranty

under this chapter is as provided in paragraph (6) of this

subsection.

(8) If the net value of the property securing a defaulted loan is

not greater than the amount of the total indebtedness under the

loan minus the amount guaranteed under this chapter -

(A) the Secretary may not accept conveyance of the property

from the holder of the loan; and

(B) the liability of the United States under the loan guaranty

shall be limited to the amount of the total indebtedness under

the loan minus the amount realized by the holder of the loan

incident to the sale at a liquidation sale of the property.

(9) In no event may the liability of the United States under a

guaranteed loan exceed the amount guaranteed with respect to that

loan under section 3703(b) of this title. All determinations under

this subsection of net value and total indebtedness shall be made

by the Secretary.

(10)(A) Except as provided in subparagraphs (B) and (C) of this

paragraph, the date referred to in paragraph (1)(D)(ii) of this

subsection shall be the date of the liquidation sale of the

property securing the loan (or such earlier date following the

expiration of a reasonable period of time for such sale to occur as

the Secretary may specify pursuant to regulations prescribed by the

Secretary to implement this subsection).

(B)(i) Subject to division (ii) of this subparagraph, in any case

in which there is a substantial delay in such sale caused by the

holder of the loan exercising forebearance at the request of the

Secretary, the date referred to in paragraph (1)(D)(ii) of this

subsection shall be such date, on or after the date on which

forebearance was requested and prior to the date of such sale, as

the Secretary specifies pursuant to regulations which the Secretary

shall prescribe to implement this paragraph.

(ii) The Secretary may specify a date under subdivision (i) of

this subparagraph only if, based on the use of a date so specified

for the purposes of such paragraph (1)(D)(ii), the Secretary is

authorized, under paragraph (5)(A) or (7)(A) of this subsection, to

accept conveyance of the property.

(C) In any case in which there is an excessive delay in such

liquidation sale caused -

(i) by the Department of Veterans Affairs (including any delay

caused by its failure to provide bidding instructions in a timely

fashion); or

(ii) by a voluntary case commenced under title 11, United

States Code (relating to bankruptcy);

the date referred to in paragraph (1)(D)(ii) of this subsection

shall be a date, earlier than the date of such liquidation sale,

which the Secretary specifies pursuant to regulations which the

Secretary shall prescribe to implement this paragraph.

(D) For the purpose of determining the liability of the United

States under a loan guaranty under clause (B) of paragraphs (5),

(6),(!1) (7), and (8) of this subsection, the amount of the total

indebtedness with respect to such loan guaranty shall include, in

any case in which there was an excessive delay caused by the

Department of Veterans Affairs in the liquidation sale of the

property securing such loan, any interest which had accrued as of

the date of such sale and which would not be included, except for

this subparagraph, in the calculation of such total indebtedness as

a result of the specification of an earlier date under subparagraph

(C)(i) of this paragraph.

(11) This subsection shall apply to loans closed before October

1, 2011.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1212, Sec. 1816(a)-(c);

Pub. L. 89-117, title I, Sec. 107(f), Aug. 10, 1965, 79 Stat. 460;

Pub. L. 94-324, Sec. 7(17), June 30, 1976, 90 Stat. 722; Pub. L.

98-369, div. B, title V, Sec. 2512(a), July 18, 1984, 98 Stat.

1117; Pub. L. 100-198, Secs. 4(a), 5(a), Dec. 21, 1987, 101 Stat.

1316; renumbered Sec. 1832 and amended Pub. L. 100-322, title IV,

Sec. 415(b)(1)(A)-(C), (5), May 20, 1988, 102 Stat. 550, 551; Pub.

L. 101-237, title III, Secs. 304(b), 307-308(b)(1), 313(b)(1), (2),

Dec. 18, 1989, 103 Stat. 2073-2075, 2077; Pub. L. 102-54, Secs. 1,

3(a), 14(g)(1), June 13, 1991, 105 Stat. 267, 288; renumbered Sec.

3732 and amended Pub. L. 102-83, Sec. 5(a), (c)(1), Aug. 6, 1991,

105 Stat. 406; Pub. L. 103-66, title XII, Sec. 12006(a), Aug. 10,

1993, 107 Stat. 414; Pub. L. 103-446, title IX, Sec. 907, Nov. 2,

1994, 108 Stat. 4677; Pub. L. 105-33, title VIII, Sec. 8013, Aug.

5, 1997, 111 Stat. 664; Pub. L. 106-419, title IV, Sec. 402(c),

Nov. 1, 2000, 114 Stat. 1863; Pub. L. 107-103, title IV, Sec.

405(d), Dec. 27, 2001, 115 Stat. 994.)

-MISC1-

AMENDMENTS

2001 - Subsec. (c)(11). Pub. L. 107-103 substituted "October 1,

2011" for "October 1, 2008".

2000 - Subsec. (c)(11). Pub. L. 106-419 substituted "October 1,

2008" for "October 1, 2002".

1997 - Subsec. (c)(11). Pub. L. 105-33 substituted "October 1,

2002" for "October 1, 1998".

1994 - Subsec. (c)(6). Pub. L. 103-446, Sec. 907(b), struck out

"either" after "defaulted loan", substituted "sale," for "sale or

acquires the property at such sale for an amount that exceeds the

lesser of the net value of the property or the total indebtedness

under the loan - ", struck out text of subpar. (A) and subpar. (B)

designation before "the liability", and redesignated cls. (i) and

(ii) as cls. (A) and (B), respectively. Prior to amendment, subpar.

(A) read as follows: "the Secretary may not accept conveyance of

the property except as provided in paragraph (7) of this

subsection; and".

Subsec. (c)(7). Pub. L. 103-446, Sec. 907(a)(1), struck out "that

was the minimum amount for which, under applicable State law, the

property was permitted to be sold at the liquidation sale - " after

"net value and" in introductory provisions.

Subsec. (c)(7)(A). Pub. L. 103-446, Sec. 907(a)(2), substituted

"(i) the amount was the minimum amount for which, under applicable

State law, the property was permitted to be sold at the liquidation

sale, the holder shall have the option to convey the property to

the United States in return for payment by the Secretary of an

amount equal to" for "the Secretary may accept conveyance of the

property to the United States for a price not exceeding" and "loan;

or" for "loan; and" and added cl. (ii).

Subsec. (c)(7)(B). Pub. L. 103-446, Sec. 907(a)(3), substituted

"paragraph (6)" for "paragraph (6)(B)".

1993 - Subsec. (c)(1)(C). Pub. L. 103-66, Sec. 12006(a)(1),

inserted "(including losses sustained on the resale of the

property)" after "resale".

Subsec. (c)(11). Pub. L. 103-66, Sec. 12006(a)(2), substituted

"shall apply to loans closed before October 1, 1998" for "shall

cease to have effect on December 31, 1992".

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1832 of this

title as this section.

Subsec. (a)(1). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3703(e)" for "1803(e)".

Subsec. (a)(4)(C). Pub. L. 102-54, Sec. 1, struck out subpar. (C)

which read as follows: "The authority to carry out this paragraph

shall terminate on March 1, 1991."

Subsec. (b). Pub. L. 102-83, Sec. 5(c)(1), substituted "3711" for

"1811".

Subsec. (c)(1)(A). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3710(a)" for "1810(a)".

Subsec. (c)(9). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3703(b)" for "1803(b)".

Subsec. (c)(11). Pub. L. 102-54, Sec. 3(a), substituted "December

31, 1992" for "October 1, 1991".

1989 - Subsec. (a). Pub. L. 101-237, Sec. 313(b)(1), (2),

substituted "Secretary", "Secretary's", and "Department of Veterans

Affairs' " for "Administrator", "Administrator's", and "Veterans'

Administration's", respectively, wherever appearing.

Pub. L. 101-237, Sec. 304(b), substituted "Except as provided in

section 1803(e) of this title, if" for "If" in last sentence of

par. (1).

Subsec. (a)(5). Pub. L. 101-237, Sec. 307, added par. (5).

Subsecs. (b), (c). Pub. L. 101-237, Sec. 313(b)(1), (2),

substituted "Secretary" and "Department of Veterans Affairs" for

"Administrator" and "Veterans' Administration", respectively,

wherever appearing.

Subsec. (c)(1)(C)(ii). Pub. L. 101-237, Sec. 308(a), inserted ",

excluding any amount attributed to the cost to the Government of

borrowing funds" before period at end.

Subsec. (c)(11). Pub. L. 101-237, Sec. 308(b)(1), substituted

"October 1, 1991" for "October 1, 1989".

1988 - Pub. L. 100-322, Sec. 415(b)(1)(C), (5)(A), redesignated

section catchline of section 1816 of this title as section

catchline of this section and struck out former catchline which

read as follows: "Furnishing information to real estate

professionals to facilitate the disposition of properties".

Subsec. (a). Pub. L. 100-322, Sec. 415(b)(1)(A), (C),

redesignated subsec. (a) of section 1816 of this title as subsec.

(a) of this section, and in par. (4)(A)(i)(I) substituted

"paragraph (2) of this subsection" for "section 1816(a)(2) of this

title".

Subsec. (b). Pub. L. 100-322, Sec. 415(b)(1)(C), redesignated

subsec. (b) of section 1816 of this title as subsec. (b) of this

section.

Subsec. (c). Pub. L. 100-322, Sec. 415(b)(1)(B), (C),

redesignated subsec. (c) of section 1816 of this title as subsec.

(c) of this section, in par. (10)(A) inserted "(or such earlier

date following the expiration of a reasonable period of time for

such sale to occur as the Administrator may specify pursuant to

regulations prescribed by the Administrator to implement this

subsection)" before period at end, and in par. (10)(B)(ii) inserted

"(5)(A) or" after "under paragraph".

