cfr_sections
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190 rows where part_number = 36 and title_number = 38 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 38:38:2.0.1.1.10.1.345.1 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4201 Applicability of the § 36.4200 series. | VA | The § 36.4200 series shall be applicable to each loan entitled to guaranty under 38 U.S.C. 3712 on or after the date of publication thereof in the Federal Register. | |||||
| 38:38:2.0.1.1.10.1.345.10 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4210 Joint loans. | VA | [44 FR 22725, Apr. 17, 1979, as amended at 55 FR 37473, Sept. 12, 1990] | (a) Except as provided in paragraph (b) of this section, the prior approval of the Secretary is required in respect to any manufactured home loan to be made to two or more borrowers who become jointly and severally liable, or jointly liable therefor, and who will acquire an undivided interest in the property to be purchased or who will otherwise share in the proceeds of the loan, or in respect to any loan to be made to an eligible veteran whose interest in the property owned, or to be acquired with the loan proceeds, is an undivided interest only. The amount of the guaranty shall be computed in such cases only on that portion of the loan allocable to the eligible veteran which, taking into consideration all relevant factors, represents the proper contribution of the veteran to the transaction. Such loans shall be secured to the extent required by 38 U.S.C. chapter 37 and the regulations concerning guaranty of manufactured home loans to veterans. (b) Notwithstanding the provisions of paragraph (a) of this section, the joinder of the spouse of a veteran-borrower in the ownership of property shall not require prior approval or preclude the issuance of a guaranty based upon the entire amount of the loan. If both spouses be eligible veterans, either or both, within permissible maxima, may utilize available guaranty entitlement. (c) For the purpose of determining the rights and the liabilities of the Secretary with respect to a loan subject to paragraph (a) of this section, credits legally applicable to the entire loan shall be applied as follows: (1) Prepayments made expressly for credit to that portion of the indebtedness allocable to the veteran shall be applied to such portion of the indebtedness. All other payments shall be applied ratably to those portions of the loan allocable respectively to the veteran and to the other debtors. (2) Proceeds of the sale or other liquidation of the security shall be applied ratably to the respective portions of the loan, such portion of the proceeds as represents the interes… | ||||
| 38:38:2.0.1.1.10.1.345.11 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4211 Amortization—prepayment. | VA | (a) To be eligible for guaranty under 38 U.S.C. 3712 a loan shall be amortized fully within the term of the loan in accordance with any generally recognized plan of amortization requiring approximately equal monthly payments. The loan shall not be payable on demand or at sight or presentation, or at a time not specified or computable from the language in the evidence of indebtedness, or on a renewal basis at the option of the holder. The first payment may be deferred not longer than 2 months from the date the loan is closed. (b) No guaranteed loan security instrument shall contain any provision giving the holder a right to declare the loan due or otherwise to declare a default if the holder “shall feel insecure” or upon the occurrence of any similar condition at the holder's option, without regard to any act or omission by the debtor. (c) The debtor shall have the right, without penalty or fee, to prepay all or not less than one installment of the indebtedness at any time. Credit for any partial prepayment made on other than an installment due date may be postponed to the next installment due date. The holder and the debtor may agree at any time that any prepayment not previously applied in satisfaction of matured installments shall be reapplied for the purpose of curing or preventing any subsequent default. Any prepayment in full of the indebtedness (unpaid principal balance plus earned interest) shall be credited on the date received. In determining the amount required to prepay the indebtedness in full the holder of the loan shall exclude all unearned interest or discount. (d) Subject to paragraph (a) of this section any amounts which under the terms of a loan do not become due and payable on or before the last maturity date permissible for loans of its class under the limitations contained in § 36.4204 shall automatically fall due on such date. | |||||
| 38:38:2.0.1.1.10.1.345.12 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4212 Interest rates and late charges. | VA | [60 FR 38257, July 26, 1995] | (a) In guaranteeing or insuring loans under 38 U.S.C. chapter 37, the Secretary may elect to require that such loans either bear interest at a rate that is agreed upon by the veteran and the lender, or bear interest at a rate not in excess of a rate established by the Secretary. The Secretary may, from time to time, change that election by publishing a notice in the Federal Register. Provided, however, that the interest rate of a loan for the purpose of an interest rate reduction under 38 U.S.C. 3712(a)(1)(F) must be less than the interest rate of the VA loan being refinanced. This paragraph (a) does not apply in the case of an adjustable rate mortgage being refinanced with a fixed rate loan. (b) For loans bearing an interest rate agreed upon by the veteran and the lender, the veteran may pay reasonable discount points in connection with the loan. The discount points may not be included in the loan amount, except for interest rate reduction refinancing loans under 38 U.S.C. 3712(a)(1)(F). (c) The rate of interest in instruments securing the indebtedness for all loans may be expressed in terms of add-on or discount. (d) Interest in excess of the rate reported by the lender when requesting evidence of guaranty or insurance shall not be payable on any advance, or in the event of any delinquency or default; Provided, that a late charge not in excess of an amount equal to 4 percent of any installment paid more than 15 days after due date shall not be considered a violation of this limitation. (e) Adjustable rate mortgage loans which comply with the requirements of this paragraph are eligible for guaranty. (1) Interest rate index. Changes in the interest rate charged on an adjustable rate mortgage must correspond to changes in the weekly average yield on one year (52 week) Treasury bills adjusted to a constant maturity. Yields on one year Treasury bills at “constant maturity” are interpolated by the United States Treasury from the daily yield curve. This curve, which relates the yield on the security to its … | ||||
| 38:38:2.0.1.1.10.1.345.13 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4213 Capacity of parties. | VA | Nothing in the § 36.4200 series shall be construed to relieve any lender of responsibility for any loss caused by lack of legal capacity of any person to contract, sell, convey or encumber, or by the existence of other legal disability or defects invalidating or rendering unenforceable in whole or in part either the loan obligation or the security therefor. | |||||
| 38:38:2.0.1.1.10.1.345.14 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4214 Geographical limits. | VA | [46 FR 43670, Aug. 31, 1981, as amended at 48 FR 1717, Jan. 14, 1983] | The site for any manufactured home purchased with a guaranteed loan must be located within the United States of America, which for the purposes of 38 U.S.C. 3712 comprises the several States, the Territories and possessions of the United States, the District of Columbia, the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands. | ||||
| 38:38:2.0.1.1.10.1.345.15 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4215 Maintenance of records. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 40 FR 13214, Mar. 25, 1975; 55 FR 34913, Aug. 27, 1990] | (a) The holder shall maintain a record of the amounts of payments received on the obligation and disbursements chargeable thereto and the dates thereof. This record shall be maintained until the Secretary ceases to be liable as guarantor of the loan. For the purpose of any accounting with the Secretary or computation of claim against the Secretary, any holder who fails to maintain such record shall be presumed to have received on the dates due all sums which by the terms of the contract are payable prior to date of claim, and the burden of going forward with evidence and of ultimate proof of the contrary shall be on such holder. (b) The lender shall retain copies of all loan origination records on VA guaranteed loan for at least one year from the date of loan closing. Loan origination records include the loan application, including any preliminary application, verifications of employment and deposit, all credit reports, including preliminary credit reports, copies of each sales contract and addendums, letters of explanation for adverse credit items, discrepancies and the like, direct references from creditors, correspondence with employers, appraisal reports, reports on other inspections of the property, and all closing papers and documents. (c) The Secretary has the right to inspect, examine, or audit, at a reasonable time and place, the records or accounts of a lender or holder pertaining to loans guaranteed by the Secretary. | ||||
| 38:38:2.0.1.1.10.1.345.16 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4217 Delivery of notice. | VA | [58 FR 29114, May 19, 1993] | Any notice required by the § 36.4200 series to be given the Secretary must be in writing or such other communications medium as may be approved by an official designated in § 36.4221(b) and delivered, by mail or otherwise, to the VA office at which the guaranty was issued, or to any changed address of which the holder has been given notice. Such notice must plainly identify the case by setting forth the name of the original veteran-obligor and the file number assigned to the case by the Secretary, if available, or otherwise the name and serial number of the veteran. If mailed, the notice shall be by certified mail when so provided by the § 36.4200 series. This section does not apply to legal process. (See § 36.4282.) | ||||
| 38:38:2.0.1.1.10.1.345.17 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4218 Payment in full; termination of guaranty. | VA | Upon full satisfaction of a guaranteed loan by payment or otherwise the instrument evidencing the guaranty shall be returned to the Department of Veterans Affairs office issuing the same with the holder's cancellation or endorsement of release thereon. | |||||
| 38:38:2.0.1.1.10.1.345.18 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4219 Incorporation by reference. | VA | Department of Veterans Affairs regulations issued under 38 U.S.C. 3712, and in effect on the date of any loan which is submitted and accepted or approved for a guaranty thereunder, shall govern the rights, duties, and liabilities of the parties to such loan and any provisions of the loan instruments inconsistent with such regulations are hereby amended and supplemented to conform thereto. | |||||
| 38:38:2.0.1.1.10.1.345.19 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4220 Substantive and procedural requirements; waiver. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 46 FR 43670, Aug. 31, 1981; 49 FR 13352, Apr. 4, 1984; 55 FR 37473, Sept. 12, 1990; 61 FR 28058, June 4, 1996] | (a) Notwithstanding any requirement, condition, or limitation stated in or imposed by the regulations concerning the guaranty of manufactured home loans to veterans, the Under Secretary for Benefits, or the Executive Director, Loan Guaranty Service, within the limitations and conditions prescribed by the Secretary, is hereby authorized, if the Under Secretary for Benefits or Executive Director, Loan Guaranty Service finds the interests of the Government are not adversely affected, to relieve undue prejudice to a debtor, holder, or other person, which might otherwise result, provided no such action may be taken which would impair the vested rights of any person affected thereby. If such requirement, condition, or limitation is of an administrative or procedural (not substantive) nature, any employee designated in § 36.4221 is hereby authorized to grant similar relief if the designated employee finds the failure or error of the lender was due to misunderstanding or mistake and that the interests of the Government are not adversely affected. Provisions of the regulations considered to be of an administrative or procedural (nonsubstantive) nature are limited to the following: (1) The requirement in § 36.4209(b) that a lender originating a loan under a certificate of commitment report the loan for issuance of guaranty evidence within 60 days following actual payment of the full proceeds of the loan. In such cases it is not necessary that a finding be made that the loan is not in default. (2) The requirements in § 36.4209(h) of this part concerning the giving of notice in assumption cases under 38 U.S.C. 3714. (3) The requirement in § 36.4279 that a holder promptly forward an advice of the terms of any agreement effecting a reamortization or extension of a loan. (4) The requirement in § 36.4280 concerning the giving of notice of default. (5) The requirement in § 36.4280 that a holder give 30 days advance notice of its intention to foreclose or repossess the security. (6) The requirement in § 36.4282 that a holder… | ||||
| 38:38:2.0.1.1.10.1.345.2 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4202 Definitions. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 40 FR 13212, Mar. 25, 1975; 43 FR 37197, Aug. 22, 1978; 44 FR 22723, Apr. 17, 1979; 48 FR 40227, Sept. 6, 1983; 50 FR 13193, Apr. 3, 1985; 54 FR 34988, Aug. 23, 1989; 55 FR 37471, Sept. 12, 1990; 58 FR 29114, May 19, 1993; 58 FR 37858, July 14, 1993] | Wherever used in 38 U.S.C. 3712 or the § 36.4200 series, unless the context otherwise requires, the terms defined in this section shall have the meaning herein stated. Automatic lender. A lender that may process a loan or assumption without submitting the credit package to the Department of Veterans Affairs for underwriting review. Pursuant to 38 U.S.C. 3702(d) there are two categories of lenders who may process loans automatically: (1) Entities such as banks, savings and loan associations, and mortgage and loan companies that are subject to examinations by an agency of the United States or any State and (2) lenders approved by the Department of Veterans Affairs pursuant to standards established by the Department of Veterans Affairs. Credit package. Any information, report of verifications used by a lender, holder or authorized servicing agent to determine the creditworthiness of an applicant for a Department of Veterans Affairs guaranteed loan or the assumer of such a loan. Date of first uncured default. The due date of the earliest payment not fully satisfied by the proper application or available credits or deposits. Default. Failure of a borrower to comply with the terms of a loan agreement. Guaranty. The obligation of the United States, assumed by virtue of 38 U.S.C. 3712, to repay a specified percentage of a loan upon default of the primary debtor, which guaranty payment shall be made after liquidation of the security for the loan and an accounting with the Secretary. Holder. The lender or any subsequent assignee or transferee of the guaranteed obligation or the authorized servicing agent of the lender or of the assignee or transferee if the obligation has been assigned or transferred. Indebtedness. The unpaid principal and interest plus any other amounts allowable under the terms of a loan including those authorized by statute and consistent with the § 36.4200 series, which have been paid and debited to the loan account. Unpaid late charges may not be included in the indebtedness. Lender. T… | ||||
| 38:38:2.0.1.1.10.1.345.20 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4221 Delegation of authority. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 40 FR 13214, Mar. 25, 1975; 44 FR 16014, Mar. 16, 1979; 45 FR 21243, Apr. 1, 1980; 46 FR 43671, Aug. 31, 1981; 49 FR 13352, Apr. 4, 1984; 61 FR 28058, June 4, 1996; 86 FR 51275, Sept. 15, 2021] | (a) Except as hereinafter provided, each employee of the Department of Veterans Affairs heretofore or hereafter appointed to, or lawfully filling, any position designated in paragraph (b) of this section is hereby delegated authority, within the limitations and conditions prescribed by law, to exercise the powers and functions of the Secretary with respect to the guaranty of manufactured home loans and the rights and liabilities arising therefrom, including but not limited to the adjudication and allowance, disallowance, and compromise of claims; the collection or compromise of amounts due, in money or other property; the extension, rearrangement, or acquisition of loans; the management and disposition of secured and unsecured notes and other property; and those functions expressly or impliedly embraced within paragraphs (2) to (6), inclusive, of 38 U.S.C. 3720(a). Incidental to the exercise and performance of the powers and functions hereby delegated, each such employee is authorized to execute and deliver (with or without acknowledgment) for, and on behalf of, the Secretary, evidence of guaranty and such certificates, forms, conveyances, and other instruments as may be appropriate in connection with the acquisition, ownership, management, sale, transfer, assignment, encumbrance, rental, or other disposition of real or personal property, or of any right, title, or interest therein, including, but not limited to, contracts of sale, installment contracts, deeds, leases, bills of sale, assignments, and releases; and to approve disbursements to be made for any purpose authorized by 38 U.S.C. chapter 37. (b) Designated positions: Under Secretary for Benefits. Executive Director, Loan Guaranty Service. Director, Regional Office. Director, Medical and Regional Office Center. Director, VA Regional Office and Insurance Center. Loan Guaranty Officer. Assistant Loan Guaranty Officer. Under Secretary for Benefits. Executive Director, Loan Guaranty Service. Director, Regional Office. Director, Medical… | ||||
| 38:38:2.0.1.1.10.1.345.21 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4222 Hazard insurance. | VA | [58 FR 37859, July 14, 1993, as amended at 62 FR 5531, Feb. 6, 1997] | (a) The holder shall require insurance policies to be procured and maintained in an amount sufficient to protect the security against risks or hazards to which it may be subjected to the extent customary in the locality. The costs of such required insurance coverage may be paid for by the veteran. Only the costs for one year may be included in the loan amount. (1) Flood insurance will be required on any manufactured home, building or personal property securing a loan at any time during the term of the loan that such security is located in an area identified by the Federal Emergency Management Agency as having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act, as amended. The amount of flood insurance must be at least equal to the lesser of the outstanding principal balance of the loan or the maximum limit of coverage available for the particular type of property under the National Flood Insurance Act, as amended. The Secretary cannot guarantee a loan for the acquisition or construction of property located in an area identified by the Federal Emergency Management Agency as having special flood hazards unless the community in which such area is situated is then participating in the National Flood Insurance Program. (2) Broad Lender's Protection Insurance or its equivalent is required to protect against loss for any items missing from the manufactured home at time of repossession and to cover repossession expenses including, but not limited to, breakdown and transport charges, permit and export fees, and an amount, limited by the Secretary, of unpaid park rent. (b) All monies under such policies covering payment of insured losses shall be applied to restoration of the security or to the loan balance. | ||||
| 38:38:2.0.1.1.10.1.345.22 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4223 Interest rate reduction refinancing loan. | VA | [46 FR 43671, Aug. 31, 1981, as amended at 48 FR 40229, Sept. 6, 1983; 58 FR 37860, July 14, 1993; 60 FR 38258, July 26, 1995; 61 FR 7415, Feb. 28, 1996] | (a) A veteran may refinance [38 U.S.C. 3712(a)(1)(F)] an existing Department of Veterans Affairs guaranteed loan to reduce the interest rate payable on the Department of Veterans Affairs loan provided the following requirements are met: (1) The loan application must be submitted to the Secretary for prior approval unless the veteran is not charged a discount, in which case the loan application may be processed on the automatic basis; (2) The loan must be secured by the same real property and/or personal property as the loan being refinanced and the veteran must own the manufactured home and/or manufactured home lot securing the loan; and (i) Presently occupy or have previously occupied the manufactured home, a manufactured home on the lot securing the loan, or the manufactured home and the lot securing the loan as his or her home and must certify in such form as the Secretary shall prescribe that the veteran presently or has previously so occupied the manufactured home or a manufactured home on the lot; or (ii) When a veteran is on Active Duty status as a member of the Armed Forces and is unable to occupy the manufactured home or a manufactured home on the lot securing the loan as a home because of such status, the veteran's spouse must occupy or must have previously occupied the manufactured home or a manufactured home on the lot as the spouse's home and must certify such occupancy in such form as the Secretary shall prescribe. (3) The amount of the refinancing loan may not exceed an amount equal to the sum of the balance of the loan being refinanced and such closing costs as authorized in § 36.4232 or § 36.4254, as appropriate, and a discount not to exceed 2 percent of the loan amount; (4) The dollar amount of the guaranty of the 38 U.S.C. 3712(a)(1)(F) loan may not exceed the greater of the original guaranty amount of the loan being refinanced, or 25 percent of the loan; and (5) The term of the refinancing loan 38 U.S.C. 3712(a)(1)(F) may not exceed the original term of the loan being refinanced. (b) N… | ||||
| 38:38:2.0.1.1.10.1.345.23 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4224 Refinancing existing manufactured home loan including purchase of lot. | VA | [48 FR 40229, Sept. 6, 1983, as amended at 58 FR 37860, July 14, 1993] | (a) A veteran may refinance (38 U.S.C. 3712(a)(1)(G)) an existing purchase money lien on a manufactured home owned and occupied by the veteran as his or her home in conjunction with a loan to acquire a suitable lot on which that manufactured home is or will be located provided the following requirements are met. (1) The loan application must be submitted to the Secretary for prior approval; (2) The loan must be secured by the same manufactured home which is being refinanced and the real property on which the manufactured home is or will be located. (3) The amount of the loan may not exceed an amount equal to the sum of the balance of the loan being refinanced; the purchase price, not to exceed the reasonable value of the lot, as authorized in § 36.4252; the costs of necessary site preparation of the lot as determined by the Secretary; a reasonable discount as authorized in § 36.4204(d)(8) with respect to that portion of the loan used to refinance the existing purchase money lien on the manufactured home, and closing costs as authorized in § 36.4232 or § 36.4254, as appropriate. (b) If the loan being refinanced was guaranteed by the Department of Veterans Affairs, the portion of the loan made for the purpose of refinancing an existing purchase money manufactured home loan may be guaranteed without regard to the outstanding guaranty entitlement available for use by the veteran, and the veteran's guaranty entitlement shall not be charged as a result of any guaranty provided for the refinancing portion of the loan. For the purposes enumerated in 38 U.S.C. 3702(b) the refinancing portion of the loan shall be considered to have been obtained with the guaranty entitlement used to obtain the VA-guaranteed loan being refinanced. Guaranty for the refinancing loan shall be computed by first applying to the loan a combined total of the guaranty entitlement used to obtain the VA-guaranteed loan being refinanced and second any additional guaranty entitlement available to the veteran for manufactured home purposes, up to a … | ||||
| 38:38:2.0.1.1.10.1.345.24 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4225 Authority to close manufactured home loans on the automatic basis. | VA | [56 FR 40559, Aug. 15, 1991, as amended at 57 FR 828, Jan. 9, 1992; 57 FR 40616, Sept. 4, 1992] | (a) Supervised lenders of the classes described in 38 U.S.C. 3702(d) (1) and (2) are authorized by statute to process VA guaranteed manufactured home loans on the automatic basis. This category of lenders includes 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 by any State. (b) Nonsupervised lenders of the class described in 38 U.S.C. 3702(d)(3) must apply to the Secretary for authority to process manufactured home loans on the automatic basis. The following minimum requirements must be met: (1) Minimum assets. A minimum of $50,000 of working capital must be maintained. Working capital is defined as the excess of current assets over current liabilities. Current assets are defined as cash or other assets that could readily be converted into cash within 1 year on the normal accounting or business cycle. Current liabilities are defined as obligations that would be paid within a year on a normal accounting or business cycle. The lender's latest financial statements (profit and loss statements and balance sheets), audited and certified by a CPA (certified public accountant), must accompany the application. If the date of the financial statement precedes that of the application by more than 6 months, the lender-applicant must also attach a copy of its latest internal quarterly report. In addition, the lender-applicant must agree that if the application is approved, the applicant will provide within 120 days following the end of each of its fiscal years an audited financial statement to the Executive Director, Loan Guaranty Service for review. (2) Experience. The firm must have been actively engaged in originating manufactured home loans for at least the last 2 years. Alternately, each principal officer of the firm who is actively involved in managing origination functions must have a minimum of 2 recent yea… | ||||
| 38:38:2.0.1.1.10.1.345.25 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4226 Withdrawal of authority to close manufactured home loans on the automatic basis. | VA | [56 FR 40560, Aug. 15, 1991, as amended at 61 FR 28058, June 4, 1996; 72 FR 30242, May 31, 2007] | (a)(1) As provided in 38 U.S.C. 3702(e), the authority of any lender to close manufactured home loans on the automatic basis may be withdrawn by the Secretary at any time upon 30 days notice. The automatic processing authority of both supervised and nonsupervised lenders may be withdrawn for engaging in practices which are imprudent from a lending standpoint or which are prejudicial to the interests of veterans or the Government but are of a lesser degree than would warrant complete debarment or suspension of the lender from participation in the program. (2) Automatic processing authority may be withdrawn for failure to meet basic qualifying criteria. For non-supervised lenders, this includes lack of a designated underwriter, failure to maintain $50,000 working capital and/or failure to file required financial statements. For supervised lenders this includes loss of status as an entity subject to examination and supervision by a Federal or State supervisory agency as required by 38 U.S.C. 3702(d). During the 1 year probationary period for newly approved automatic lenders, automatic authority may be withdrawn based upon poor underwriting or consistently careless processing by the lender, as determined by VA. (3) Automatic processing authority may also be withdrawn based on any of the causes for debarment set forth in 2 CFR parts 180 and 801. (b) Authority to close manufactured home loans on the automatic basis may also be temporarily withdrawn for a period of time under the following schedule. (1) Withdrawal for 60 days: (i) Automatic loan submissions show deficiencies in credit underwriting, such as use of unstable sources of income to qualify the borrower, ignoring significant adverse credit items affecting the applicant's creditworthiness, etc., after such deficiencies have been repeatedly called to the lender's attention; (ii) Employment or deposit verifications are handcarried by applicants or otherwise improperly permitted to pass through the hands of a third party; (iii) Automatic loan submissions ar… | ||||
| 38:38:2.0.1.1.10.1.345.26 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4227 Advertising and Solicitation Requirements. | VA | [67 FR 9402, Mar. 1, 2002] | Any advertisement or solicitation in any form (e.g., written, electronic, oral) from a private lender concerning manufactured housing loans to be guaranteed or insured by the Secretary: (a) Must not include information falsely stating or implying that it was issued by or at the direction of VA or any other department or agency of the United States, and (b) Must not include information falsely stating or implying that the lender has an exclusive right to make loans guaranteed or insured by VA. | ||||
| 38:38:2.0.1.1.10.1.345.3 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4203 Eligibility of the veteran for the manufactured home loan benefit under 38 U.S.C. 3712. | VA | [44 FR 22723, Apr. 17, 1979, as amended at 48 FR 40227, Sept. 6, 1983; 49 FR 28243, July 11, 1984; 60 FR 38257, July 26, 1995] | (a) To be eligible for the manufactured home loan benefit a veteran must have loan guaranty entitlement for manufactured home purposes available for use. Notwithstanding the provisions of § 36.4205(e), the Secretary may exclude the amount of guaranty entitlement used for any guaranteed manufactured home loan provided: (1) The property which served as security for the loan has been disposed of by the veteran, or has been destroyed by fire or other natural hazard; and (2)(i) 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 said loan, such loss has been paid in full; or (ii) A veteran-transferee has agreed to assume the outstanding balance on the loan and consented to the use of his or her entitlement to the extent the entitlement of the veteran-transferor had been used originally, and the veteran-transferee otherwise meets the requirements of 38 U.S.C. chapter 37. (3) In a case in which the veteran still owns a property purchased with a VA-guaranteed loan, the Secretary may, one time only, restore entitlement if: (i) The loan has been repaid in full, or, if the Secretary has suffered a loss on the loan, the loss has been paid in full; or (ii) 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. (4) The Secretary may, in any case involving circumstances deemed appropriate, waive either or both of the requirements set forth in paragraphs (a)(1) and (a)(2)(i) of this section. The Secretary may, in any case involving circumstances deemed appropriate, waive either or both of the requirements set forth in paragraph (a)(1) or (2) of this section. (b) A veteran may use his or her remaining home loan guaranty entitlement for any purpose authorized by 38 U.S.C. 3710, 3711, or 3712 except that a veteran who has purchased a manufactured home unit may not purchase a second manufactured home unit until the unit which secured the first… | ||||
| 38:38:2.0.1.1.10.1.345.4 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4204 Loan purposes, maximum loan amounts and terms. | VA | [48 FR 40227, Sept. 6, 1983, as amended at 54 FR 34988, Aug. 23, 1989; 58 FR 37858, July 14, 1993; 82 FR 40700, Aug. 28, 2017] | (a) A manufactured home loan may be guaranteed if the loan is for one of the following purposes; (1) To purchase a lot on which to place a manufactured home already owned by the veteran; (2) To purchase a single-wide manufactured home; (3) To purchase a single-wide manufactured home and a lot on which to place such home; (4) To purchase a double-wide manufactured home; (5) To purchase a double-wide manufactured home and lot on which to place such home; (6) To refinance an existing loan, including a previously refinanced purchase money loan, that was made for the purchase of and is secured by a manufactured home and to purchase a lot on which the manufactured home is or will be placed; or (7) To refinance in accordance with § 36.4223 an existing manufactured home loan guaranteed, insured or made under paragraphs (a)(1) through (6) of this section provided the amount of the loan to refinance does not exceed an amount equal to 95 percent of the reasonable value of the manufactured home securing the loan, as determined by the Secretary. (b) In the case of a loan to purchase a new manufactured home unit only, the loan amount shall not exceed the lesser of an amount equal to 95 percent of the purchase price of the property securing the loan or the amount computed in paragraph (c), of this section, provided the total loan amount does not exceed 145 percent of the manufacturer's invoice. (c) For all manufactured home loans, the maximum loan amount is as follows: (1) In the case of a loan to purchase a new manufactured home unit only, the loan amount is to be computed as the sum of: (i) One hundred twenty-five (125) percent of the figure produced by this computation: Subtract from the manufacturer's invoice cost the manufacturer's invoice cost of any components (furnishings, accessories, equipment) removed from the unit by the dealer. To the remainder add the dealer's cost for any components added by such dealer. The sum so obtained shall be the figure to be multiplied by the specified percentage; and (ii) On… | ||||