1987 - Subsec. (a)(4). Pub. L. 100-198, Sec. 4(a), added par.

(4).

Subsec. (c)(1)(D). Pub. L. 100-198, Sec. 5(a)(1)-(3), substituted

"Except as provided in subparagraph (D) of paragraph (10) of this

subsection, the" for "The" at beginning, "applicable under

paragraph (10) of this subsection, and" for "of the liquidation

sale of the property securing the loan (or such earlier date

following the expiration of a reasonable period of time for such

sale to occur as the Administrator may specify pursuant to

regulations prescribed by the Administrator to implement this

subsection), and" in cl. (ii), and "regulations prescribed by the

Administrator to implement this subsection" for "such regulations"

in cl. (iii).

Subsec. (c)(10), (11). Pub. L. 100-198, Sec. 5(a)(4), added pars.

(10) and (11).

1984 - Subsec. (a)(1). Pub. L. 98-369, Sec. 2512(a)(1)(A)-(C),

designated existing first sentence as par. (1), substituted

"Administrator of such default. Upon receipt of such notice, the

Administrator may, subject to subsection (c) of this section," for

"Administrator who shall thereupon", and substituted "guaranteed.

If the Administrator makes a payment, the Administrator shall" for

"guaranteed, and shall".

Subsec. (a)(2). Pub. L. 98-369, Sec. 2512(a)(1)(A), designated

existing second and third sentences as par. (2).

Subsec. (a)(3). Pub. L. 98-369, Sec. 2512(a)(1)(A), designated

existing fourth sentence as par. (3).

Subsec. (c). Pub. L. 98-369, Sec. 2512(a)(2), added subsec. (c).

1976 - Subsec. (a). Pub. L. 94-324 substituted "the

Administrator's" for "his".

Subsec. (b). Pub. L. 94-324 substituted "the Administrator" for

"he" wherever appearing.

1965 - Pub. L. 89-117 designated existing provisions as subsec.

(a) and added subsec. (b).

EFFECTIVE DATE OF 1993 AMENDMENT

Section 12006(b) of Pub. L. 103-66 provided that: "The amendments

made by this section [amending this section] shall become effective

October 1, 1993."

EFFECTIVE DATE OF 1989 AMENDMENT

Section 308(b)(2) of Pub. L. 101-237 provided that: "The

amendment made by paragraph (1) [amending this section] shall take

effect as of October 1, 1989."

EFFECTIVE DATE OF 1987 AMENDMENTS

Section 4(b) of Pub. L. 100-198 provided that: "The amendment

made by subsection (a) [amending this section] shall take effect on

March 1, 1988."

Section 5(c) of Pub. L. 100-198 provided that: "The amendments

made by subsection (a) [amending this section] shall apply to

defaults which occur more than 60 days after the date of the

enactment of this Act [Dec. 21, 1987]."

EFFECTIVE DATE OF 1984 AMENDMENTS

Section 1(a) of Pub. L. 100-136 provided that: "Notwithstanding

section 2512(c) of the Deficit Reduction Act of 1984 (Public Law

98-369) [set out below], the provisions of section 1816(c) [now

3732(c)] of title 38, United States Code, shall continue in effect

through November 15, 1987."

Section 2512(c)(1) of Pub. L. 98-369 provided that: "The

amendments made by subsection (a) [amending subsec. (a) and adding

subsecs. (c) and (d) of section 1816 [now 3732(a), (c) and 3733(a)]

of this title] shall take effect on October 1, 1984."

Section 2512(c)(2) of Pub. L. 98-369, which provided that

subsecs. (c) and (d) of section 1816 [now 3732(a), (c) and 3733(a)]

of this title] would cease to be effective on Oct. 1, 1987, was

repealed by Pub. L. 100-198, Sec. 5(b), Dec. 21, 1987, 101 Stat.

1317.

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.

"NET VALUE" DEFINED WITH RESPECT TO LOANS CLOSED BEFORE OCTOBER 1,

1993

Pub. L. 102-389, title I, Oct. 6, 1992, 106 Stat. 1574, provided

in part: "That notwithstanding the provisions of 38 U.S.C.

3732(c)(1)(C) and (c)(11) or any other law, with respect to any

loan guaranteed for any purpose specified in 38 U.S.C. 3710 which

was closed before October 1, 1993, the term 'net value' for

purposes of paragraphs (4) through (10) of 38 U.S.C. 3732[(c)]

shall mean 'the amount equal to (i) the fair market value of the

property, minus (ii) the total of the amounts which the Secretary

estimates the Secretary would incur (if the Secretary were to

acquire and dispose of the property) for property taxes,

assessments, liens, property maintenance, property improvement,

administration, resale (including losses sustained on the resale of

the property), and other costs resulting from the acquisition and

disposition of the property, excluding any amount attributed to the

cost of the Government of borrowing funds'."

-FOOTNOTE-

(!1) So in original. The reference to clause (B) of paragraph (6)

probably should be to paragraph (6) in its entirety.

-End-

-CITE-

38 USC Sec. 3733 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3733. Property management

-STATUTE-

(a)(1) Of the number of purchases made during any fiscal year of

real property acquired by the Secretary as the result of a default

on a loan guaranteed under this chapter for a purpose described in

section 3710(a) of this title, not more than 65 percent, nor less

than 50 percent, of such purchases may be financed by a loan made

by the Secretary. The maximum percentage stated in the preceding

sentence may be increased to 80 percent for any fiscal year if the

Secretary determines that such an increase is necessary in order to

maintain the effective functioning of the loan guaranty program.

(2) After September 30, 1990, the percentage limitations

described in paragraph (1) of this subsection shall have no effect.

(3) The Secretary may, beginning on October 1, 1990, sell any

note evidencing a loan referred to in paragraph (1) -

(A) with recourse; or

(B) without recourse, but only if the amount received is equal

to an amount which is not less than the unpaid balance of such

loan.

(4)(A) Except as provided in subparagraph (B) of this paragraph,

the amount of a loan made by the Secretary to finance the purchase

of real property from the Secretary described in paragraph (1) of

this subsection may not exceed an amount equal to 95 percent of the

purchase price of such real property.

(B)(i) The Secretary may waive the provisions of subparagraph (A)

of this paragraph in the case of any loan described in paragraph

(5) of this subsection.

(ii) A loan described in subparagraph (A) of this paragraph may,

to the extent the Secretary determines to be necessary in order to

market competitively the property involved, exceed 95 percent of

the purchase price.

(5) The Secretary may include, as part of a loan to finance a

purchase of real property from the Secretary described in paragraph

(1) of this subsection, an amount to be used only for the purpose

of rehabilitating such property. Such amount may not exceed the

amount necessary to rehabilitate the property to a habitable state,

and payments shall be made available periodically as such

rehabilitation is completed.

(6) The Secretary shall make a loan to finance the sale of real

property described in paragraph (1) of this subsection at an

interest rate that is lower than the prevailing mortgage market

interest rate in areas where, and to the extent, the Secretary

determines, in light of prevailing conditions in the real estate

market involved, that such lower interest rate is necessary in

order to market the property competitively and is in the interest

of the long-term stability and solvency of the Veterans Housing

Benefit Program Fund established by section 3722(a) of this title.

(b) The Secretary may not make a loan to finance a purchase of

property acquired by the Secretary as a result of a default on a

loan guaranteed under this chapter unless the purchaser meets the

credit underwriting standards established under section

3710(g)(2)(A) of this title.

(c)(1) The Secretary shall identify and compile information on

common factors which the Secretary finds contribute to foreclosures

on loans guaranteed under this chapter.

(2) The Secretary shall include a summary of the information

compiled, and the Secretary's findings, under paragraph (1) of this

subsection in the annual report submitted to the Congress under

section 529 of this title. As part of such summary and findings,

the Secretary shall provide a separate analysis of the factors

which contribute to foreclosures of loans which have been assumed.

(d)(1) The Secretary shall furnish to real estate brokers and

other real estate sales professionals information on the

availability of real property for disposition under this chapter

and the procedures used by the Department of Veterans Affairs to

dispose of such property.

(2) For the purpose of facilitating the most expeditious sale, at

the highest possible price, of real property acquired by the

Secretary as the result of a default on a loan guaranteed, insured,

or made under this chapter, the Secretary shall list all such

property with real estate brokers under such arrangements as the

Secretary determines to be most appropriate and cost effective.

-SOURCE-

(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1212, Secs. 1816(d)-(f),

1832; Pub. L. 98-369, div. B, title V, Sec. 2512(a)(2), July 18,

1984, 98 Stat. 1117; Pub. L. 99-576, title IV, Secs. 402(c)(1),

403, 408(a), Oct. 28, 1986, 100 Stat. 3281, 3283; Pub. L. 100-136,

Sec. 2, Oct. 16, 1987, 101 Stat. 813; Pub. L. 100-198, Secs.

6(a)(1), (b)(1), 14, Dec. 21, 1987, 101 Stat. 1317, 1318, 1325;

Pub. L. 100-203, title VII, Secs. 7001, 7003(a), Dec. 22, 1987, 101

Stat. 1330-278, 1330-279; Pub. L. 100-253, Sec. 2, Feb. 29, 1988,

102 Stat. 20; renumbered Sec. 1833 and amended Pub. L. 100-322,

title IV, Sec. 415(b)(1)(D), (5)(B), (C), May 20, 1988, 102 Stat.