| 38:38:2.0.1.1.10.1.345.5 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4205 Computation of guaranty. | VA | [44 FR 22724, Apr. 17, 1979, as amended at 46 FR 43669, Aug. 31, 1981; 48 FR 40228, Sept. 6, 1983; 58 FR 37859, July 14, 1993] | (a) The amount of guaranty in respect to a loan guaranteed under 38 U.S.C. 3712 shall be forty (40) percent of the original principal amount of the loan or $20,000, whichever is less. With respect to a loan guaranteed under 38 U.S.C. 3712(a)(1)(F), the dollar amount of guaranty may not exceed the original dollar amount of guaranty on the loan being refinanced. With respect to a loan guaranteed under 38 U.S.C. 3712(a)(1)(G), the dollar amount of guaranty previously used to obtain a manufactured unit loan may be transferred pursuant to § 36.4224(b) for use in refinancing the unit when simultaneously acquiring a lot. (b) Subject to the provisions of paragraph (c) of § 36.4203, the following formulas will determine the amount of guaranty entitlement which remains available to an eligible veteran after prior use of entitlement: (1) If a veteran previously secured a nonrealty (business) loan, the amount of nonrealty entitlement used is doubled and subtracted from $36,000. The sum remaining is the amount of available entitlement for use not to exceed $20,000 for manufactured home purposes. (2) If a veteran previously secured a realty (home) loan, the amount of realty (home) loan entitlement used is subtracted from $36,000. The sum remaining is the amount of available entitlement for use not to exceed $20,000 for manufactured home purposes. (3) If a veteran previously secured a manufactured home loan, the amount of entitlement used for manufactured home purposes is subtracted from $36,000. The sum remaining is the amount of available entitlement for use for home loan purposes only. To determine the amount of additional entitlement available for manufactured home purposes, the amount of entitlement previously used for manufactured home purposes is subtracted from $20,000. Except for manufactured home loans to be obtained pursuant to 38 U.S.C. 3712(a)(1)(F) or (G), the sum remaining is the amount of available entitlement for use for manufactured home purposes. (c) For the purpose of computing the remaining guaranty be… | ||||
| 38:38:2.0.1.1.10.1.345.6 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4206 Underwriting standards, occupancy, and non-discrimination requirements. | VA | [46 FR 43670, Aug. 31, 1981, as amended at 56 FR 9855, Mar. 8, 1991; 58 FR 37859, July 14, 1993] | (a) Except for refinancing loans pursuant to 38 U.S.C. 3712(a)(1)(F), no loan shall be guaranteed unless 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 by use of the standards in § 36.4337 of this part. (b) Use of the standards in § 36.4337 of this part for underwriting manufactured home loans will be waived only in extraordinary circumstances. (c) The lender responsibilities contained in § 36.4337 of this part and the certification required and penalties to be assessed under § 36.4337A of this part against lenders making false certifications also apply to lenders originating VA guaranteed manufactured home loans under the authority of 38 U.S.C. 3712. (d) No loan shall be guaranteed pursuant to 38 U.S.C. 3712(a)(1) unless: (1) The veteran certifies, in such form as the Secretary shall prescribe, that he or she will personally occupy the property as his or her home or, if the veteran is on active duty status as a member of the Armed Forces and is for that reason unable to occupy the property, the veteran's spouse must certify that he or she will personally occupy the property as his or her home. For the purposes of this section, the words personally occupy the property as his or her home mean that the veteran as of the date of his or her certification actually lives in the property personally as his or her residence or actually intends upon completion of the loan and acquisition of the manufactured home to move into the home personally within a reasonable time and to utilize the home as his or her residence. (2) The veteran certifies, in such form as the Secretary shall prescribe that: (i) Neither the veteran, nor anyone authorized to act for the veteran, will refuse to sell or rent, after the making of a bona fide offer, or refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny the dwelling or property covered by this loan to any person because of race… | ||||
| 38:38:2.0.1.1.10.1.345.7 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4207 Manufactured home standards. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 40 FR 13213, Mar. 25, 1975; 44 FR 22725, Apr. 17, 1979; 56 FR 9855, Mar. 8, 1991] | To qualify for purchase with a guaranteed loan a manufactured home must: (a) Meet the following dimensional requirements. (1) A single-wide unit must be a minimum of ten (10) feet wide and have a minimum floor area of four hundred (400) square feet. (2) A double-wide unit, when assembled, must be a minimum of twenty (20) feet wide and have a minimum floor area of seven hundred (700) square feet. (b) Be so constructed as to be towed on its own chassis and undercarriage and/or independent undercarriage; (c) Contain living facilities for year around occupancy by one family, including permanent provisions for heat, sleeping, cooking, and sanitation; and (d) Comply with the specifications in effect at the time the loan is made that are prescribed by the Secretary. | ||||
| 38:38:2.0.1.1.10.1.345.8 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4208 Manufactured home location standards. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 55 FR 37472, Sept. 12, 1990; 56 FR 9855, Mar. 8, 1991] | (a) Any rental site on which a manufactured home to be purchased with a guaranteed loan will be placed must qualify as an acceptable rental site as follows: (1) Be located within a manufactured home park or subdivision which is acceptable to the Department of Veterans Affairs; or (2) Be a site which is not within a manufactured home park or subdivision provided that (i) the site is determined by the Department of Veterans Affairs to be an acceptable rental site, or (ii) in the absence of a determination by the Department of Veterans Affairs in respect to such site the manufactured home purchaser and the dealer certify to the Secretary as follows: (A) Placement of the manufactured home on the site or lot is not a violation of zoning laws or other local requirements applicable to manufactured homes; (B) The site or lot is served by water and sanitary facilities which are approved by the local public authority and which are acceptable to the Department of Veterans Affairs; (C) The site or lot is served by an all-weather street or road; (D) The site or lot is not known to be subject to conditions that may be hazardous to the health or safety of the manufactured home occupants or that may endanger the manufactured home; and (E) The site is free from, and the location of the manufactured home thereon will not substantially contribute to, adverse scenic or environmental conditions. (b) No manufactured home purchased with a guaranteed loan may be placed on a lot owned by an eligible veteran or on a lot to be purchased or improved with the proceeds of a guaranteed manufactured home loan unless the lot owned or to be so purchased or improved is determined by the Department of Veterans Affairs to be an acceptable manufactured home site. (c) A manufactured home park or subdivision which is not approved by the Federal Housing Administration will be acceptable to the Department of Veterans Affairs for the purpose of 38 U.S.C. 3712 if the Secretary determines that the park or subdivision, whether existing or proposed, … | ||||
| 38:38:2.0.1.1.10.1.345.9 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4209 Reporting requirements. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 44 FR 22725, Apr. 17, 1979; 46 FR 43670, Aug. 31, 1981; 55 FR 37472, Sept. 12, 1990; 58 FR 37859, July 14, 1993] | (a) Each loan proposed for guaranty under 38 U.S.C. 3712 shall, unless otherwise provided in the § 36.4200 series, be submitted to the Secretary for approval prior to closing. The Secretary upon determining any such proposed loan to be eligible for guaranty will issue a certificate of commitment. (b) Except as provided in paragraph (c) of this section, a certificate of commitment shall entitle the holder to the issuance of the evidence of guaranty upon the ultimate actual payment of the full proceeds of the loan for the purposes described in the original report and upon the submission within 60 days thereafter of a supplemental report showing such fact and: (1) That the loan conforms to the terms of the certificate of commitment; (2) The identity of all property purchased therewith, including the itemized list required by § 36.4204(f); (3) That all property purchased with the proceeds of the loan has been encumbered as required by the § 36.4200 series; (4) In respect to any property purchased with the loan proceeds as to which the Secretary issued a certificate of reasonable value which was conditioned upon completion of any construction, repairs, alterations or improvements not inspected and approved subsequent to completion by a compliance inspector designated by the Secretary that such construction, repairs, alterations or improvements have been completed according to the plans and specifications upon which such reasonable value was based; and (5) That the loan conforms otherwise to the applicable provisions of 38 U.S.C. chapter 37 and § 36.4200 series. (c) A deviation of more than five (5) percent between the estimates upon which the certificate of commitment was issued and the report of final payment of the proceeds of the loan, or a change in the identity of the property acquired by the veteran with the loan proceeds will invalidate the certificate of commitment, unless such deviation or change is approved by the Secretary. (d) Upon the failure of the lender to report in accordance with paragraph (b… | ||||
| 38:38:2.0.1.1.10.1.346.27 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4231 Warranty requirements. | VA | [48 FR 40229, Sept. 6, 1983, as amended at 60 FR 38259, July 26, 1995] | (a) When a new manufactured home purchased with financing guaranteed under 38 U.S.C. 3712 is delivered to the veteran-borrower he or she will be supplied a written warranty by the manufacturer in the form and content prescribed by the Secretary. 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, and the warranty instrument will so provide. No evidence of guaranty shall be issued by the Secretary unless a copy of such warranty duly receipted by the purchaser is submitted with the loan papers. (b) Any manufactured housing unit properly displaying a certification of conformity to all applicable Federal manufactured home construction and safety standards pursuant to 42 U.S.C. 5415 shall be acceptable as security for a VA guaranteed loan. (c) When a used manufactured home is purchased from a manufactured home dealer with financing guaranteed under 38 U.S.C. 3712 the veteran-borrower must be supplied with a written warranty by the manufactured home dealer in the form and content prescribed by the Secretary. 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, and the warranty instrument will so provide. No evidence of guaranty shall be issued by the Secretary unless a copy of such warranty duly receipted by the purchaser is submitted with the loan papers. | ||||
| 38:38:2.0.1.1.10.1.346.28 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4232 Allowable fees and charges; manufactured home unit. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 40 FR 1514, Jan. 8, 1975; 44 FR 16014, Mar. 16, 1979; 46 FR 43671, Aug. 31, 1981; 47 FR 46700, Oct. 20, 1982; 49 FR 40230, Sept. 6, 1983; 50 FR 5754, Feb. 12, 1985; 53 FR 27047, July 18, 1988; 55 FR 37473, Sept. 12, 1990; 58 FR 37860, July 14, 1993; 60 FR 38259, July 26, 1996; 62 FR 63278, Nov. 28, 1997] | (a) Incident to the origination of a guaranteed loan for the purchase or refinancing of a manufactured home unit only, no charge shall be made against, or paid by, the veteran-borrower without the express prior approval of the Secretary except as provided in paragraph (e) of this section and as follows: (1) Actual fees or charges for required recordation of documents; (2) The costs of independent fee inspections for itemized items included in the manufactured home loan, as required by § 36.4204(f); (3) The amount of any documentary stamp taxes levied on the transaction; (4) The amount of State and local taxes levied on the transaction; (5) The premium for customary physical damage insurance and vendor's single interest coverage on the manufactured home for an initial policy term of not to exceed one (1) year; (6) The premium for insurance against loss for items missing at time of repossession and for repossession expenses, unless State law prohibits charging borrowers for this coverage, in which case the lender is required to pay for the coverage without reimbursement from the veteran; (7) For the purposes of obtaining a refinancing loan for interest rate reduction or a refinancing loan to simultaneously refinance a unit and acquire a lot, the cost of a credit report and an appraisal; and (8) The actual amount charged for flood zone determinations, including a charge for a life-of-the-loan flood zone determination service purchased at the time of loan origination, if made by a third party who guarantees the accuracy of the determination. A fee may not be charged for a flood zone determination made by a Department of Veterans Affairs appraiser or for the lender's own determination. (b) Any charge against the borrower properly made under paragraph (a) of this section may be included in the loan and paid out of the proceeds of the loan provided the total loan amount does not exceed 145 percent of the manufacturer's invoice. (c)(1) Costs of a credit report (except for 38 U.S.C. 3712(a)(1)(F) or (G) refinanc… | ||||
| 38:38:2.0.1.1.10.1.346.29 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4234 Title and lien requirements. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 46 FR 43671, Aug. 31, 1981; 58 FR 37860, July 14, 1993] | (a) The interest in the manufactured home acquired by the veteran at the time of purchase shall be either: (1) Legal title evidenced by such document as is customarily issued to the purchaser of a manufactured home in the jurisdiction in which the manufactured home is initially sited, or (2) A full possessory interest convertible into a legal title conforming to paragraph (a)(1) of this section upon payment in full of the guaranteed loan. (b) The loan must be secured by a properly recorded financing statement and security agreement or other security instrument that creates a first lien on or equivalent security interest in the manufactured home and all of the furnishings, equipment, and accessories paid for in whole or in part out of the loan proceeds. (c) It is the responsibility of the lender that the veteran initially obtains an interest in the manufactured home meeting the requirements of paragraph (a) of this section and to obtain and retain a security interest meeting the requirements of paragraph (b) of this section. | ||||
| 38:38:2.0.1.1.10.1.347.30 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4251 Loans to finance the purchase of manufactured homes and the cost of necessary site preparation. | VA | [36 FR 3368, Feb. 23, 1971, as amended at 40 FR 13215, Mar. 25, 1975; 48 FR 40230, Sept. 6, 1983] | (a) A loan to finance the purchase of a manufactured home may include funds (or be augmented by a separate loan) to pay all or a part of the cost of the necessary site preparation of a lot on which to place the manufactured home and the loan shall be eligible for guaranty: Provided, that: (1) The veteran has, or incident to the transaction will acquire, a title to the lot that conforms to § 36.4253(a). (2) The loan is secured as required by § 36.4253(d). (3) The lot is determined by the Secretary to be an acceptable manufactured homesite pursuant to § 36.4208, (4) The cost of the necessary site preparation is determined by the Secretary to be reasonable. (5) The amount of the loan to pay for necessary site preparation does not exceed the cost thereof and also does not exceed the reasonable value of the developed lot as determined by the Secretary, and (6) The loan conforms otherwise to the requirements of the § 36.4200 series. (b) Notwithstanding that the veteran-borrower's obligation for such site preparation be evidenced and secured separately from the obligation for purchase of the manufactured home, the obligations together shall constitute one loan for the purposes of the § 36.4200 series, including computation of the Secretary's guaranty liability. (c) The cost of site preparation which will not be paid from the proceeds of the loan must be paid by the veteran in cash from the veteran's own resources. | ||||
| 38:38:2.0.1.1.10.1.347.31 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4252 Loans for purchase or refinancing of a manufactured home. | VA | [36 FR 3368, Feb. 23, 1971, as amended at 40 FR 13215, Mar. 25, 1975; 44 FR 22725, Apr. 17, 1979; 48 FR 40230, Sept. 6, 1983] | (a) A loan to purchase a manufactured home may include funds (or be augmented by a separate loan) to finance all or part of the cost of acquisition by the veteran of a lot on which to place the manufactured home and the loan shall be eligible for guaranty: Provided, That: (1) The veteran will acquire title to such lot that conforms to the requirements of § 36.4253(a), (2) The loan is secured as required by § 36.4253(d), (3) The lot is determined by the Secretary to be an acceptable manufactured homesite pursuant to § 36.4208, (4) The portion of the loan allocated to acquisition of the lot does not exceed the reasonable value of the lot as determined by the Secretary, and (5) The loan conforms otherwise to the requirements of the § 36.4200 series. (b) Notwithstanding that the veteran-borrower's obligation for acquisition of the lot be evidenced and secured separately from the obligation for purchase of the manufactured home, the obligations together (including, where appropriate, that for site preparation) shall constitute one loan for the purposes of the § 36.4200 series, including computation of the Secretary's guaranty liability. (c) The cost of lot acquisition which will not be paid from the proceeds of the loan must be paid by the veteran in cash from the veteran's own resources. (d) For the purpose of this section acquisition of a manufactured home lot includes: (1) The refinancing of the balance owed by the veteran as purchaser under an existing real estate installment contract, and (2) The refinancing of existing mortgage loans or other liens which are secured of record on a manufactured home lot owned by the veteran. (e) A loan to acquire a lot on which to site a manufactured home may include funds to refinance an existing loan made for the purchase of and secured by a manufactured home on which lot the manufactured home is located or will be placed, provided that: (1) The veteran will acquire or retain title to such manufactured home and lot that conforms to the requirements of §§ 36.4234 a… | ||||
| 38:38:2.0.1.1.10.1.347.32 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4253 Title and lien requirements. | VA | [36 FR 3368, Feb. 23, 1971, as amended at 45 FR 55720, Aug. 21, 1980; 47 FR 49393, Nov. 1, 1982; 48 FR 40231, Sept. 9, 1983; 49 FR 22081, May 25, 1984; 55 FR 25976, June 26, 1990; 58 FR 37860, July 14, 1993; 61 FR 28058, June 4, 1996] | (a) The interest in the realty constituting a manufactured home lot acquired by the veteran wholly or in part with the proceeds of a guaranteed loan, or in the realty constituting a manufactured home lot improved wholly or in part with the proceeds of a guaranteed loan, shall not be less than: (1) A fee simple estate therein, legal or equitable; or (2) A leasehold estate running or renewable at the option of the lessee for a period of not less than 14 years from the maturity of the loan, or to any earlier date at which the fee simple title will vest in the lessee, which is assignable or transferable, if the same be subjected to the lien; however, a leasehold estate which is not freely assignable and transferable will be considered an acceptable estate if it is determined by the Under Secretary for Benefits, or the Executive Director, Loan Guaranty Service, (i) that such type of leasehold is customary in the area where the property is located, (ii) that a veteran or veterans will be prejudiced if the requirement for free assignability is adhered to and, (iii) that the assignability and other provisions applicable to the leasehold estate are sufficient to protect the interests of the veteran and the Government and are otherwise acceptable; or (3) A life estate, provided that the remainder and reversionary interests are subjected to the lien; or (4) A beneficial interest in a revocable Family Living Trust that ensures that the veteran, or veteran and spouse, have an equitable life estate, provided the lien attaches to any remainder interest and the trust arrangement is valid under State law. The title to such estate shall be such as is acceptable to informed buyers, title companies, and attorneys, generally, in the community in which the property is situated, except as modified by paragraph (b) of this section. (b) Any such property or estate will not fail to comply with the requirements of paragraph (a) of this section by reason of the following: (1) Encroachments; (2) Easements; (3) Servitudes; (4) Reser… | ||||
| 38:38:2.0.1.1.10.1.347.33 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4254 Fees and charges. | VA | [36 FR 3369, Feb. 23, 1971, as amended at 46 FR 43671, Aug. 31, 1981; 47 FR 46700, Oct. 20, 1982; 48 FR 40231, Sept. 6, 1983; 50 FR 5754, Feb. 12, 1985; 53 FR 27048, July 18, 1988; 55 FR 37473, Sept. 12, 1990; 60 FR 38259, July 26, 1995; 61 FR 28058, June 4, 1996; 62 FR 63278, Nov. 28, 1997] | (a) Except as provided in § 36.4232 fees and charges incident to origination of a combination loan or a loan to purchase a lot upon which a manufactured home owned by the veteran will be placed which may be paid by the veteran shall be limited, with respect to the real estate portion of the loan, to reasonable and customary amounts for any of the following: (1) Fees of the Department of Veterans Affairs appraiser and of compliance inspectors designated by the Department of Veterans Affairs, except appraisal fees incurred for the predetermination of reasonable value requested by others than veteran or lender, (2) Recording fees and recording taxes or other charges incident to recordation, (3) Credit report, (4) That portion of taxes, assessments, and other similar items for the current year chargeable to the borrower and an initial deposit (lump-sum payment) for any tax and insurance account, (5) Survey, if required by lender or veteran, (6) Title examination and title insurance, if any, (7) The actual amount charged for flood zone determinations, including a charge for a life-of-the-loan flood zone determination service purchased at the time of loan origination, if made by a third party who guarantees the accuracy of the determination. A fee may not be charged for a flood zone determination made by a Department of Veterans Affairs appraiser or for the lender's own determination, and (8) Such other items as may be authorized in advance by the Under Secretary for Benefits as appropriate for inclusion under this paragraph as proper local variances. (b) A lender may charge and the veteran may pay a flat charge not exceeding one (1) percent of the amount of the loan less the portion thereof allocated to the manufactured home: Provided, That such flat charge shall be in lieu of all other charges relating to costs of origination not expressly specified and allowed in this schedule. (c) Except for a refinancing loan pursuant to 38 U.S.C. 3712(a)(1)(F) or (G) fees and charges specified in this section may not … | ||||
| 38:38:2.0.1.1.10.1.347.34 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4255 Loans for the acquisition of a lot. | VA | [40 FR 13215, Mar. 25, 1975, as amended at 48 FR 40231, Sept. 6, 1983] | (a) A loan to finance all or part of the cost of acquisition by the veteran of a lot on which to place a manufactured home owned by the veteran shall be eligible for guaranty, Provided, That: (1) The veteran will acquire title to such lot that conforms to the requirements of § 36.4253(a), (2) The loan is secured as required by § 36.4253(d), (3) The lot is determined by the Secretary to be an acceptable manufactured homesite pursuant to § 36.4208, (4) The portion of the loan allocated to acquisition of the lot does not exceed the reasonable value of the lot as determined by the Secretary, (5) The loan conforms otherwise to the requirements of the § 36.4200 series. (b) The cost of lot acquisition which will not be paid from the proceeds of the loan must be paid by the veteran in cash from his or her own resources. (c) For the purpose of this section, acquisition of a manufactured home lot includes: (1) The refinancing of the balance owed by the veteran as purchaser under an existing real estate installment contract, and (2) The refinancing of existing mortgage loans or other liens which are secured of record on a manufactured home lot owned by the veteran. | ||||
| 38:38:2.0.1.1.10.1.348.35 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4275 Events constituting default and acceptability of partial payments. | VA | [45 FR 31064, May 12, 1980, as amended at 46 FR 51386, Oct. 20, 1981; 55 FR 37474, Sept. 12, 1990] | (a) Except as provided in paragraphs (a)(1), (a)(2) and (a)(3) of this section, the conveyance of or other transfer of title to property by operation of law or otherwise, after the creation of a lien thereon to secure a loan which is guaranteed in whole or in part by the Secretary, shall not constitute an event of default, or acceleration of maturity, elective or otherwise, and shall not of itself terminate or otherwise affect the guaranty. (1) The Secretary may issue guaranty on loans in which a State, Territorial, or local governmental agency provides assistance to a veteran for the acquisition of a mobile home or lot. Such loans will not be considered ineligible for guaranty if the State, Territorial, or local authority, by virtue of its laws or regulations or by virtue of Federal law, requires the acceleration of maturity of the loan upon the sale or conveyance of the security property to a person ineligible for assistance from such authority. (2) At the time of application for a loan assisted by a State, Territorial, or local governmental agency, the veteran-applicant must be fully informed and consent in writing to the housing authority restrictions. A copy of the veteran's consent statement must be forwarded with the loan application or the report of a loan processed on the automatic basis. (3) Any housing loan which is financed under 38 U.S.C. chapter 37 and to which section 3714 of that chapter applies, shall include a provision in the security instrument that the holder may declare the loan 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 section 3714. (i) A holder may not exercise its option to accelerate a loan upon: (A) The creation of a lien or other encumbrance subordinate to the lender's security instrument which does not relate to a transfer of rights of occupancy in the property; (B) The creation of a purchase money security interest for household appliances; (C)… | ||||
| 38:38:2.0.1.1.10.1.348.36 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4276 Advances and other charges. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 45 FR 38056, June 6, 1980; 53 FR 27049, July 18, 1988; 53 FR 34295, Sept. 6, 1988; 55 FR 37474, Sept. 12, 1990; 58 FR 29114, May 19, 1993; 58 FR 37860, July 14, 1993; 59 FR 48565, Sept. 22, 1994] | (a) A holder may advance any reasonable amount necessary and proper for the maintenance or repair of the security, or for the payment of accrued taxes, special assessments or other charges which constitute prior liens, or premiums on fire or other hazard insurance against loss of or damage to such property and any such advance so made may be added to the guaranteed indebtedness. A holder may also advance the one-half of one percent funding fee due on a transfer under 38 U.S.C. 3714 when this is not paid at the time of transfer. All security instruments for loans to which 38 U.S.C. 3714 applies must include a clause authorizing an advance for this purpose if it is not paid at the time of transfer. (b) In addition to advances allowable under paragraph (a) of this section, the holder may charge against the proceeds of the sale of the security; against gross amounts collected; or, in the computation of a claim under the guaranty, if lawfully authorized by the loan agreement and subject to § 36.4284, any of the following items actually paid: (1) Any expense which is reasonably necessary for preservation of the security, (2) Court costs in a foreclosure or other proper judicial proceeding involving the security, (3) Other expenses reasonably necessary for collecting the debt, or repossession or liquidation of the security, including a reasonable sales commission to the dealer or sales broker for resale of the security, (4) Reasonable trustee's fees or commissions paid incident to the sale of real property, (5) Reasonable amount for legal services actually performed not to exceed 10 percent of the unpaid indebtedness as of the date of the first uncured default, or $850 whichever is less. In no event may the combined total of the amounts claimed for trustee's fees and legal services (paragraphs (b)(4) and (5) of this section) exceed $850. (6) The cost of a credit report(s) on the debtor(s), which is (are) to be forwarded to the Secretary in connection with the claim, (7) Reasonable and customary costs of property… | ||||
| 38:38:2.0.1.1.10.1.348.37 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4277 Release of security. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 53 FR 34295, Sept. 6, 1988; 55 FR 37474, Sept. 12, 1990] | (a) Except upon full payment of the indebtedness the holder shall not release a lien or other right in or to property held as security for a guaranteed loan, or grant a fee or other interest in such property, without the prior approval of the Secretary, unless in the opinion of the holder such release does not involve a decrease in the value of the security in excess of $500: Provided, That the aggregate of the reduction in the original value of the security resultant from such releases without the Secretary's prior approval does not exceed $500. (b) Except upon full payment of the indebtedness or upon the prior approval of the Secretary, the holder shall not release a lien under paragraph (a) of this section unless the consideration received for the release is commensurate with the fair market value of the property released and the entire consideration is applied to the indebtedness, or if encumbrance on other property is accepted in lieu of that released it shall be the holder's duty to acquire such lien on property of substantially equal value which is reasonably capable of serving the purpose for which the property released was utilized. (c) Failure of the holder to comply with the provisions of this section shall not in itself affect the validity of the title of a purchaser to the property released. (d) The holder shall notify the Secretary of any such release or substitution of security within 30 days after completion of such transaction. (e) The release of the personal liability of any obligor on a guaranteed obligation resultant from the act or omission of any holder without the prior approval of the Secretary shall release the obligation of the Secretary as guarantor, except when such act or omission consists of (1) Failure to establish the debt as a valid claim against the assets of the estate of any deceased obligor, provided no lien for the guaranteed debt is thereby impaired or destroyed; or (2) An election and appropriate prosecution of legally available effective remedies with respect to th… | ||||