550, 551; Pub. L. 100-689, title III, Sec. 301, Nov. 18, 1988, 102

Stat. 4176; Pub. L. 101-237, title III, Secs. 305(a), 313(b)(1),

(2), Dec. 18, 1989, 103 Stat. 2073, 2077; Pub. L. 101-239, title V,

Secs. 5002, 5003(a), Dec. 19, 1989, 103 Stat. 2136; Pub. L. 102-54,

Secs. 2, 14(g)(1), 15(a)(5), June 13, 1991, 105 Stat. 267, 288,

289; renumbered Sec. 3733 and amended Pub. L. 102-83, Secs.

2(c)(3), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 402, 406; Pub. L.

102-291, Sec. 5(b), May 20, 1992, 106 Stat. 180; Pub. L. 105-368,

title VI, Sec. 602(c)(2), (e)(1)(E), Nov. 11, 1998, 112 Stat.

3346.)

-MISC1-

AMENDMENTS

1998 - Subsec. (a)(6). Pub. L. 105-368, Sec. 602(e)(1)(E),

substituted "Veterans Housing Benefit Program Fund established by

section 3722(a)" for "Department of Veterans Affairs Loan Guaranty

Revolving Fund established by section 3724(a)".

Subsec. (e). Pub. L. 105-368, Sec. 602(c)(2), struck out subsec.

(e) which read as follows: "Notwithstanding any other provision of

law, the amount received from the sale of any note evidencing a

loan secured by real property described in subsection (a)(1) of

this section, and the amount received from the sale of securities

under section 3720(h) of this title, shall be credited, without any

reduction and for the fiscal year in which the amount is received,

as offsetting collections of -

"(1) the revolving fund for which a fee under section 3729 of

this title was collected (or was exempted from being collected)

at the time of the original guaranty of the loan that was secured

by the same property; or

"(2) in any case in which there was no requirement of (or

exemption from) a fee at the time of the original guaranty of the

loan that was secured by the same property, the Loan Guaranty

Revolving Fund; and

the total so credited to any revolving fund for a fiscal year shall

offset outlays attributed to such revolving fund during such fiscal

year."

1992 - Subsec. (e). Pub. L. 102-291 inserted ", and the amount

received from the sale of securities under section 3720(h) of this

title,".

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1833 of this

title as this section.

Subsec. (a)(1). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3710(a)" for "1810(a)".

Subsec. (a)(2). Pub. L. 102-54, Sec. 2(a), added par. (2) and

struck out former par. (2) which read as follows: "In carrying out

paragraph (1) of this subsection, the Secretary, to the maximum

extent consistent with that paragraph and with maintaining the

effective functioning of the loan guaranty program under this

chapter, shall minimize the number of loans made by the Secretary

to finance purchases of real property from the Secretary described

in that paragraph."

Subsec. (a)(3). Pub. L. 102-54, Sec. 2(a), added par. (3) and

struck out former par. (3) which authorized sales before Oct. 1,

1990, of notes for loans under subsec. (a)(1) and required

Secretary to make reports of such sales to Committees on Veterans'

Affairs of Senate and House of Representatives.

Subsec. (a)(6). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3724(a)" for "1824(a)".

Pub. L. 102-54, Sec. 3(b), redesignated par. (7) as (6) and

struck out former par. (6) which read as follows: "This subsection

shall cease to have effect on December 31, 1990."

Subsec. (a)(7). Pub. L. 102-54, Sec. 3(b)(2), redesignated par.

(7) as (6).

Subsec. (b). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3710(g)(2)(A)" for "1810(g)(2)(A)".

Subsec. (c)(2). Pub. L. 102-83, Sec. 2(c)(3), substituted

"section 529" for "section 214".

Subsec. (d). Pub. L. 102-54, Sec. 14(g)(1), made a technical

amendment to Pub. L. 100-322, Sec. 415(b)(5)(C). See 1988 Amendment

note below.

Subsec. (e). Pub. L. 102-83, Sec. 5(c)(1), substituted "3729" for

"1829" in par. (1).

Pub. L. 102-54, Sec. 15(a)(5), struck out subsec. (e) as added by

Pub. L. 101-239, Sec. 5003(a), which was identical to subsec. (e)

added by Pub. L. 101-237, Sec. 305(a)(3). See 1989 Amendment note

below.

1989 - Subsec. (a). Pub. L. 101-237 Sec. 313(b)(1), (2),

substituted "Secretary" and "Department of Veterans Affairs" for

"Administrator" and "Veterans' Administration", respectively,

wherever appearing.

Subsec. (a)(3). Pub. L. 101-239, Sec. 5002, substituted "October

1, 1990" for "October 1, 1989" wherever appearing.

Pub. L. 101-237, Sec. 305(a)(1), which directed the amendment of

subpar. (A) by substituting "Subject to subparagraph (C) of this

paragraph," for "Before October 1, 1990," the amendment of

subparagraph (B) by striking out "occurring before October 1,

1990," after "of this paragraph", and the amendment of subpar. (C)

by substituting "October 1, 1989" for "October 1, 1990" in

introductory provisions, did not become effective, see section

305(b)(1) of Pub. L. 101-237, set out as an Effective Date of 1989

Amendments note below.

Subsec. (a)(6). Pub. L. 101-237, Sec. 305(a)(2), substituted

"December 31" for "October 1".

Subsecs. (b) to (d). Pub. L. 101-237, Sec. 313(b)(1), (2),

substituted "Secretary", "Secretary's", and "Department of Veterans

Affairs" for "Administrator", "Administrator's", and "Veterans'

Administration", respectively, wherever appearing.

Subsec. (e). Pub. L. 101-237, Sec. 305(a)(3), and Pub. L.

101-239, Sec. 5003(a), amended section identically adding identical

subsecs. (e).

1988 - Pub. L. 100-322, Sec. 415(b)(1)(D), added section

catchline.

Subsec. (a). Pub. L. 100-322, Sec. 415(b)(1)(D), redesignated

subsec. (d) of section 1816 of this title as subsec. (a) of this

section.

Subsec. (a)(4)(B) [formerly Sec. 1816(d)(4)(B)]. Pub. L. 100-253

designated existing provisions as cl. (i) and added cl. (ii).

Subsec. (a)(7). Pub. L. 100-689 added par. (7).

Subsecs. (b), (c). Pub. L. 100-322, Sec. 415(b)(1)(D),

redesignated subsecs. (e) and (f) of section 1816 of this title as

subsecs. (b) and (c), respectively, of this section.

Subsec. (d). Pub. L. 100-322, Sec. 415(b)(5)(B), (C), as amended

by Pub. L. 102-54, Sec. 14(g)(1), redesignated subsecs. (a) and (b)

of section 1832 of this title as pars. (1) and (2), respectively,

of subsec. (d) of this section.

1987 - Subsec. (a)(1) [formerly Sec. 1816(d)(1)]. Pub. L.

100-198, Sec. 6(a)(1), and Pub. L. 100-203, Sec. 7003(a), amended

par. (1) identically, substituting "not more than 65 percent, nor

less than 50 percent" for "not more than 75 percent, nor less than

60 percent". See 1988 Amendment note above.

Subsec. (a)(3) [formerly Sec. 1816(d)(3)]. Pub. L. 100-203, Sec.

7001, added subpars. (A) and (B), redesignated existing provisions

as subpar. (C), substituted "Beginning on October 1, 1989, the

Administrator may sell any note evidencing" for "The Administrator

may sell any note securing", and redesignated cls. (A) and (B) as

(i) and (ii), respectively. See 1988 Amendment note above.

Pub. L. 100-136 amended par. (3) generally. Prior to amendment,

par. (3) read as follows: "Notes securing such loans may be sold

with recourse only to the extent that the Administrator determines

that selling such notes with recourse is necessary in order to

maintain the effective functioning of the loan guaranty program

under this chapter." See 1988 Amendment note above.

Subsec. (a)(4) to (6) [formerly Sec. 1816(d)(4) to (6)]. Pub. L.

100-198, Sec. 6(b)(1), added pars. (4) to (6). See 1988 Amendment

note above.

Subsec. (d) [formerly Sec. 1832]. Pub. L. 100-198, Sec. 14,

designated existing provisions as subsec. (a) and added subsec.

(b). See 1988 Amendment note above.

1986 - Subsec. (b) [formerly Sec. 1816(e)]. Pub. L. 99-576, Sec.

402(c)(1), added subsec. (e). See 1988 Amendment note above.

Subsec. (c) [formerly Sec. 1816(f)]. Pub. L. 99-576, Sec. 403,

added subsec. (f). See 1988 Amendment note above.

Subsec. (d) [formerly Sec. 1832]. Pub. L. 99-576, Sec. 408(a),

enacted section. See 1988 Amendment note above.

1984 - Subsec. (a) [formerly Sec. 1816(d)]. Pub. L. 98-369, Sec.

2512(a)(2), added subsec. (d). See 1988 Amendment note above.

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 1991 AMENDMENT

Section 14(g)(1) of Pub. L. 102-54 provided that the amendment

made by that section is effective as of May 20, 1988.

EFFECTIVE DATE OF 1989 AMENDMENTS

Section 5003(b) of Pub. L. 101-239 provided that: "Subsection (e)

of section 1833 [now 3733] of title 38, United States Code, as

added by subsection (a), shall apply with respect to amounts

referred to in such subsection (e) received on or after October 1,

1989."

Section 305(b)(1) of Pub. L. 101-237, as amended by Pub. L.

102-83, Sec. 5(c)(2), Aug. 6, 1991, 105 Stat. 406, provided that:

"If, before the date and time of the enactment of this Act [Dec.

18, 1989], no provision of law has been enacted amending section

1833 [now 3733] of title 38, United States Code, by adding a new

subsection (e) with a text substantively identical to the text of

the new subsection (e) added to such section 1833 [now 3733] by

subsection (a)(3) of this section, the provisions of subsection

(a)(1) of this section amending subsection (a)(3) of such section

1833 [now 3733] shall not take effect."

Section 305(b)(2) of Pub. L. 101-237, as amended by Pub. L.

102-83, Sec. 5(c)(2), Aug. 6, 1991, 105 Stat. 406, provided that:

"Subsection (e) of section 1833 [now 3733] of such title 38, as

added by subsection (a)(3), shall apply with respect to amounts

referred to in such subsection (e) received after September 30,

1989."

EFFECTIVE DATE OF 1987 AMENDMENTS

Section 7003(b) of Pub. L. 100-203 provided that: "The amendment

made by subsection (a) [amending this section] shall take effect as

of October 1, 1987."

Section 6(a)(2) of Pub. L. 100-198 provided that: "The amendment

made by paragraph (1) [amending this section] shall take effect as

of October 1, 1987."

Section 6(b)(2) of Pub. L. 100-198 provided that: "The amendment

made by this subsection [amending this section] shall apply to

loans made more than 30 days after the date of the enactment of

this Act [Dec. 21, 1987]."

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-369 effective Oct. 1, 1984, see section

2512(c) of Pub. L. 98-369, as amended, set out as a note under

section 3732 of this title.

RULE FOR CONSTRUCTION OF DUPLICATE PROVISIONS

Section 7004(b) of title VII of Pub. L. 100-203 provided that:

"In applying the provisions of this title [title VII of Pub. L.

100-203] and the provisions of the Veterans' Home Loan Program

Improvements and Property Rehabilitation Act of 1987 [Pub. L.

100-198] which make the same amendments as the provisions of this

title [amending sections 1816 [now 3733] and 1829 [now 3729] of

this title] -

"(1) the identical provisions of title 38, United States Code,

amended by the provisions of this title and the provisions of

such Act shall be treated as having been amended only once; and

"(2) in executing to title 38, United States Code, the

amendments made by this title and by such Act, such amendments

shall be executed so as to appear only once in the law."

REPORT TO CONGRESS

Section 6(c) of Pub. L. 100-198 directed Administrator of

Veterans' Affairs, by Mar. 1, 1990, to transmit to Congress a

report of activities carried out, through Dec. 31, 1989, under

paragraphs (4) and (5) of section 1816(d) of this title [which

became pars. (4) and (5) of subsec. (a) of this section].

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2041, 3714, 3722 of this

title.

-End-

-CITE-

38 USC Sec. 3734 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3734. Annual submission of information on the Veterans Housing

Benefit Program Fund and housing programs

-STATUTE-

(a) In the documents providing detailed information on the budget

for the Department of Veterans Affairs that the Secretary submits

to the Congress in conjunction with the President's budget

submission for each fiscal year pursuant to section 1105 of title

31, the Secretary shall include -

(1) a description of the operations of the Veterans Housing

Benefit Program Fund during the fiscal year preceding the fiscal

year in which such budget is submitted; and

(2) the needs of such fund, if any, for appropriations for -

(A) the fiscal year in which the budget is submitted; and

(B) the fiscal year for which the budget is submitted.

(b) The matters submitted under subsection (a) of this section

shall include, with respect to the fund referred to in subsection

(a), the following:

(1) Information and financial data on the operations of the

fund during the fiscal year before the fiscal year in which such

matters are submitted and estimated financial data and related

information on the operation of the fund for -

(A) the fiscal year of the submission; and

(B) the fiscal year following the fiscal year of the

submission.

(2) Estimates of the amount of revenues derived by the fund in

the fiscal year preceding the fiscal year of the submission, in

the fiscal year of the submission, and in the fiscal year

following the fiscal year of the submission from each of the

following sources:

(A) Fees collected under section 3729(a) of this title for

each category of loan guaranteed, insured, or made under this

chapter or collected under section 3729(b) of this title for

assumed loans.

(B) Investment income.

(C) Sales of foreclosed properties.

(D) Loan asset sales.

(E) Each additional source of revenue.

(3) Information, for each fiscal year referred to in paragraph

(2) of this subsection, regarding the types of dispositions made

and anticipated to be made of defaults on loans guaranteed,

insured, or made under this chapter, including the cost to the

fund, and the numbers, of such types of dispositions.

(c) The information submitted under subsection (a) shall include

a statement that summarizes the financial activity of each of the

housing programs operated under this chapter. The statement shall

be presented in a form that is simple, concise, and readily

understandable, and shall not include references to financing

accounts, liquidating accounts, or program accounts.

-SOURCE-

(Added Pub. L. 101-237, title III, Sec. 302(b)(1), Dec. 18, 1989,

103 Stat. 2070, Sec. 1834; renumbered Sec. 3734 and amended Pub. L.

102-83, Sec. 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L.

105-368, title VI, Sec. 602(d), (e)(1)(F), (3)(A), Nov. 11, 1998,

112 Stat. 3346, 3347; Pub. L. 107-14, Sec. 8(a)(9), June 5, 2001,

115 Stat. 35; Pub. L. 107-330, title III, Sec. 308(g)(12), Dec. 6,

2002, 116 Stat. 2829.)

-MISC1-

AMENDMENTS

2002 - Subsec. (b)(2)(B) to (F). Pub. L. 107-330 redesignated

subpars. (C) to (F) as (B) to (E), respectively, and struck out

former subpar. (B) which read as follows: "Federal Government

payments under section 3729(a)(3) of this title."

2001 - Subsec. (a). Pub. L. 107-14, Sec. 8(a)(9)(A), struck out

"United States Code," after "section 1105 of title 31," in

introductory provisions.

Subsec. (a)(2). Pub. L. 107-14, Sec. 8(a)(9)(B), substituted

"appropriations for" for "appropriations in".

1998 - Pub. L. 105-368, Sec. 602(e)(3)(A), substituted "Veterans

Housing Benefit Program Fund and housing programs" for "Loan

Guaranty Revolving Fund and the Guaranty and Indemnity Fund" in

section catchline.

Subsec. (a)(1). Pub. L. 105-368, Sec. 602(e)(1)(F)(i)(I),

substituted "Veterans Housing Benefit Program Fund" for "Loan

Guaranty Revolving Fund and the Guaranty and Indemnity Fund".

Subsec. (a)(2). Pub. L. 105-368, Sec. 602(e)(1)(F)(i)(II),

substituted "fund," for "funds," in introductory provisions.

Subsec. (b). Pub. L. 105-368, Sec. 602(e)(1)(F)(ii), substituted

"the fund" for "each fund" in introductory provisions.

Subsec. (b)(2)(B) to (G). Pub. L. 105-368, Sec.

602(e)(1)(F)(iii), redesignated subpars. (C) to (G) as (B) to (F),

respectively, in subpar. (B), substituted "section 3729(a)(3)" for

"subsections (a)(3) and (c)(2) of section 3729", and struck out

former subpar. (B) which read as follows: "Federal Government

contributions made under clauses (A) and (B) of section 3725(c)(2)

of this title."

Subsec. (c). Pub. L. 105-368, Sec. 602(d), added subsec. (c).

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1834 of this

title as this section.

Subsec. (b)(2). Pub. L. 102-83, Sec. 5(c)(1), substituted

"3729(a)" for "1829(a)" and "3729(b)" for "1829(b)" in subpar. (A),

"3725(c)(2)" for "1825(c)(2)" in subpar. (B), and "3729" for "1829"

in subpar. (C).

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.

-End-

-CITE-

38 USC Sec. 3735 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

[Sec. 3735. Renumbered Sec. 2041]

-STATUTE-

-End-

-CITE-

38 USC Sec. 3736 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER III - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 3736. Reporting requirements

-STATUTE-

The annual report required by section 529 of this title shall

include a discussion of the activities under this chapter.

Beginning with the report submitted at the close of fiscal year

1996, and every second year thereafter, this discussion shall

include information regarding the following:

(1) Loans made to veterans whose only qualifying service was in

the Selected Reserve.

(2) Interest rates and discount points which were negotiated

between the lender and the veteran pursuant to section

3703(c)(4)(A)(i) of this title.

(3) The determination of reasonable value by lenders pursuant

to section 3731(f) of this title.

(4) Loans that include funds for energy efficiency improvements

pursuant to section 3710(a)(10) of this title.

(5) Direct loans to Native American veterans made pursuant to

subchapter V of this chapter.

-SOURCE-

(Added Pub. L. 104-110, title II, Sec. 201(a)(1), Feb. 13, 1996,

110 Stat. 770.)

-End-

-CITE-

38 USC SUBCHAPTER IV - SMALL BUSINESS LOANS 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

SUBCHAPTER IV - SMALL BUSINESS LOANS

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in section 3117 of this title.

-End-

-CITE-

38 USC Sec. 3741 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

Sec. 3741. Definitions

-STATUTE-

For the purposes of this subchapter -

(1) The term "disabled veteran" means (A) a veteran who is

entitled to compensation under laws administered by the Secretary

for a disability rated at 30 percent or more, or (B) a veteran

whose discharge or release from active duty was for a disability

incurred or aggravated in line of duty.

(2) The term "veteran of the Vietnam era" means a person (A)

who served on active duty for a period of more than 180 days, any

part of which occurred during the Vietnam era, and who was

discharged or released therefrom with other than a dishonorable

discharge, or (B) who was discharged or released from active duty

for a service-connected disability if any part of such active

duty was performed during the Vietnam era.

-SOURCE-

(Added Pub. L. 97-72, title III, Sec. 302(a), Nov. 3, 1981, 95

Stat. 1055, Sec. 1841; amended Pub. L. 99-576, title VII, Sec.