| 38:38:2.0.1.1.10.1.348.38 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4278 Servicing procedures for holders. | VA | [58 FR 29114, May 19, 1993] | (a) Establishment of loan servicing program. The holder of a loan guaranteed or insured by the Secretary shall develop and maintain a loan servicing program which follows accepted industry standards for servicing of similar type conventional loans. The loan servicing program established pursuant to this section may employ different servicing approaches to fit individual borrower circumstances and avoid establishing a fixed routine. However, it must incorporate each of the provisions specified in paragraphs (b) through (l) of this section. (b) Procedures for providing information. (1) Loan holders shall establish procedures to provide loan information to borrowers, arrange for individual loan consultations upon request and maintain controls to assure prompt responses to inquiries. One or more of the following means of making information readily available to borrowers is required: (i) An office staffed with trained servicing personnel with access to loan account information located within 200 miles of the property. (ii) Toll-free telephone service or acceptance of collect telephone calls at an office capable of providing needed information. (2) All borrowers must be informed of the system available for obtaining answers to loan inquiries, the office from which the needed information may be obtained, and reminded of the system at least annually. (c) Statement for income tax purposes. Within 60 days after the end of each calendar year, the holder shall furnish to the borrower a statement of the interest paid and, if applicable, a statement of the taxes disbursed from the escrow account during the preceding year. At the borrower's request, the holder shall furnish a statement of the escrow account sufficient to enable the borrower to reconcile the account. (d) Change of servicing. Whenever servicing of a loan guaranteed or insured by the Secretary is transferred from one holder to another, notice of such transfer by both the transferor and transferee, the form and content of such notice, the timing of su… | ||||
| 38:38:2.0.1.1.10.1.348.39 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4279 Extensions and reamortizations. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 53 FR 34295, Sept. 6, 1988] | (a) Provided the debtor(s) is (are) a reasonable credit risk(s), as determined by the holder based upon review of the debtor's (s') creditworthiness, including a review of a current credit report(s) on the debtor(s), the terms of repayment of any loan may, by written agreement between the holder and debtor(s), be extended in the event of default, to avoid imminent default, or in any other case where the prior approval of the Secretary is obtained. Except with the prior approval of the Secretary, no such extension shall set a rate of amortization less than that sufficient to fully amortize at least 80 percent of the loan balance so extended within the maximum maturity prescribed for loans of its class. (b) In the event of a partial prepayment pursuant to § 36.4211, the balance of the indebtedness may, by written agreement between the holder and the debtor(s), be reamortized, provided the reamortization schedule will result in full repayment of the loan within the original maturity, and provided the debtor(s) is (are) a reasonable credit risk(s), as determined by the holder based upon review of the debtor's (s') creditworthiness, including a review of a current credit report(s) on the debtor(s). (c) Unless the prior approval of the Secretary has been obtained, any extension or reamortization agreed to by a holder which relieves any obligor from liability will release the liability of the Secretary under the guaranty on the entire loan. However, if such release of liability of an obligor results through operation of law by reason of an extension or other act of forbearance, the liability of the Secretary as guarantor will not be affected thereby, Provided, The required lien is maintained and the title holder is and will remain liable for the payment of the indebtedness: And further provided, That if such extension or act of forbearance will result in the release of the veteran, all delinquent installments, plus any foreclosure expenses which may have been incurred, shall have been fully paid. (d) The holder s… | ||||
| 38:38:2.0.1.1.10.1.348.40 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4280 Reporting of defaults. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 58 FR 29116, May 19, 1993] | The holder of any guaranteed loan shall give notice to the Secretary within 15 days after any debtor: (a) Is in default by reason of nonpayment of two full installments; or (b) Is in default by failing to comply with any other covenant or obligation of such guaranteed loan which failure persists for a continuing period of 60 days after demand for compliance therewith has been made, except that if the default is due to nonpayment of real estate taxes, the notice shall not be required until the failure to pay when due has persisted for a continuing period of 120 days. (c) In the event any failure of the months or for more than 1 month on an extended loan, the holder may then or thereafter give the notice in the manner described in paragraph (e) of this section. (d) The notice prescribed in paragraph (e) of this section may be submitted prior to the time prescribed in paragraph (c) of this section in any case where any material prejudice to the rights of the holder or to the Secretary or hazard to the security warrants more prompt action. (e) Except upon the express waiver of the Secretary, a holder shall not begin proceedings in court or give notice of sale under power of sale, repossess the security, or accelerate the loan, or otherwise take steps to terminate the debtor's rights in the security until the expiration of 30 days after delivery by certified mail to the Secretary of a notice of intention to take such action; provided, that immediate action as required under 38 CFR 36.4278(i) may be taken if the property to be affected thereby has been abandoned by the debtor, or has been or may be otherwise subjected to extraordinary waste or hazard. (f) The notice required under subparagraph (e) of this paragraph shall also be provided to the original veteran-borrower and any other liable obligors by certified mail within 30 days after such notice is provided to the Secretary in all cases in which the current owner of the property is not the original veteran-borrower. A failure by the holder to make a good fait… | ||||
| 38:38:2.0.1.1.10.1.348.41 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4281 Refunding of loans in default. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 55 FR 37474, Sept. 12, 1990] | Upon receiving a notice of default the Secretary may at any time prior to the termination of the borrower's interest in the property require the holder upon penalty of otherwise losing the guaranty to transfer and assign the loan and the security therefor to the Secretary or to another designated by him or her upon receipt of payment of the balance of the indebtedness remaining unpaid to the date of such assignment. Such assignment may be made without recourse but the transferor shall not thereby be relieved from the provisions of § 36.4286. | ||||
| 38:38:2.0.1.1.10.1.348.42 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4282 Legal proceedings (notice of repossession). | VA | [36 FR 1253, Jan. 27, 1971, as amended at 47 FR 12965, Mar. 26, 1982; 53 FR 34296, Sept. 6, 1988] | (a) When the holder institutes suit or otherwise becomes a party in any legal or equitable proceeding brought on or in connection with the guaranteed indebtedness, or involving title to, or other lien on, the security, such holder, within the time that would be required if the Secretary were a party to the proceeding, shall deliver to the Secretary, by mail or otherwise, by making such delivery to the loan guaranty officer at the office which granted the guaranty, or other office to which the holder has been notified the file is transferred, a copy of every procedural paper filed on behalf of holder, and shall also so deliver, as promptly as possible, a copy of each similar pleading served on holder or filed in the cause by any other party thereto. Notice of, or motion for, continuance and orders thereon are excepted from the foregoing. (b) A copy of a notice of sale under power by a holder or one acting at his or her behest (e.g., trustee or public official) shall be similarly delivered to the Secretary at or before the date of first publication, posting, or other notice, but in any event, except in emergency or when waived by the Secretary, not less than 10 days prior to date of sale. Copy of any other notice of sale served on the holder or of which he or she has knowledge shall be similarly delivered to the Secretary, including any such notice of sale under tax or other superior lien or any judicial sale. (c) The procedure prescribed in paragraphs (a) and (b) of this section shall not be applicable in any proceeding to which the Secretary is a party, after the Secretary's appearance shall have been entered therein by a duly authorized attorney. (d) In any legal or equitable proceeding (including probate and bankruptcy proceedings) to which the Secretary is a party, original process and any other process prior to appearance, proper to be served on the Secretary, shall be delivered to the loan guaranty officer of the office of the Department of Veterans Affairs having jurisdiction of the area in which the cou… | ||||
| 38:38:2.0.1.1.10.1.348.43 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4283 Foreclosure or repossession. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 47 FR 12965, Mar. 26, 1982; 49 FR 22081, May 25, 1984; 53 FR 34296, Sept. 6, 1988; 58 FR 37860, July 14, 1993; 61 FR 28058, June 4, 1996] | (a) Upon receipt by the Secretary of notice of a judicial or statutory sale, or other public sale under power of sale contained in the loan instruments, to liquidate any security for a guaranteed loan, the Secretary may specify in advance of such sale the minimum amount which shall be credited to the indebtedness of the borrower on account of the value of the security to be sold, subject to the provisions of paragraphs (a)(1), (2), (3), and (4) of this section: (1) If a minimum amount has been specified in relation to a sale of the property and the holder is the successful bidder at the sale for an amount not in excess of such specified amount the holder shall dispose of the property in the manner set forth in paragraph (f) and the amount realized from the resale of the property shall govern in the final accounting for determining the rights and liabilities of the holder and the Secretary. (2) If a minimum amount has been specified by the Secretary and: (i) A third party is the successful bidder at the sale for an amount equal to or in excess of that specified, the holder shall credit to the indebtedness the net proceeds of the sale. (ii) A third party is the successful bidder at the sale for an amount less than that specified, the holder shall credit to the indebtedness the amount specified less expenses allowable under § 36.4276. (iii) The holder is the successful bidder at the sale for an amount in excess of the specified amount the indebtedness shall be credited with the net proceeds of the sale or an amount established in accordance with paragraph (f) of this section, whichever is the greater, unless the bid in excess of the specified amount was made pursuant to paragraph (d) of this section. (3) If a minimum amount has not been specified by the Secretary under paragraph (a)(1) or (2) of this section, and the Secretary advised the holder that it did not intend to specify an amount, and the property is purchased at the sale by a third party, the holder shall credit against the indebtedness the net proce… | ||||
| 38:38:2.0.1.1.10.1.348.44 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4284 Computation of guaranty claims. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 49 FR 22082, May 25, 1984; 58 FR 37861, July 14, 1993] | (a) Subject to the limitation that the maximum amount payable shall in no event exceed the amount originally guaranteed, the amount payable on a claim for the guaranty shall be the percentage of the loan originally guaranteed applied to the indebtedness computed as of the date of claim but not later than (1) the date of judgment or of decree of foreclosure; or (2) in nonjudicial foreclosures, the date of publication of the first notice of sale; or (3) in cases in which the security is repossessed without a judgment, decree, or foreclosure, the date the holder repossesses the security; or (4) if no security is available, the date of claim but not more than 6 months after the first uncured default. Deposits or other credits or setoffs including any escrowed or earmarked funds legally applicable to the indebtedness on the date of the claim computation shall be applied in reduction of the indebtedness upon which the claim is based. (b) Credits accruing from the proceeds of a sale or other disposition of the security shall be reported to the Secretary incident to such submission, and the amount payable on the claim shall in no event exceed the remaining balance of the indebtedness. (c) Any allowable expenditures or costs, paid by the holder, and any accrued and unpaid interest to the applicable cutoff date as set forth in paragraph (a) of this section at the maximum rate allowable, may be deducted from the proceeds of the sale of the property, or may be included in the accounting to the Secretary on such loan. For loans guaranteed prior to May 8, 1984, the holder may also either deduct from sales proceeds, or include in the accounting, accrued interest at a rate of 6 percent from such cutoff date to the date of resale or other liquidation but not to exceed 60 days. For loans guaranteed on or after May 8, 1984, the holder may also either deduct from sales proceeds, or include in the accounting, accrued interest at a rate 4.75 percent below the contract interest rate from such cutoff date to the date of resale or othe… | ||||
| 38:38:2.0.1.1.10.1.348.45 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4285 Subrogation and indemnity. | VA | [36 FR 1253, Jan. 27, 1971, as amended at 36 FR 13032, July 13, 1971; 44 FR 16015, Mar. 16, 1979; 55 FR 37474, Sept. 12, 1990] | (a) The Secretary shall be subrogated to the contract and the lien or other rights of the holder to the extent of any sum paid on a guaranty, which right shall be junior to the holder's rights as against the debtor or the encumbered property until the holder shall have received the full amount payable under the contract with the debtor except that where the holder has entered into a recourse and/or repurchase or indemnity agreement with a dealer or servicer or other entity and the Department of Veterans Affairs pays a claim under guaranty to the holder the Department of Veterans Affairs will not be subrogated to any rights the holder may have under the recourse and/or repurchase or indemnity agreement. No partial or complete release by a creditor shall impair the rights of the Secretary with respect to the debtor's obligation. (b) The holder, upon request, shall execute, acknowledge, and deliver an appropriate instrument tendered the holder for that purpose, evidencing any payment received from the Secretary and the Secretary's resulting right of subrogation. (c) The Secretary may cause the instrument required by paragraph (b) of this section to be filed for record in the Office of the Recorder of Deeds, or other appropriate office of the proper county, town, or State, in accordance with the applicable State law. (d) Any amounts paid by the Secretary on account of the liabilities of any veteran guaranteed under the provisions of 38 U.S.C. 3712 shall constitute a debt owing to the United States by such veteran. (e) Whenever any veteran disposes of residential property securing a guaranteed loan obtained under 38 U.S.C. 3712, and for which the commitment to make the loan was made prior to March 1, 1988, the Secretary, upon application made by such veteran, shall issue to the veteran a release relieving him or her 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 Sec… | ||||
| 38:38:2.0.1.1.10.1.348.46 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4286 Partial or total loss of guaranty. | VA | (a) There shall be no guaranty liability on the part of the Secretary in respect to any loan as to which a signature to the note, the mortgage or other security instrument is a forgery. Except as to a holder who acquired the loan instrument before maturity, for value, and without notice, and who has not directly or by agent participated in the fraud, or in the misrepresentation hereinafter specified, any willful and material misrepresentation or fraud by the lender, or by a holder, or the agent of either, in procuring the guaranty shall relieve the Secretary of liability, or shall constitute a defense against liability on account of the guaranty of the loan in respect to which the willful misrepresentation, or the fraud, is practiced: Provided, That if a misrepresentation, although material, is not made willfully, or with fraudulent intent, it shall have only the consequences prescribed in paragraphs (b) and (c) of this section. (b) In taking security required by 38 U.S.C. 3712 and the § 36.4200 series, a holder shall obtain the required lien on real property the title to which is such as to be acceptable to prudent lending institutions, informed buyers, title companies, and attorneys, generally in the community in which the property is situated: Provided, That a title will not be unacceptable by reason of any of the limitations on the quantum or quality of the property or title stated in § 36.4253. If such holder fails in this respect or fails to comply with any of the requirements of 38 U.S.C. 3712 and the § 36.4200 series with respect to: (1) Obtaining and retaining a lien of the dignity prescribed on all property upon which a lien is required by 38 U.S.C. 3712 or the § 36.4200 series, (2) Inclusion of power to substitute trustees, (3) The procurement and maintenance of insurance coverage, (4) Advice to Secretary as to default, (5) Notice of intention to begin action, (6) Notice to the Secretary in any suit or action, or notice of sale, (7) The release, conveyance, substitution, or exchange of secu… | |||||