702(9), Oct. 28, 1986, 100 Stat. 3302; renumbered Sec. 3741 and

amended Pub. L. 102-83, Secs. 4(a)(1), 5(a), Aug. 6, 1991, 105

Stat. 403, 406.)

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1841 of this

title as this section.

Par. (1). Pub. L. 102-83, Sec. 4(a)(1), substituted "administered

by the Secretary" for "administered by the Veterans'

Administration".

1986 - Pub. L. 99-576 substituted "percent" for "per centum" in

par. (1) and "180" for "one hundred and eighty" in par. (2).

EFFECTIVE DATE

Section 305 of title III of Pub. L. 97-72 provided that: "The

amendments made by this title [see Tables for classification] shall

take effect at the end of the one-hundred-and-eighty-day period

beginning on the date of the enactment of this Act [Nov. 3, 1981],

except that the authority of the Administrator of Veterans' Affairs

to promulgate regulations under subchapter IV of chapter 37 of

title 38, United States Code (as added by section 302), shall take

effect on such date of enactment."

SHORT TITLE

For short title of title III of Pub. L. 97-72, which enacted this

subchapter, as the "Veterans' Small Business Loan Act of 1981", see

section 301 of Pub. L. 97-72, set out as a Short Title of 1981

Amendments note under section 101 of this title.

AUTHORIZATION OF APPROPRIATIONS

Section 304 of Pub. L. 97-72 authorized to be appropriated a

total of $750,000 for fiscal years 1982 through 1986 for use by

Administrator of Veterans' Affairs for expenses incidental to

establishment of small business loan program authorized by

subchapter IV of this chapter.

-End-

-CITE-

38 USC Sec. 3742 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

Sec. 3742. Small business loan program

-STATUTE-

(a)(1) Subject to subsection (b) of this section, the Secretary

may provide financial assistance to veterans' small business

concerns for the purpose of (A) financing plant construction,

conversion, or expansion (including the acquisition of land), (B)

financing the acquisition of equipment, facilities, machinery,

supplies, or materials, or (C) supplying such concerns with working

capital.

(2) Subject to paragraph (3)(A) of this subsection, financial

assistance under this section may be provided in the form of (A)

loan guaranties, or (B) direct loans.

(3) The Secretary shall specify in regulations the criteria to be

met for a business concern to qualify as a veterans' small business

concern for the purposes of this subchapter. Such regulations shall

include requirements -

(A) that at least 51 percent of a business concern must be

owned by individuals who are veterans of the Vietnam era or

disabled veterans in order for such concern to qualify for a loan

guaranty and that at least 51 percent of a business concern must

be owned by disabled veterans in order for such concern to

qualify for a direct loan; and

(B) that the management and daily business operations of the

concern must be directed by one or more of the veterans whose

ownership interest is part of the majority ownership for the

purposes of meeting the requirement in clause (A) of this

paragraph.

(b) The availability of financial assistance under subsection (a)

of this section is subject to the following limitations:

(1) The Secretary may not make a direct loan under this section

unless the veterans' small business concern applying for the loan

shows to the satisfaction of the Secretary that the concern is

unable to obtain a loan guaranteed by the Department under this

section or made or guaranteed by the Small Business

Administration.

(2) The Secretary may not guarantee a loan under this section

if the loan bears a rate of interest in excess of the maximum

rate of interest prescribed under section 3745 of this title.

(3) The Secretary may not make or guarantee a loan under this

section for an amount in excess of $200,000.

(4) The original liability of the Secretary on any loan

guaranteed under this section may not exceed 90 percent of the

amount of the loan, and such liability shall decrease or increase

pro rata with any decrease or increase of the amount of the

unpaid portion of the loan, but such liability may not exceed the

amount of the original guaranty.

(c) Each loan made or guaranteed under this subchapter shall be

of such sound value, taking into account the creditworthiness of

the veterans' small business concern (and the individual owners)

applying for such loan, or so secured as reasonably to assure

payment.

(d)(1) Except as provided in paragraph (2) of this subsection,

the Secretary may not make or guarantee a loan under this

subchapter to a veterans' small business concern in which an

ownership interest is held by a veteran who also has an ownership

interest in another small business concern if such ownership

interest was considered in qualifying that other concern for an

outstanding loan made or guaranteed under this subchapter or the

Small Business Act (15 U.S.C. 631 et seq.).

(2) Paragraph (1) of this subsection shall not apply if 51

percent or more of the business concern seeking a direct or

guaranteed loan under this subchapter is owned by veterans of the

Vietnam era or disabled veterans without including the ownership

interest of the veteran whose ownership interest in another small

business concern was previously considered in qualifying that other

concern for an outstanding guaranteed or direct business loan under

this subchapter or the Small Business Act (15 U.S.C. 631 et seq.).

(e)(1) In order to protect the interest of the United States,

upon application by a veterans' small business concern which is the

recipient of a loan guaranteed under this subchapter, the Secretary

(subject to the provisions of this subsection) may undertake the

veterans' small business concern's obligation to make payments

under such loan or, if the loan was a direct loan made by the

Secretary, may suspend such obligation. While such payments are

being made by the Secretary pursuant to the undertaking of such

obligation or while such obligation is suspended, no such payment

with respect to the loan may be required from the concern.

(2) The Secretary may undertake or suspend a veterans' small

business concern's obligation under this subsection only if -

(A) such undertaking or suspension of the obligation is, in the

judgment of the Secretary, necessary to protect the interest of

the United States;

(B) with the undertaking or suspension of the obligation, the

small business concern would, in the judgment of the Secretary,

become or remain a viable small business entity; and

(C) the small business concern executes an agreement in writing

satisfactory to the Secretary as provided by paragraph (4) of

this subsection.

(3) The period of time for which the Secretary undertakes or

suspends the obligation on a loan under this subsection may not

exceed five years. The Secretary may extend the maturity of any

loan on which the Secretary undertakes or suspends the obligation

under this subsection for a corresponding period of time.

(4)(A) Before the Secretary may undertake or suspend a veterans'

small business concern's obligation under this subsection, the

Secretary shall require the small business concern to execute an

agreement to repay the aggregate amount of the payments which were

required under the loan during the period for which the obligation

was undertaken or suspended -

(i) by periodic payments not less in amount or less frequently

falling due than those which were due under the loan during such

period,

(ii) pursuant to a repayment schedule agreed upon by the

Secretary and the small business concern, or

(iii) by a combination of the method of payments described in

clauses (i) and (ii) of this subparagraph.

(B) In addition to requiring the small business concern to

execute the agreement described in subparagraph (A) of this

paragraph, the Secretary shall, before the undertaking or

suspension of the obligation, take such action and require the

small business concern to take such action as the Secretary

considers appropriate in the circumstances, including the provision

of such security as the Secretary considers necessary or

appropriate, to assure that the rights and interest of the United

States and any lender will be safeguarded adequately during and

after the period in which such obligation is so undertaken or

suspended.

-SOURCE-

(Added Pub. L. 97-72, title III, Sec. 302(a), Nov. 3, 1981, 95

Stat. 1055, Sec. 1842; amended Pub. L. 99-576, title VII, Sec.

702(10), Oct. 28, 1986, 100 Stat. 3302; Pub. L. 101-237, title III,

Sec. 313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec. 3742

and amended Pub. L. 102-83, Secs. 4(a)(3), (4), 5(a), (c)(1), Aug.

6, 1991, 105 Stat. 404, 406.)

-REFTEXT-

REFERENCES IN TEXT

The Small Business Act, referred to in subsec. (d), is Pub. L.

85-536, July 18, 1958, 72 Stat. 384, as amended, which is

classified generally to chapter 14A (Sec. 631 et seq.) of Title 15,

Commerce and Trade. For complete classification of this Act to the

Code, see Short Title note set out under section 631 of Title 15

and Tables.

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1842 of this

title as this section.

Subsec. (b)(1). Pub. L. 102-83, Sec. 4(a)(3), (4), substituted

"Department" for "Veterans' Administration".

Subsec. (b)(2). Pub. L. 102-83, Sec. 5(c)(1), substituted "3745"

for "1845".

1989 - Subsecs. (a), (b), (d), (e). Pub. L. 101-237 substituted

"Secretary" for "Administrator" wherever appearing.

1986 - Subsecs. (a)(3)(A), (b)(4), (d)(2). Pub. L. 99-576

substituted "percent" for "per centum" wherever appearing.

-End-

-CITE-

38 USC Sec. 3743 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

Sec. 3743. Liability on loans

-STATUTE-

Each individual who has an ownership interest in a veterans'

small business concern that is provided a direct loan under this

subchapter, or that obtains a loan guaranteed under this

subchapter, shall execute a note or other document evidencing the

direct or guaranteed business loan, and such individuals shall be

jointly and severally liable to the United States for the amount of

such direct loan or, in the case of a guaranteed loan, for any

amount paid by the Secretary on account of such loan.

-SOURCE-

(Added Pub. L. 97-72, title III, Sec. 302(a), Nov. 3, 1981, 95

Stat. 1057, Sec. 1843; amended Pub. L. 101-237, title III, Sec.

313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec. 3743,

Pub. L. 102-83, Sec. 5(a), Aug. 6, 1991, 105 Stat. 406.)

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83 renumbered section 1843 of this title as

this section.

1989 - Pub. L. 101-237 substituted "Secretary" for

"Administrator".

-End-

-CITE-

38 USC Sec. 3744 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

Sec. 3744. Approval of loans by the Secretary

-STATUTE-

(a) Except as provided in subsection (b) of this section, a loan

may not be guaranteed under this subchapter unless, before the

closing of the loan, it is submitted to the Secretary for approval

and the Secretary grants approval.

(b) The Secretary may exempt any lender of a class of lenders

listed in section 3702(d) of this title from the prior approval

requirement in subsection (a) of this section if the Secretary

determines that the experience of such lender or class of lenders

warrants such exemption.

(c) The Secretary may at any time upon thirty days' notice

require loans to be made by any lender or class of lenders under

this subchapter to be submitted to the Secretary for prior

approval. No guaranty shall exist with respect to any such loan

unless evidence of the guaranty is issued by the Secretary.

-SOURCE-

(Added Pub. L. 97-72, title III, Sec. 302(a), Nov. 3, 1981, 95

Stat. 1057, Sec. 1844; amended Pub. L. 101-237, title III, Sec.

313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec. 3744 and

amended Pub. L. 102-83, Sec. 5(a), (c)(1), Aug. 6, 1991, 105 Stat.

406.)

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1844 of this

title as this section.

Subsec. (b). Pub. L. 102-83, Sec. 5(c)(1), substituted "3702(d)"

for "1802(d)".

1989 - Pub. L. 101-237 substituted "Secretary" for

"Administrator" in section catchline and wherever appearing in

text.

-End-

-CITE-

38 USC Sec. 3745 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

Sec. 3745. Interest on loans

-STATUTE-

(a) Loans guaranteed under this subchapter shall bear interest

not in excess of such rate as the Secretary may from time to time

find the loan market demands. In establishing the rate of interest

that shall be applicable to such loans, the Secretary shall consult

with the Administrator of the Small Business Administration.

(b) The rate of interest on any direct loan made by the Secretary

under this subchapter may not exceed the maximum rate in effect

under subsection (a) of this section at the time the direct loan is

made.

-SOURCE-

(Added Pub. L. 97-72, title III, Sec. 302(a), Nov. 3, 1981, 95

Stat. 1058, Sec. 1845; amended Pub. L. 101-237, title III, Sec.

313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec. 3745 and

amended Pub. L. 102-83, Secs. 4(b)(1), (2)(E), 5(a), Aug. 6, 1991,

105 Stat. 404-406; Pub. L. 103-446, title XII, Sec. 1201(a)(3),

Nov. 2, 1994, 108 Stat. 4682.)

-MISC1-

AMENDMENTS

1994 - Subsec. (a). Pub. L. 103-446 substituted "Administrator"

for "Secretary" before "of the Small Business Administration".

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1845 of this

title as this section.

Subsec. (a). Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted

"Secretary" for "Administrator" before "of the Small Business

Administration".

1989 - Pub. L. 101-237 substituted "Secretary" for

"Administrator" wherever appearing other than third place it

appears in subsec. (a).

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3742 of this title.

-End-

-CITE-

38 USC Sec. 3746 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

Sec. 3746. Maturity of loans

-STATUTE-

The maturity of a loan made or guaranteed under this subchapter

that is used in whole or in part for the construction, conversion,

or expansion of facilities or for acquisition of real property may

not exceed twenty years plus such additional reasonable time as the

Secretary may determine, at the time the loan is made, is required

to complete the construction, acquisition, or expansion of such

facilities. The maturity of any other loan made or guaranteed under

this subchapter may not exceed ten years.

-SOURCE-

(Added Pub. L. 97-72, title III, Sec. 302(a), Nov. 3, 1981, 95

Stat. 1058, Sec. 1846; amended Pub. L. 101-237, title III, Sec.

313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec. 3746,

Pub. L. 102-83, Sec. 5(a), Aug. 6, 1991, 105 Stat. 406.)

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83 renumbered section 1846 of this title as

this section.

1989 - Pub. L. 101-237 substituted "Secretary" for

"Administrator".

-End-

-CITE-

38 USC Sec. 3747 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

Sec. 3747. Eligible financial institutions

-STATUTE-

The Secretary may not guarantee under this subchapter a loan made

by an entity not subject to examination and supervision by an

agency of the United States or of a State.

-SOURCE-

(Added Pub. L. 97-72, title III, Sec. 302(a), Nov. 3, 1981, 95

Stat. 1058, Sec. 1847; amended Pub. L. 101-237, title III, Sec.

313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec. 3747,

Pub. L. 102-83, Sec. 5(a), Aug. 6, 1991, 105 Stat. 406.)

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83 renumbered section 1847 of this title as

this section.

1989 - Pub. L. 101-237 substituted "Secretary" for

"Administrator".

-End-

-CITE-

38 USC Sec. 3748 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

Sec. 3748. Preference for disabled veterans

-STATUTE-

In the extension of financial assistance under this subchapter,

the Secretary shall give preference, first, to veterans' small

business concerns in which disabled veterans who have successfully

completed a vocational rehabilitation program for self-employment

in a small business enterprise under chapter 31 of this title have

a significant ownership interest, and, second, to veterans' small

business concerns in which other disabled veterans have a

significant ownership interest.

-SOURCE-

(Added Pub. L. 97-72, title III, Sec. 302(a), Nov. 3, 1981, 95

Stat. 1058, Sec. 1848; amended Pub. L. 101-237, title III, Sec.

313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec. 3748,

Pub. L. 102-83, Sec. 5(a), Aug. 6, 1991, 105 Stat. 406.)

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83 renumbered section 1848 of this title as

this section.

1989 - Pub. L. 101-237 substituted "Secretary" for

"Administrator".

-End-

-CITE-

38 USC Sec. 3749 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

Sec. 3749. Revolving fund

-STATUTE-

(a) There is established in the Treasury a revolving fund to be

known as the "Department of Veterans Affairs Small Business Loan

Revolving Fund" (hereinafter in this section referred to as the

"fund").

(b) Amounts in the fund shall be available to the Secretary

without fiscal year limitation for all loan guaranty and direct

loan operations under this subchapter other than administrative

expenses and may not be used for any other purpose.

(c)(1) There is authorized to be appropriated to the fund a total

of $25,000,000.

(2) There shall be deposited into the fund all amounts received

by the Secretary derived from loan operations under this

subchapter, including all collection of principal and interest and

the proceeds from the use of property held or of property sold.

(d) The Secretary shall determine annually whether there has

developed in the fund a surplus which, in the Secretary's judgment,

is more than necessary to meet the needs of the fund. Any such

surplus shall immediately be transferred into the general fund of

the Treasury.

(e) Not later than two years after the termination of the

authority of the Secretary to make new commitments for financial

assistance under this subchapter, the Secretary shall transfer into

the general fund of the Treasury all amounts in the fund except

those that the Secretary determines may be required for the

liquidation of obligations under this subchapter. All amounts

received thereafter derived from loan operations under this

subchapter, except so much thereof as the Secretary may determine

to be necessary for liquidating outstanding obligations under this

subchapter, shall also be so deposited.

-SOURCE-

(Added Pub. L. 97-72, title III, Sec. 302(a), Nov. 3, 1981, 95

Stat. 1058, Sec. 1849; amended Pub. L. 99-576, title VII, Sec.

702(11), Oct. 28, 1986, 100 Stat. 3302; Pub. L. 101-237, title III,

Sec. 313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec. 3749

and amended Pub. L. 102-83, Secs. 4(a)(2)(B)(v), 5(a), Aug. 6,

1991, 105 Stat. 403, 406.)

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83, Sec. 5(a), renumbered section 1849 of this

title as this section.

Subsec. (a). Pub. L. 102-83, Sec. 4(a)(2)(B)(v), substituted

"Department of Veterans Affairs" for "Veterans' Administration".

1989 - Subsecs. (b) to (e). Pub. L. 101-237 substituted

"Secretary" and "Secretary's" for "Administrator" and

"Administrator's", respectively, wherever appearing.

1986 - Subsec. (c)(1). Pub. L. 99-576 substituted "There" for

"Effective for fiscal year 1982 and fiscal years thereafter,

there".

-End-

-CITE-

38 USC Sec. 3750 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

Sec. 3750. Incorporation of other provisions by the Secretary

-STATUTE-

The Secretary may provide that the provisions of sections of

other subchapters of this chapter that are not otherwise applicable

to loans made or guaranteed under this subchapter shall be

applicable to loans made or guaranteed under this subchapter. The

Secretary shall exercise authority under the preceding sentence by

regulations prescribed after publication in the Federal Register

and a period of not less than thirty days for public comment.

-SOURCE-

(Added Pub. L. 97-72, title III, Sec. 302(a), Nov. 3, 1981, 95

Stat. 1059, Sec. 1850; amended Pub. L. 101-237, title III, Sec.

313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec. 3750,

Pub. L. 102-83, Sec. 5(a), Aug. 6, 1991, 105 Stat. 406.)

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83 renumbered section 1850 of this title as

this section.

1989 - Pub. L. 101-237 substituted "Secretary" for

"Administrator" in section catchline and wherever appearing in

text.

-End-

-CITE-

38 USC Sec. 3751 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER IV - SMALL BUSINESS LOANS

-HEAD-

Sec. 3751. Termination of program

-STATUTE-

The Secretary may not make commitments for financial assistance

under this subchapter after September 30, 1986.

-SOURCE-

(Added Pub. L. 97-72, title III, Sec. 302(a), Nov. 3, 1981, 95

Stat. 1059, Sec. 1851; amended Pub. L. 101-237, title III, Sec.

313(b)(1), Dec. 18, 1989, 103 Stat. 2077; renumbered Sec. 3751,

Pub. L. 102-83, Sec. 5(a), Aug. 6, 1991, 105 Stat. 406.)

-MISC1-

AMENDMENTS

1991 - Pub. L. 102-83 renumbered section 1851 of this title as

this section.

1989 - Pub. L. 101-237 substituted "Secretary" for

"Administrator".