| 38:38:2.0.1.1.10.1.348.47 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | A | Subpart A—Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation | § 36.4287 Substitution of trustees. | VA | In jurisdictions in which valid, any deed of trust or mortgage securing a guaranteed loan, if it names trustees or confers a power of sale otherwise, shall contain a provision empowering any holder of the indebtedness to appoint substitute trustees or other person with such power to sell, who shall succeed to all the rights, powers, and duties of the trustees, or other person, originally designated. | |||||
| 38:38:2.0.1.1.10.2.349.1 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4300 Applicability and qualified mortgage status. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 79 FR 26627, May 9, 2014] | (a) Applicability to guaranteed loans. This subpart applies to loans serviced by a mortgage servicing industry segment on or after the date that VA issues a Federal Register notice making this subpart applicable to that segment. This includes loans entitled to an automatic guaranty, or otherwise guaranteed or insured, on or after the date assigned in the Federal Register, and loans that were previously guaranteed or insured to the extent that no legal rights vested under the regulations are impaired. (b) Safe harbor qualified mortgage —(1) Defined. A safe harbor qualified mortgage meets the Ability-to-Repay requirements of sections 129B and 129C of the Truth-in-Lending Act (TILA) regardless of whether the loan might be considered a high cost mortgage transaction as defined by section 103bb of TILA (15 U.S.C. 1602bb). (2) General. Subject to paragraphs (c) and (d) of this section, any guaranteed or insured loan made in compliance with this subpart is a safe harbor qualified mortgage. (3) Exempted transactions. The following loans are not subject to challenge under the ability-to-repay requirements of the Truth-in-Lending Act (15 U.S.C. 1639C). (i) A temporary or “bridge” loan with a term of 12 months or less, such as a loan to finance the purchase of a new dwelling where the consumer plans to sell a current dwelling within 12 months or a loan to finance the initial construction of a dwelling; (ii) A construction phase of 12 months or less of a construction-to-permanent loan; (iii) An extension of credit made pursuant to a program administered by a Housing Finance Agency, as defined under 24 CFR 266.5; (iv) An extension of credit made by: (A) A creditor designated as a Community Development Financial Institution, as defined under 12 CFR 1805.104(h); (B) A creditor designated as a Downpayment Assistance through Secondary Financing Provider, pursuant to 24 CFR 200.194(a), operating in accordance with regulations prescribed by the U.S. Department of Housing and Urban Development applicable to suc… | ||||
| 38:38:2.0.1.1.10.2.349.10 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4309 Transfer of title by borrower or maturity by demand or acceleration. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010; 82 FR 11153, Feb. 21, 2017] | (a) Except as provided by paragraphs (b) or (c) of this section the conveyance of or other transfer of title to property by operation of law or otherwise, after the creation of a lien thereon to secure a loan which is guaranteed or insured in whole or in part by the Secretary, shall not constitute an event of default, or acceleration of maturity, elective or otherwise, and shall not of itself terminate or otherwise affect the guaranty or insurance. (b)(1) The Secretary may issue guaranty on loans in which a State, Territorial, or local governmental agency provides assistance to a veteran for the acquisition of a dwelling. Such loans will not be considered ineligible for guaranty if the State, Territorial, or local authority, by virtue of its laws or regulations or by virtue of Federal law, requires the acceleration of maturity of the loan upon the sale or conveyance of the security property to a person ineligible for assistance from such authority. (2) At the time of application for a loan assisted by a State, Territorial, or local governmental agency, the veteran-applicant must be fully informed and consent in writing to the housing authority restrictions. A copy of the veteran's consent statement must be forwarded with the loan application or the report of a loan processed on the automatic basis. (c) Any housing loan which is financed under 38 U.S.C. chapter 37, and to which section 3714 of that chapter applies, shall include a provision in the security instrument that the holder may declare the loan 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 section 3714. (1) A holder may not exercise its option to accelerate a loan upon: (i) The creation of a lien or other encumbrance subordinate to the lender's security instrument which does not relate to the transfer of rights of occupancy in the property; (ii) The creation of a purchase money security interest for household appliances;… | ||||
| 38:38:2.0.1.1.10.2.349.11 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4310 Amortization. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010] | (a) All loans, the maturity date of which is beyond 5 years from date of loan or date of assumption by the veteran, shall be amortized. Except as provided in paragraph (e) of this section, the schedule of payments thereon shall be in accordance with any generally recognized plan of amortization requiring approximately equal periodic payments and shall require a principal reduction not less often than annually during the life of the loan. The final installment on any loan shall not be in excess of two times the average of the preceding installments, except that on a construction loan such installment may be for an amount not in excess of 5 percent of the original principal amount of the loan. The limitations imposed herein on the amount of the final installment shall not apply in the case of any loan extended pursuant to § 36.4315. (b) Any plan of repayment on loans required to be amortized which does not provide for approximately equal periodic payments shall not be eligible unless the plan conforms with the provisions of paragraph (e) of this section, or is otherwise approved by the Secretary. (c) Every guaranteed or insured loan shall be repayable within the estimated economic life of the property securing the loan. (d) Subject to paragraph (a) of this section, any amounts which under the terms of a loan do not become due and payable on or before the last maturity date permissible for loans of its class under the limitations contained in 38 U.S.C. chapter 37 shall automatically fall due on such date. See § 36.4337. (e) A graduated payment mortgage loan, providing for deferrals of interest during the first 5 years of the loan and addition of the deferred amounts to principal shall be eligible, Provided: (1) The loan is for the purpose of acquiring a single-family dwelling unit, including a condominium unit or simultaneously acquiring and improving a previously occupied, existing single-family dwelling unit. (2)(i) For proposed construction or existing homes not previously occupied (new homes), the maximu… | ||||
| 38:38:2.0.1.1.10.2.349.12 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4311 Prepayment. | VA | The debtor shall have the right to prepay at any time, without premium or fee, the entire indebtedness or any part thereof not less than the amount of one installment, or $100, whichever is less. Any prepayment in full of the indebtedness shall be credited on the date received, and no interest may be charged thereafter. Any partial prepayment made on other than an installment due date need not be credited until the next following installment due date or 30 days after such prepayment, whichever is earlier. The holder and the debtor may agree at any time that any prepayment not previously applied in satisfaction of matured installments shall be reapplied for the purpose of curing or preventing any subsequent default. | |||||
| 38:38:2.0.1.1.10.2.349.13 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4312 Interest rates. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010; 80 FR 48255, Aug. 12, 2015] | (a) In guaranteeing or insuring loans under 38 U.S.C. chapter 37, the Secretary may elect to require that such loans either bear interest at a rate that is agreed upon by the veteran and the lender, or bear interest at a rate not in excess of a rate established by the Secretary. The Secretary may, from time to time, change that election by publishing a notice in the Federal Register. However, the interest rate of a loan for the purpose of an interest rate reduction under 38 U.S.C. 3710(a)(8), (a)(9)(B)(i), or (a)(11) must be less than the interest rate of the VA loan being refinanced. This paragraph does not apply in the case of an adjustable rate mortgage being refinanced under 38 U.S.C. 3710(a)(8), (a)(9)(B)(i), or (a)(11) with a fixed rate loan. (b) For loans bearing an interest rate agreed upon by the veteran and the lender, the veteran may pay reasonable discount points in connection with the loan. The discount points may not be included in the loan amount, except for interest rate reduction refinancing loans under 38 U.S.C. 3710(a)(8), (a)(9)(B)(i), and (a)(11). For loans bearing an interest rate agreed upon by the veteran and the lender, the provisions of § 36.4313(d)(6) and (d)(7) do not apply. (c) Except as provided in § 36.4315, interest in excess of the rate reported by the lender when requesting evidence of guaranty or insurance shall not be payable on any advance, or in the event of any delinquency or default: Provided, that a late charge not in excess of an amount equal to 4 percent on any installment paid more than 15 days after due date shall not be considered a violation of this limitation. (d) Effective October 1, 2003, adjustable rate mortgage loans which comply with the requirements of this paragraph (d) are eligible for guaranty. (1) Interest rate index. Changes in the interest rate charged on an adjustable rate mortgage must correspond to changes in the weekly average yield on one year (52 weeks) Treasury bills adjusted to a constant maturity. Yields on one year Treasury bills at “co… | ||||
| 38:38:2.0.1.1.10.2.349.14 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4313 Charges and fees. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010] | (a) No charge shall be made against, or paid by, the borrower incident to the making of a guaranteed or insured loan other than those expressly permitted under paragraph (d) or (e) of this section, and no loan shall be guaranteed or insured unless the lender certifies to the Secretary that it has not imposed and will not impose any charges or fees against the borrower in excess of those permissible under paragraph (d) or (e) of this section. Any charge which is proper to make against the borrower under the provisions of this paragraph may be paid out of the proceeds of the loan: Provided, That if the purpose of the loan is to finance the purchase or construction of residential property the costs of closing the loan including the pro rata portion of the ground rents, hazard insurance premiums, current year's taxes, and other prepaid items normally involved in financing such transaction may not be included in the loan. (b) Except as provided in this subpart, no brokerage or service charge or their equivalent may be charged against the debtor or the proceeds of the loan either initially, periodically, or otherwise. (c) Brokerage or other charges shall not be made against the veteran for obtaining any guaranty or insurance under 38 U.S.C. chapter 37, nor shall any premiums for insurance on the life of the borrower be paid out of the proceeds of a loan. (d) The following schedule of permissible fees and charges shall be applicable to all Department of Veterans Affairs guaranteed or insured loans. (1) The veteran may pay reasonable and customary amounts for any of the following items: (i) Fees of Department of Veterans Affairs appraiser and of compliance inspectors designated by the Department of Veterans Affairs except appraisal fees incurred for the predetermination of reasonable value requested by others than veteran or lender. (ii) Recording fees and recording taxes or other charges incident to recordation. (iii) Credit report. (iv) That portion of taxes, assessments, and other similar items for the current… | ||||
| 38:38:2.0.1.1.10.2.349.15 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4314 Advances and other charges. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010] | (a) A holder may advance any amount reasonably necessary and proper for the maintenance or repair of the security, or for the payment of accrued taxes, special assessments, ground or water rents, or premiums on fire or other casualty insurance against loss of or damage to such property and any such advance so made may be added to the guaranteed or insured indebtedness. A holder may also advance the one-half of one percent funding fee due on a transfer under 38 U.S.C. 3714 when this is not paid at the time of transfer. All security instruments for loans to which 38 U.S.C. 3714 applies must include a clause authorizing the collection of an assumption funding fee and an advance for this fee if it is not paid at the time of transfer. (b) In addition to advances allowable under paragraph (a) of this section, the holder may charge against the proceeds of the sale of the security; may charge against gross amounts collected; may include in any accounting to the Secretary after payment of a claim under the guaranty; may include in the computation of a claim under the guaranty, if lawfully authorized by the loan agreement and subject to § 36.4324(a); or, may include in the computation of an insurance loss, any of the following items actually paid: (1) Any expense which is reasonably necessary for preservation of the security; (2) Court costs in a foreclosure or other proper judicial proceeding involving the security; (3) Other expenses reasonably necessary for collecting the debt, or repossession or liquidation of the security; (4) Reasonable trustee's fees or commissions not in excess of those allowed by statute and in no event in excess of 5 percent of the unpaid indebtedness; (5)(i) Fees for legal services actually performed, not to exceed the reasonable and customary fees for such services in the State where the property is located, as determined by the Secretary. (ii) In determining what constitutes the reasonable and customary fees for legal services, the Secretary shall review allowances for legal fees in con… | ||||
| 38:38:2.0.1.1.10.2.349.16 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4315 Loan modifications. | VA | [76 FR 6558, Feb. 7, 2011, as amended at 76 FR 78829, Dec. 20, 2011; 89 FR 25144, Apr. 10, 2024] | (a) The terms of any guaranteed loan may be modified by a documented agreement between the holder and the borrower, without prior approval of the Secretary, if all of the following conditions are met: (1) The loan is in default; (2) The event or circumstances that caused the default has been or will be resolved and it is not expected to re-occur; (3) The obligor is considered to be a reasonable credit risk, based on a review by the holder of the obligor's creditworthiness under the criteria specified in § 36.4340, including a current credit report. The fact of the recent default will not preclude the holder from determining the obligor is now a satisfactory credit risk provided the holder determines that the obligor is able to resume regular mortgage installments when the modification becomes effective based upon a review of the obligor's current and anticipated income, expenses, and other obligations as provided in § 36.4340; (4) At least 12 monthly payments have been paid since the closing date of the loan; (5) The current owner(s) is obligated to repay the loan, and is party to the loan modification agreement; (6) The loan will be reinstated to performing status by virtue of the loan modification; (7) A loan has not been modified more than once in a 3-year period or more than 3 times during the life of the loan; (8) The loan as modified will bear a fixed-rate of interest, which— (i) May not exceed the most recent Freddie Mac Weekly Primary Mortgage Market Survey Rate for 30-year fixed-rate conforming mortgages (U.S. Average), rounded to the nearest one-eighth of one percent (0.125%), as of the date the Modification Agreement is approved, plus 50 basis points; (ii) After being determined and selected in accordance with paragraph (i), is not more than one percent higher than the existing rate on the loan; or, (iii) In the case of a loan in which a State, Territorial, or local governmental agency provided assistance to the veteran for the acquisition of the dwelling, and the law providing that assistan… | ||||