-End-

-CITE-

38 USC SUBCHAPTER V - NATIVE AMERICAN VETERAN HOUSING

LOAN PILOT PROGRAM 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER V - NATIVE AMERICAN VETERAN HOUSING LOAN PILOT PROGRAM

-HEAD-

SUBCHAPTER V - NATIVE AMERICAN VETERAN HOUSING LOAN PILOT PROGRAM

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 3722, 3736 of this

title.

-End-

-CITE-

38 USC Sec. 3761 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER V - NATIVE AMERICAN VETERAN HOUSING LOAN PILOT PROGRAM

-HEAD-

Sec. 3761. Pilot program

-STATUTE-

(a) The Secretary shall establish and implement a pilot program

under which the Secretary may make direct housing loans to Native

American veterans. The purpose of such loans is to permit such

veterans to purchase, construct, or improve dwellings on trust

land. The Secretary shall establish and implement the pilot program

in accordance with the provisions of this subchapter.

(b) In carrying out the pilot program under this subchapter, the

Secretary shall, to the extent practicable, make direct housing

loans to Native American veterans who are located in a variety of

geographic areas and in areas experiencing a variety of economic

circumstances.

(c) No loans may be made under this subchapter after December 31,

2005.

-SOURCE-

(Added Pub. L. 102-547, Sec. 8(a), Oct. 28, 1992, 106 Stat. 3636;

amended Pub. L. 105-114, title II, Sec. 201(a), Nov. 21, 1997, 111

Stat. 2282; Pub. L. 107-103, title IV, Sec. 402(a), Dec. 27, 2001,

115 Stat. 993.)

-MISC1-

AMENDMENTS

2001 - Subsec. (c). Pub. L. 107-103 substituted "December 31,

2005" for "December 31, 2001".

1997 - Subsec. (c). Pub. L. 105-114 substituted "December 31,

2001" for "September 30, 1997".

CONSULTATION WITH ADVISORY COMMITTEE ON NATIVE-AMERICAN VETERANS

Section 8(b) of Pub. L. 102-547 provided that: "In carrying out

the direct housing loan pilot program authorized under subchapter V

of chapter 37 of title 38, United States Code (as added by

subsection (a)), the Secretary of Veterans Affairs shall consider

the views and recommendations, if any, of the Advisory Committee on

Native-American Veterans established under section 19032 of the

Veterans' Health-Care Amendments of 1986 [formerly set out as a

note under former section 219 of this title] (title XIX of Public

Law 99-272; 100 Stat. 388)."

ANNUAL REPORTS ON PILOT PROGRAM

Section 8(d) of Pub. L. 102-547 directed Secretary of Veterans

Affairs to transmit report relating to implementation of Native

American veterans direct housing loan pilot program established

under this subchapter to Committees on Veterans' Affairs of Senate

and House of Representatives not later than Feb. 1 of each of years

1994 through 1998, prior to repeal by Pub. L. 104-110, title II,

Sec. 201(b), Feb. 13, 1996, 110 Stat. 770.

AUTHORIZATION OF APPROPRIATIONS FOR NATIVE AMERICAN VETERAN HOUSING

LOANS

Section 8(e) of Pub. L. 102-547 provided that: "New direct loan

obligations for Native American veteran housing loans under

subchapter V of chapter 37 of title 38, United States Code (as

added by subsection (a)), may be incurred only to the extent that

appropriations of budget authority to cover the anticipated cost,

as defined in section 502 of the Congressional Budget Act of 1974

[2 U.S.C. 661a], for such loans are made in advance. There is

authorized to be appropriated for such purpose $5,000,000 for

fiscal year 1993, which amount shall remain available without

fiscal year limitation."

-End-

-CITE-

38 USC Sec. 3762 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER V - NATIVE AMERICAN VETERAN HOUSING LOAN PILOT PROGRAM

-HEAD-

Sec. 3762. Direct housing loans to Native American veterans

-STATUTE-

(a) The Secretary may make a direct housing loan to a Native

American veteran if -

(1)(A) the Secretary has entered into a memorandum of

understanding with respect to such loans with the tribal

organization that has jurisdiction over the veteran; or

(B) the tribal organization that has jurisdiction over the

veteran has entered into a memorandum of understanding with any

department or agency of the United States with respect to direct

housing loans to Native Americans that the Secretary determines

substantially complies with the requirements of subsection (b);

and

(2) the memorandum is in effect when the loan is made.

(b)(1) Subject to paragraph (2), the Secretary shall ensure that

each memorandum of understanding that the Secretary enters into

with a tribal organization shall provide for the following:

(A) That each Native American veteran who is under the

jurisdiction of the tribal organization and to whom the Secretary

makes a direct loan under this subchapter -

(i) holds, possesses, or purchases using the proceeds of the

loan a meaningful interest in a lot or dwelling (or both) that

is located on trust land; and

(ii) will purchase, construct, or improve (as the case may

be) a dwelling on the lot using the proceeds of the loan.

(B) That each such Native American veteran will convey to the

Secretary by an appropriate instrument the interest referred to

in subparagraph (A) as security for a direct housing loan under

this subchapter.

(C) That the tribal organization and each such Native American

veteran will permit the Secretary to enter upon the trust land of

that organization or veteran for the purposes of carrying out

such actions as the Secretary determines are necessary -

(i) to evaluate the advisability of the loan; and

(ii) to monitor any purchase, construction, or improvements

carried out using the proceeds of the loan.

(D) That the tribal organization has established standards and

procedures that apply to the foreclosure of the interest conveyed

by a Native American veteran pursuant to subparagraph (B),

including -

(i) procedures for foreclosing the interest; and

(ii) procedures for the resale of the lot or the dwelling (or

both) purchased, constructed, or improved using the proceeds of

the loan.

(E) That the tribal organization agrees to such other terms and

conditions with respect to the making of direct loans to Native

American veterans under the jurisdiction of the tribal

organization as the Secretary may require in order to ensure that

the pilot program established under this subchapter is

implemented in a responsible and prudent manner.

(2) The Secretary may not enter into a memorandum of

understanding with a tribal organization under this subsection

unless the Secretary determines that the memorandum provides for

such standards and procedures as are necessary for the reasonable

protection of the financial interests of the United States.

(c)(1)(A) Except as provided in subparagraph (B), the principal

amount of any direct housing loan made to a Native American under

this section may not exceed $80,000.

(B) The Secretary may make loans exceeding the amount specified

in subparagraph (A) in a geographic area if the Secretary

determines that housing costs in the area are significantly higher

than average housing costs nationwide. The amount of such increase

shall be the amount that the Secretary determines is necessary in

order to carry out the pilot program under this subchapter in a

manner that demonstrates the advisability of making direct housing

loans to Native American veterans who are located in a variety of

geographic areas and in geographic areas experiencing a variety of

economic conditions.

(2) Loans made under this section shall bear interest at a rate

determined by the Secretary, which rate may not exceed the

appropriate rate authorized for guaranteed loans under section

3703(c)(1) or section 3712(f) of this title, and shall be subject

to such requirements or limitations prescribed for loans guaranteed

under this title as the Secretary may prescribe.

(3) Notwithstanding section 3704(a) of this title, the Secretary

shall establish minimum requirements for planning, construction,

improvement, and general acceptability relating to any direct loan

made under this section.

(d)(1) The Secretary shall establish credit underwriting

standards to be used in evaluating loans made under this

subchapter. In establishing such standards, the Secretary shall

take into account the purpose of this program to make available

housing to Native American veterans living on trust lands.

(2) The Secretary shall determine the reasonable value of the

interest in property that will serve as security for a loan made

under this section and shall establish procedures for appraisals

upon which the Secretary may base such determinations. The

procedures shall incorporate generally the relevant requirements of

section 3731 of this title, unless the Secretary determines that

such requirements are impracticable to implement in a geographic

area, on particular trust lands, or under circumstances specified

by the Secretary.

(e) Loans made under this section shall be repaid in monthly

installments.

(f) In connection with any loan under this section, the Secretary

may make advances in cash to provide for repairs, alterations, and

improvements and to meet incidental expenses of the loan

transaction. The Secretary shall determine the amount of any

expenses incident to the 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) Without regard to any provision of this chapter (other than a

provision of this section), the Secretary may -

(1) take any action that the Secretary determines to be

necessary with respect to the custody, management, protection,

and realization or sale of investments under this section;

(2) determine any necessary expenses and expenditures and the

manner in which such expenses and expenditures shall be incurred,

allowed, and paid;

(3) make such rules, regulations, and orders as the Secretary

considers necessary for carrying out the Secretary's functions

under this section; and

(4) in a manner consistent with the provisions of this chapter

and with the Secretary's functions under this subchapter, employ,

utilize, and compensate any persons, organizations, or

departments or agencies (including departments and agencies of

the United States) designated by the Secretary to carry out such

functions.

(h)(1) The Secretary may make direct loans to Native American

veterans in order to enable such veterans to refinance existing

loans made under this section.

(2)(A) The Secretary may not make a loan under this subsection

unless the loan meets the requirements set forth in subparagraphs

(B), (C), and (E) of paragraph (1) of section 3710(e) of this

title.

(B) The Secretary may not make a loan under this subsection

unless the loan will bear an interest rate at least one percentage

point less than the interest rate borne by the loan being

refinanced.

(C) Paragraphs (2) and (3) of such section 3710(e) shall apply to

any loan made under this subsection, except that for the purposes

of this subsection the reference to subsection (a)(8) of section

3710 of this title in such paragraphs (2) and (3) shall be deemed

to be a reference to this subsection.

(i)(1) The Secretary shall, in consultation with tribal

organizations (including the National Congress of American Indians

and the National American Indian Housing Council), carry out an

outreach program to inform and educate Native American veterans of

the pilot program provided for under this subchapter and the

availability of direct housing loans for Native American veterans

who live on trust lands.