| 38:38:2.0.1.1.10.2.349.17 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4316 Acceptability of partial payments. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010; 89 FR 25144, Apr. 10, 2024] | A partial payment is a remittance by or on behalf of the borrower on a loan in default (as defined in § 36.4301) of any amount less than the full amount due under the terms of the loan and security instruments at the time the remittance is tendered. (a) Except as provided in paragraph (b) of this section, or upon the express waiver of the Secretary, the mortgage holder shall accept any partial payment and either apply it to the mortgagor's account or identify it with the mortgagor's account and hold it in a special account pending disposition. When partial payments held for disposition aggregate a full monthly installment, including escrow, they shall be applied to the mortgagor's account. (b) A partial payment may be returned to the mortgagor, within 10 calendar days from date of receipt of such payment, with a letter of explanation only if one or more of the following conditions exist: (1) The property is wholly or partially tenant-occupied and rental payments are not being remitted to the holder for application to the loan account; (2) The payment is less than one full monthly installment, including escrows and late charge, if applicable, unless the lesser payment amount has been agreed to under a repayment plan; (3) The payment is less than 50 percent of the total amount then due, unless the lesser payment amount has been agreed to under a repayment plan; (4) The payment is less than the amount agreed to in a repayment plan; (5) The amount tendered is in the form of a personal check and the holder has previously notified the mortgagor in writing that only cash or certified remittances are acceptable; (6) A delinquency of any amount has continued for at least 6 months since the account first became delinquent and no repayment plan has been arranged; (7) Foreclosure has been commenced by the taking of the first action required for foreclosure under local law; or (8) The holder's lien position would be jeopardized by acceptance of the partial payment. (c) A failure by the holder to comply with the pro… | ||||
| 38:38:2.0.1.1.10.2.349.18 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4317 Servicer reporting requirements. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010; 89 FR 25144, Apr. 10, 2024] | (a) Servicers of loans guaranteed by the Secretary shall report the information required by this section to the Secretary electronically. The Secretary shall accept electronic submission from each entity servicing loans guaranteed under 38 U.S.C. chapter 37 not later than the effective date of this rule. (b) Not later than the seventh calendar day of each month each servicer shall report to the Secretary basic information (loan identification information, payment due date, and unpaid principal balance) for every loan guaranteed by the Secretary currently being serviced by that entity, unless previously reported under paragraph (c)(7) of this section and has not reinstated, terminated, or paid in full. (c) Servicers shall report to the Secretary the following specific loan events in accordance with the timeframes described for each event. Unless otherwise specified herein, the servicer shall report these events on a monthly basis ( i.e. , no later than the 7th calendar day of the month following the month in which the event occurred) only for delinquent loans in its portfolio. (1) Loan paid in full—when the loan obligation has been fully satisfied by receipt of funds and not a servicing transfer. The servicer shall report this event regardless of delinquency status. (2) Authorized transfer of ownership—when the servicer learns that an authorized transfer of ownership has been completed. The servicer shall report this event regardless of delinquency status. (3) Release of liability—when an obligor has been released from liability. The servicer shall report this event regardless of delinquency status. (4) Partial release of security—when the holder has released the lien on a part of the security for the loan pursuant to § 36.4327. The servicer shall report this event regardless of delinquency status. (5) Servicing transfer (transferring servicer)—when a holder transfers the loan to another servicer. (6) Servicing transfer (receiving servicer)—when a servicer boards the loan. (7) Electronic Default Notificat… | ||||
| 38:38:2.0.1.1.10.2.349.19 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4318 Servicer tier ranking—temporary procedures. | VA | (a) The Secretary shall assign to each servicer a “Tier Ranking” based upon the servicer's performance in servicing guaranteed loans. There shall be four tiers, known as tier one, tier two, tier three, and tier four, with tier one being the highest rated and tier four the lowest. Upon the effective date of this regulation, every servicer of loans guaranteed by the Secretary shall be presumed to be in servicer tier two, and shall remain in tier two until the date specified in paragraph (c)(2) of this section. (b) For purposes of this section, the term “calendar quarter” shall mean the 3-month periods ending on March 31, June 30, September 30, and December 31. (c)(1) No later than 30 calendar days after the last business day of the first calendar quarter occurring after the rules for determining tier rankings take effect, and then not later than 30 calendar days after the last business day of each subsequent calendar quarter, the Secretary shall provide each servicer with an evaluation of their performance under such rules. (2) No later than 45 calendar days after the last business day of the fourth calendar quarter during which the Secretary evaluates the performance of servicers, and then annually thereafter, VA shall advise each servicer of its tier ranking. (3) Any entity which begins servicing guaranteed loans after the first calendar quarter occurring after rules for determining tier rankings take effect shall be presumed to be in tier two. The Secretary will evaluate the performance of such servicer as provided in paragraph (c)(1) of this section. The Secretary will advise such servicer of its tier ranking at the time other servicers are advised of their tier rankings pursuant to paragraph (c)(2) of this section, provided the servicer has received evaluations for at least four continuous calendar quarters. (d) The quarterly evaluation and tier ranking of a servicer shall be deemed to be confidential and privileged and shall not be disclosed by the Secretary to any other party. | |||||
| 38:38:2.0.1.1.10.2.349.2 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4301 Definitions. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010; 83 FR 64468, Dec. 17, 2018; 89 FR 25143, Apr. 10, 2024] | Whenever used in 38 U.S.C. chapter 37 or subpart F of this part, unless the context otherwise requires, the terms defined in this section shall have the following meaning: A period of more than 180 days. For the purposes of sections 3707 and 3702(a)(2)(C) of title 38 U.S.C., the term a period of more than 180 days shall mean 181 or more calendar days of continuous active duty. Acquisition and improvement loan. A loan to purchase an existing property which includes additional funds for the purpose of installing energy conservation improvements or making other alterations, improvements, or repairs. Alterations. Any structural changes or additions to existing improved realty. Automatic lender. A lender that may process a loan or assumption without submitting the credit package to the Department of Veterans Affairs for underwriting review. Pursuant to 38 U.S.C. 3702(d) there are two categories of lenders who may process loans automatically: (1) Entities such as banks, savings and loan associations, and mortgage and loan companies that are subject to examination by an agency of the United States or any State and (2) Lenders approved by the Department of Veterans Affairs pursuant to standards established by the Department of Veterans Affairs. Condominium. Unless otherwise provided by State law, a condominium is a form of ownership where the buyer receives title to a three dimensional air space containing the individual living unit together with an undivided interest or share in the ownership of common elements. Cost. Cost means the entire consideration paid or payable for or on account of the application of materials and labor to tangible property. Credit package. Any information, reports or verifications used by a lender, holder or authorized servicing agent to determine the creditworthiness of an applicant for a Department of Veterans Affairs guaranteed loan or the assumer of such a loan. Date of first uncured default. Date of first uncured default means the due date of the earliest payment not full… | ||||
| 38:38:2.0.1.1.10.2.349.20 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4319 Servicer loss-mitigation options and incentives. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010; 89 FR 25144, Apr. 10, 2024] | (a) The Secretary will pay a servicer in tiers one, two, or three an incentive payment for each of the following successful loss-mitigation options or alternatives to foreclosure completed: repayment plans, special forbearances, loan modifications, short sales, and deeds-in-lieu of foreclosure. Only one incentive payment will be made with respect to any default required to be reported to the Secretary pursuant to § 36.4317(c). No incentive payment will be made to a servicer in tier four. The options and alternatives are listed in paragraph (b) of this section from top to bottom in their preferred order of consideration ( i.e. , a hierarchy for review), but VA recognizes that individual circumstances may lead to “out of the ordinary” considerations. (b) The amount of the incentive payment is as follows: (c) For purposes of this section, a loss-mitigation option or alternative to foreclosure will be deemed successfully completed as follows: (1) With respect to a repayment plan (as defined in § 36.4301), when the loan reinstates; (2) With respect to special forbearance (as defined in § 36.4301), when the loan reinstates. If a repayment plan is developed at the end of the forbearance period, then the special forbearance is not eligible for an incentive payment, although the subsequent repayment plan may be eligible upon loan reinstatement; (3) With respect to a loan modification, when the modification is executed and the loan reinstates; (4) With respect to a short sale, when the claim under guaranty is filed; or (5) With respect to a deed-in-lieu of foreclosure, when the claim under guaranty is filed. (d) Incentive payments with respect to repayment plans, special forbearances and loan modifications shall be made no less frequently than monthly. For all other successful loss-mitigation options, incentives shall be paid in the final claim payment. (e) The Secretary shall reserve the right to stop an incentive payment to a servicer if the servicer fails to perform adequate servicing. | ||||
| 38:38:2.0.1.1.10.2.349.21 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4320 VA purchase of loans in default. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010; 89 FR 25144, Apr. 10, 2024] | (a) Upon receiving a notice of default or a notice under § 36.4317, the Secretary may require the holder upon penalty of otherwise losing the guaranty or insurance to transfer and assign the loan and the security therefore to the Secretary or to another designated by the Secretary upon receipt of payment in full of the balance of the indebtedness remaining unpaid to the date of such assignment. Such assignment may be made without recourse but the transferor shall not thereby be relieved from the provisions of § 36.4328. (b) If the obligation is assigned or transferred to a third party pursuant to paragraph (a) of this section the Secretary may continue in effect the guaranty or insurance issued with respect to the previous loan in such manner as to cover the assignee or transferee. (c) Servicers must deliver to the Secretary all legal documents, including but not limited to proper loan assignments, required as evidence of proper loan transfer within 60 calendar days from the date that VA sends notice to the servicer that VA has decided to purchase a loan under this section. Servicers exhibiting a continued failure to provide timely loan transfer documentation may, at the discretion of the Secretary and following advance notice to the servicer, be subject to temporary suspension of all property acquisition and claim payments until all deficiencies identified in the notice provided to the servicer have been corrected. | ||||
| 38:38:2.0.1.1.10.2.349.22 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4321 Service of process. | VA | (a) In any legal or equitable proceeding to which the Secretary is a party (including probate and bankruptcy proceedings) arising from a loan guaranteed, insured, or made, or a property acquired by the Secretary pursuant to title 38, U.S.C. chapter 37, original process and any other process prior to appearance that may be served on the Secretary must be delivered to the VA Regional Counsel located in the jurisdiction in which the proceeding is docketed. Copies of such process will also be served on the Attorney General of the United States and the United States Attorney having jurisdiction over that area. Within the time required by applicable law, or rule of court, the Secretary will cause appropriate special or general appearance to be entered in the case by an authorized attorney. (b) After appearance of the Secretary by attorney all process and notice otherwise proper to serve on the Secretary before or after judgment, if served on the attorney of record, shall have the same effect as if the Secretary were personally served within the jurisdiction of the court. | |||||
| 38:38:2.0.1.1.10.2.349.23 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4322 Loan termination. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010; 82 FR 11153, Feb. 21, 2017; 89 FR 25144, Apr. 10, 2024] | (a) For purposes of this part, a holder, using reasonable diligence must complete a foreclosure within the timeframe and in the manner determined by the Secretary. In determining what constitutes allowable time and method for foreclosure, the Secretary shall review allowances for time and method in connection with the foreclosure of single-family housing loans issued by HUD, Fannie Mae, and Freddie Mac, as well as State statutory requirements. The Secretary will review such timeframes annually and, as the Secretary deems necessary, publish in the Federal Register a table setting forth the timeframes and methods the Secretary determines to be reasonable. The schedule will reflect the timeframe allowed for the standard, acceptable method for foreclosure proceedings in each State. The use of another method will require prior approval from VA. VA will maintain the loan termination time allowable timeframes on a Web site under VA's control, such as at http://www.homeloans.va.gov. (b)(1) At least 30 days prior to the scheduled or anticipated date of the liquidation sale, the holder must request that VA assign an appraiser to conduct a liquidation appraisal. (2) If the holder (or its authorized servicing agent) has been approved by the Secretary to process liquidation appraisals under 38 CFR 36.4348, the appraiser shall forward the liquidation appraisal report directly to the holder for a determination of the fair market value of the property pursuant to § 36.4348. (3) If the holder (or its authorized servicing agent) has not been approved by the Secretary to process liquidations appraisals under 38 CFR 36.4348, the Secretary shall review the appraisal and determine the fair market value of the property. The Secretary will provide the holder with a statement of the fair market value. (4)(i) Except as provided in paragraph (b)(4)(ii) of this section, a liquidation appraisal or statement of fair market value issued pursuant to paragraph (b)(3) of this section will be valid for 180 calendar days. (ii) The Secretary… | ||||