(2) Activities under the outreach program shall include the

following:

(A) Attending conferences and conventions conducted by the

National Congress of American Indians in order to work with the

National Congress in providing information and training to tribal

organizations and Native American veterans regarding the

availability of housing benefits under the pilot program and in

assisting such organizations and veterans in participating in the

pilot program.

(B) Attending conferences and conventions conducted by the

National American Indian Housing Council in order to work with

the Housing Council in providing information and training to

tribal organizations and tribal housing entities regarding the

availability of such benefits.

(C) Attending conferences and conventions conducted by the

Department of Hawaiian Homelands in order to work with the

Department of Hawaiian Homelands in providing information and

training to tribal housing entities in Hawaii regarding the

availability of such benefits.

(D) Producing and disseminating information to tribal

governments, tribal veterans service organizations, and tribal

organizations regarding the availability of such benefits.

(E) Assisting tribal organizations and Native American veterans

in participating in the pilot program.

(F) Outstationing loan guarantee specialists in tribal

facilities on a part-time basis if requested by the tribal

government.

(j) Not later than February 1 of each year through 2006, the

Secretary shall transmit to the Committees on Veterans' Affairs of

the Senate and House of Representatives a report relating to the

implementation of the pilot program under this subchapter during

the fiscal year preceding the date of the report. Each such report

shall include the following:

(1) The Secretary's exercise during such fiscal year of the

authority provided under subsection (c)(1)(B) to make loans

exceeding the maximum loan amount.

(2) The appraisals performed for the Secretary during such

fiscal year under the authority of subsection (d)(2), including a

description of -

(A) the manner in which such appraisals were performed;

(B) the qualifications of the appraisers who performed such

appraisals; and

(C) the actions taken by the Secretary with respect to such

appraisals to protect the interests of veterans and the United

States.

(3) The outreach activities undertaken under subsection (i)

during such fiscal year, including -

(A) a description of such activities on a region-by-region

basis; and

(B) an assessment of the effectiveness of such activities in

encouraging the participation of Native American veterans in

the pilot program.

(4) The pool of Native American veterans who are eligible for

participation in the pilot program, including -

(A) a description and analysis of the pool, including income

demographics;

(B) a description and assessment of the impediments, if any,

to full participation in the pilot program of the Native

American veterans in the pool; and

(C) the impact of low-cost housing programs operated by the

Department of Housing and Urban Development and other Federal

or State agencies on the demand for direct loans under this

section.

(5) The Secretary's recommendations, if any, for additional

legislation regarding the pilot program.

-SOURCE-

(Added Pub. L. 102-547, Sec. 8(a), Oct. 28, 1992, 106 Stat. 3637;

amended Pub. L. 104-275, title II, Sec. 202(a), Oct. 9, 1996, 110

Stat. 3330; Pub. L. 105-114, title II, Sec. 201(b), (c), Nov. 21,

1997, 111 Stat. 2282, 2283; Pub. L. 107-103, title IV, Sec. 402(b),

(c), Dec. 27, 2001, 115 Stat. 993.)

-MISC1-

AMENDMENTS

2001 - Subsec. (a)(1). Pub. L. 107-103, Sec. 402(b), designated

existing provisions as subpar. (A), substituted "; or" for "; and",

and added subpar. (B).

Subsec. (j). Pub. L. 107-103, Sec. 402(c), substituted "2006" for

"2002" in introductory provisions.

1997 - Subsec. (i). Pub. L. 105-114, Sec. 201(b), designated

existing provisions as par. (1), inserted ", in consultation with

tribal organizations (including the National Congress of American

Indians and the National American Indian Housing Council)," after

"the Secretary shall", struck out "tribal organizations and" after

"educate", and added par. (2).

Subsec. (j). Pub. L. 105-114, Sec. 201(c), added subsec. (j).

1996 - Subsecs. (h), (i). Pub. L. 104-275 added subsec. (h) and

redesignated former subsec. (h) as (i).

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3729 of this title.

-End-

-CITE-

38 USC Sec. 3763 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER V - NATIVE AMERICAN VETERAN HOUSING LOAN PILOT PROGRAM

-HEAD-

Sec. 3763. Native American Veteran Housing Loan Program Account

-STATUTE-

(a) There is hereby established in the Treasury of the United

States an account known as the "Native American Veteran Housing

Loan Program Account" (hereinafter in this subchapter referred to

as the "Account").

(b) The Account shall be available to the Secretary to carry out

all operations relating to the making of direct housing loans to

Native American veterans under this subchapter, including any

administrative expenses relating to the making of such loans.

Amounts in the Account shall be available without fiscal year

limitation.

-SOURCE-

(Added Pub. L. 102-547, Sec. 8(a), Oct. 28, 1992, 106 Stat. 3639;

amended Pub. L. 105-368, title VI, Sec. 602(e)(3)(B), Nov. 11,

1998, 112 Stat. 3347; Pub. L. 107-14, Sec. 8(a)(16), June 5, 2001,

115 Stat. 35.)

-MISC1-

AMENDMENTS

2001 - Subsec. (a). Pub. L. 107-14 substituted "hereinafter" for

"hereafter".

1998 - Pub. L. 105-368 substituted "Native American Veteran

Housing Loan Program Account" for "Housing loan program account" in

section catchline.

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.

-End-

-CITE-

38 USC Sec. 3764 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

SUBCHAPTER V - NATIVE AMERICAN VETERAN HOUSING LOAN PILOT PROGRAM

-HEAD-

Sec. 3764. Definitions

-STATUTE-

For the purposes of this subchapter -

(1) The term "trust land" means any land that -

(A) is held in trust by the United States for Native

Americans;

(B) is subject to restrictions on alienation imposed by the

United States on Indian lands (including native Hawaiian

homelands);

(C) is owned by a Regional Corporation or a Village

Corporation, as such terms are defined in section 3(g) and 3(j)

of the Alaska Native Claims Settlement Act, respectively (43

U.S.C. 1602(g), (j)); or

(D) is on any island in the Pacific Ocean if such land is, by

cultural tradition, communally-owned land, as determined by the

Secretary.

(2) The term "Native American veteran" means any veteran who is

a Native American.

(3) The term "Native American" means -

(A) an Indian, as defined in section 4(d) of the Indian

Self-Determination and Education Assistance Act (25 U.S.C.

450b(d));

(B) a native Hawaiian, as that term is defined in section

201(a)(7) of the Hawaiian Homes Commission Act, 1920 (Public

Law 67-34; 42 Stat. 108);

(C) an Alaska Native, within the meaning provided for the

term "Native" in section 3(b) of the Alaska Native Claims

Settlement Act (43 U.S.C. 1602(b)); and

(D) a Pacific Islander, within the meaning of the Native

American Programs Act of 1974 (42 U.S.C. 2991 et seq.).

(4) The term "tribal organization" shall have the meaning given

such term in section 4(l) of the Indian Self-Determination and

Education Assistance Act (25 U.S.C. 450b(l)) and shall include

the Department of Hawaiian Homelands, in the case of native

Hawaiians, and such other organizations as the Secretary may

prescribe.

-SOURCE-

(Added Pub. L. 102-547, Sec. 8(a), Oct. 28, 1992, 106 Stat. 3639.)

-REFTEXT-

REFERENCES IN TEXT

Section 201(a)(7) of the Hawaiian Homes Commission Act, 1920,

referred to in par. (3)(B), was classified to section 692 of Title

48, Territories and Insular Possessions, and was omitted from the

Code.

The Native American Programs Act of 1974, referred to in par.

(3)(D), is title VIII of Pub. L. 88-452, as added by Pub. L.

93-644, Sec. 11, Jan. 4, 1975, 88 Stat. 2324, which is classified

generally to subchapter VIII (Sec. 2991 et seq.) of chapter 34 of

Title 42, The Public Health and Welfare. For complete

classification of this Act to the Code, see section 2991 of Title

42 and Tables.

-End-

-CITE-

38 USC [SUBCHAPTER VI - TRANSFERRED] 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

[SUBCHAPTER VI - TRANSFERRED]

-HEAD-

[SUBCHAPTER VI - TRANSFERRED]

-COD-

CODIFICATION

Former subchapter VI of this chapter, other than section 3771,

was transferred to subchapter VI of chapter 20 of this title and

inserted after section 2043 of this title, and sections 3772 to

3775 were renumbered sections 2051 to 2054 of this title,

respectively, by Pub. L. 107-95, Sec. 5(d)(1), Dec. 21, 2001, 115

Stat. 918.

-End-

-CITE-

38 USC Sec. 3771 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

[SUBCHAPTER VI - TRANSFERRED]

-HEAD-

[Sec. 3771. Repealed. Pub. L. 107-95, Sec. 5(d)(3), Dec. 21, 2001,

115 Stat. 918]

-MISC1-

Section, added Pub. L. 105-368, title VI, Sec. 601(a), Nov. 11,

1998, 112 Stat. 3342; amended Pub. L. 106-400, Sec. 2, Oct. 30,

2000, 114 Stat. 1675, defined terms "veteran", "homeless veteran",

and "homeless individual", for purposes of this subchapter.

-End-

-CITE-

38 USC Secs. 3772 to 3775 01/06/03

-EXPCITE-

TITLE 38 - VETERANS' BENEFITS

PART III - READJUSTMENT AND RELATED BENEFITS

CHAPTER 37 - HOUSING AND SMALL BUSINESS LOANS

[SUBCHAPTER VI - TRANSFERRED]

-HEAD-

[Secs. 3772 to 3775. Renumbered Secs. 2051 to 2054]

-STATUTE-

-End-