| 38:38:2.0.1.1.10.2.349.24 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4323 Election to convey security. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010] | (a) If the holder acquires the property that secured the guaranteed loan at the liquidation sale or through acceptance of a deed-in-lieu of foreclosure and if, under 38 U.S.C. 3732(c), the Secretary may accept conveyance of the property, the holder must notify the Secretary by electronic means no later than 15 calendar days after the date of liquidation sale ( i.e. , the event which fixes the rights of the parties in the property, such as the date of foreclosure sale, date of recordation of a deed-in-lieu of foreclosure, or confirmation/ratification of sale date when required under local practice) that the holder elects to convey the property to the Secretary. The Secretary will not accept conveyance of the property if the holder fails to notify the Secretary of its election within such 15 calendar days. In computing the eligible indebtedness under 38 U.S.C. 3732(c), the holder may follow the alternative procedure described in paragraph (b) of this section. (b) If the calculation by the holder shows that the net value is equal to or less than the unguaranteed portion of the loan ( i.e. , the total indebtedness minus VA's maximum claim payable under the guaranty), this would preclude conveyance under 38 U.S.C. 3732(c). However, the holder may desire to convey the property to VA and may decide to waive a portion of the indebtedness to the extent that the property may be conveyed under 38 U.S.C. 3732(c). In such a case, the holder must provide the notice described in paragraph (a) of this section, and must subsequently waive that portion of the total indebtedness remaining after application of the net value amount and VA's guaranty claim payment. The holder must send the borrower(s) a notice describing the amount of indebtedness that has been waived no later than 15 calendar days after receipt of the guaranty claim. (c) The holder, in accounting to the Secretary in connection with the conveyance of any property pursuant to this section, may include as a part of the indebtedness all actual expenses or costs of the … | ||||
| 38:38:2.0.1.1.10.2.349.25 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4324 Guaranty claims; subsequent accounting. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | (a) Subject to the limitation that the total amounts payable shall in no event exceed the amount originally guaranteed, or in the case of a modified loan, such amount as may have been increased under the provisions of § 36.4315(h)(2), the amount payable on a claim for the guaranty shall be the percentage of the loan originally guaranteed, or the percentage as adjusted under § 36.4315(h)(2), whichever is applicable, applied to the sum of: (1) The unpaid principal as of the date of the liquidation sale; (2) Allowable expenses/advances as described in § 36.4314; and (3) The lesser of: (i) The unpaid interest as of the date of the liquidation sale; or (ii) The unpaid interest for the reasonable period that the Secretary has determined, pursuant to § 36.4322(a), it should have taken to complete the foreclosure, plus 210 days from the due date of the last paid installment. This amount will be increased if the Secretary determines the holder was unable to complete the foreclosure within the time specified in this paragraph due to Bankruptcy proceedings, appeal of the foreclosure by the debtor, the holder granting forbearance in excess of 30 days at the request of the Secretary, or other factors beyond the control of the holder. (b) Deposits or other credits or setoffs legally applicable to the indebtedness shall be applied in reduction of the indebtedness on which the claim is based. Any escrowed or earmarked funds not subject to superior claims of third persons must likewise be so applied. (c)(1) Credits accruing from the proceeds of a liquidation sale shall be reported to the Secretary incident to claim submission, and the amount payable on the claim shall in no event exceed the remaining balance of the indebtedness. (2) The amount payable under the guaranty shall be computed applying the formulae in 38 U.S.C. 3732(c). With respect to a voluntary conveyance to the holder in lieu of foreclosure, the holder shall be deemed to have acquired the property at the liquidation sale for the lesser of the net value of t… | ||||
| 38:38:2.0.1.1.10.2.349.26 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4325 Computation of indebtedness. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | In computing the indebtedness for the purpose of filing a claim for payment of a guaranty or for payment of an insured loss, or in the event of a transfer of the loan under § 36.4320(a), or other accounting to the Secretary, the holder shall not be entitled to treat repayments theretofore made as liquidated damages, or rentals, or otherwise than as payments on the indebtedness, notwithstanding any provision in the note, or mortgage, or otherwise, to the contrary. | ||||
| 38:38:2.0.1.1.10.2.349.27 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4326 Subrogation and indemnity. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | (a) The Secretary shall be subrogated to the contract and the lien or other rights of the holder to the extent of any sum paid on a guaranty or on account of an insured loss, which right shall be junior to the holder's rights as against the debtor or the encumbered property until the holder shall have received the full amount payable under the contract with the debtor. No partial or complete release by a creditor shall impair the rights of the Secretary with respect to the debtor's obligation. (b) The holder, upon request, shall execute, acknowledge and deliver an appropriate instrument tendered for that purpose, evidencing any payment received from the Secretary and the Secretary's resulting right of subrogation. (c) The Secretary shall cause the instrument required by paragraph (b) of this section to be filed for record in the office of the recorder of deeds, or other appropriate office of the proper county, town or State, in accordance with the applicable State law. The filing or failure to file such instrument for record shall have the legal results prescribed by the applicable law of the State where the real or personal property is situated, with respect to filing or failure to so file mortgages and other lien instruments and assignments thereof. The references herein to “filing for record” include “registration” or any similar transaction, by whatever name designated when title to the encumbered property has been “registered” pursuant to a Torrens or other similar title registration system provided by law. (d) As a condition to paying a claim for an insured loss the Secretary may require that the loan, including any security or judgment held therefor, be assigned to the extent of such payment, and if any claim has been filed in bankruptcy, insolvency, probate, or similar proceedings such claim may likewise be required to be so assigned. (e) Any amounts paid by the Secretary on account of the liabilities of any veteran guaranteed or insured under the provisions of 38 U.S.C. chapter 37 shall constitute a … | ||||
| 38:38:2.0.1.1.10.2.349.28 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4327 Release of security. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | (a)(1) Except upon full payment of the indebtedness, or except as provided in paragraph (a)(2) of this section or in paragraphs (e) and (f) of § 36.4322, the holder shall not release a lien or other right in or to real property held as security for a guaranteed or insured loan, or grant a fee or other interest in such property, without prior approval of the Secretary. (2) The holder may, without the prior approval of the Secretary, release the lien on a portion of the property securing the loan provided: (i) The holder has obtained an appraisal from the Secretary showing the value of the security prior to the partial release of the lien and the value of the security on which the lien will remain; (ii) The portion of the property still subject to the lien is fit for dwelling purposes; and (iii) The loan-to-value ratio after the partial release of the lien: (A) Will be not more than 80 percent; or (B) If the loan-to-value ratio after the partial release of the lien is 80 percent or higher, any proceeds received as consideration from the partial release of the lien shall be applied to the unpaid loan balance. (b) A holder may release from the lien personal property including crops without the prior approval of the Secretary. (c) Failure of the holder to comply with the provisions of this section shall not in itself affect the validity of the title of a purchaser to the property released. (d) The release of the personal liability of any obligor on a guaranteed or insured obligation resultant from the act or omission of any holder without the prior approval of the Secretary shall release the obligation of the Secretary as guarantor or insurer, except when such act or omission consists of: (1) Failure to establish the debt as a valid claim against the assets of the estate of any deceased obligor, provided no lien for the guaranteed or insured debt is thereby impaired or destroyed; or (2) An election and appropriate prosecution of legally available effective remedies with respect to the repossession or the li… | ||||
| 38:38:2.0.1.1.10.2.349.29 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4328 Partial or total loss of guaranty or insurance. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | (a) Subject to the incontestable provisions of 38 U.S.C. 3721 as to loans guaranteed or insured on or subsequent to July 1, 1948, there shall be no liability on account of a guaranty or insurance, or any certificate or other evidence thereof, with respect to a transaction in which a signature to the note, the mortgage, or any other loan papers, or the application for guaranty or insurance is a forgery; or in which the certificate of discharge or the certificate of eligibility is counterfeited, or falsified, or is not issued by the Government. (1) Except as to a holder who acquired the loan instrument before maturity, for value, and without notice, and who has not directly or by agent participated in the fraud, or in the misrepresentation hereinafter specified, any willful and material misrepresentation or fraud by the lender, or by a holder, or the agent of either, in procuring the guaranty or the insurance credit, shall relieve the Secretary of liability, or, as to loans guaranteed or insured on, or subsequent to July 1, 1948, shall constitute a defense against liability on account of the guaranty or insurance of the loan in respect to which the willful misrepresentation, or the fraud, is practiced: Provided , that if a misrepresentation, although material, is not made willfully, or with fraudulent intent, it shall have only the consequences prescribed in paragraphs (b) and (c) of this section. (2) [Reserved] (b) In taking security required by 38 U.S.C. chapter 37 and the regulations concerning guaranty or insurance of loans to veterans, a holder shall obtain the required lien on property the title to which is such as to be acceptable to prudent lending institutions, informed buyers, title companies, and attorneys, generally, in the community in which the property is situated: Provided , that a title will not be unacceptable by reason of any of the limitations on the quantum or quality of the property or title stated in § 36.4354(b) and if such holder fails in this respect or fails to comply with 38 U.S.C. … | ||||
| 38:38:2.0.1.1.10.2.349.3 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4302 Computation of guaranties or insurance credits. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010] | (a) With respect to a loan to a veteran guaranteed under 38 U.S.C. 3710 the guaranty shall not exceed the lesser of the dollar amount of entitlement available to the veteran or— (1) 50 percent of the original principal loan amount where the loan amount is not more than $45,000; or (2) $22,500 where the original principal loan exceeds $45,000, but is not more than $56,250; or (3) Except as provided in paragraph (a)(4) of this section, the lesser of $36,000 or 40 percent of the original principal loan amount where the loan amount exceeds $56,250; or (4) The lesser of $60,000 or 25 percent of the original principal loan amount where the loan amount exceeds $144,000 and the loan is for the purchase or construction of a home or the purchase of a condominium unit. (b) With respect to an interest rate reduction refinancing loan guaranteed under 38 U.S.C. 3710(a)(8), (a)(9)(B)(i), or (a)(11), the dollar amount of guaranty may not exceed the greater of the original guaranty amount of the loan being refinanced, or 25 percent of the refinancing loan amount. (c) With respect to a loan for an energy efficient mortgage guaranteed under 38 U.S.C. 3710(d), the amount of the guaranty shall be in the same proportion as would have been provided if the energy efficient improvements were not added to the loan amount, and there shall be no additional charge to the veteran's entitlement as a result of the increased guaranty amount. (d) An amount equal to 15 percent of the original principal amount of each insured loan shall be credited to the insurance account of the lender and shall be charged against the guaranty entitlement of the borrower: Provided, That no loan may be insured unless the borrower has sufficient entitlement remaining to permit such credit. (e) Subject to the provisions of § 36.4303(g), the following formulas shall govern the computation of the amount of the guaranty or insurance entitlement which remains available to an eligible veteran after prior use of entitlement: (1) If a veteran previously secured a n… | ||||
| 38:38:2.0.1.1.10.2.349.30 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4329 Hazard insurance. | VA | The holder shall require insurance policies to be procured and maintained in an amount sufficient to protect the security against the risks or hazards to which it may be subjected to the extent customary in the locality. All moneys received under such policies covering payment of insured losses shall be applied to restoration of the security or to the loan balance. Flood insurance will be required on any building or personal property securing a loan at any time during the term of the loan that such security is located in an area identified by the Federal Emergency Management Agency as having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act, as amended. The amount of flood insurance must be at least equal to the lesser of the outstanding principal balance of the loan or the maximum limit of coverage available for the particular type of property under the National Flood Insurance Act, as amended. The Secretary cannot guarantee a loan for the acquisition or construction of property located in an area identified by the Federal Emergency Management Agency as having special flood hazards unless the community in which such area is situated is then participating in the National Flood Insurance Program. | |||||
| 38:38:2.0.1.1.10.2.349.31 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4330 Substitution of trustees. | VA | In jurisdictions in which valid, any deed of trust or mortgage securing a guaranteed or insured loan, if it names trustees, or confers a power of sale otherwise, shall contain a provision empowering any holder of the indebtedness to appoint substitute trustees, or other person with such power to sell, who shall succeed to all the rights, powers and duties of the trustees, or other person, originally designated. | |||||
| 38:38:2.0.1.1.10.2.349.32 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4331 Capacity of parties to contract. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | Nothing in §§ 36.4300 through 36.4380 shall be construed to relieve any lender of responsibility otherwise existing, for any loss caused by the lack of legal capacity of any person to contract, convey, or encumber, or caused by the existence of other legal disability or defects invalidating, or rendering unenforceable in whole or in part, either the loan obligation or the security therefor. | ||||
| 38:38:2.0.1.1.10.2.349.33 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4332 Geographical limits. | VA | Any real property purchased, constructed, altered, improved, or repaired with the proceeds of a guaranteed or insured loan shall be situated within the United States which for purposes of 38 U.S.C. chapter 37 is here defined as the several States, Territories and possessions, and the District of Columbia, the Commonwealth of Puerto Rico, and the Commonwealth of the Northern Mariana Islands. | |||||
| 38:38:2.0.1.1.10.2.349.34 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4333 Maintenance of records. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015; 86 FR 28708, May 28, 2021] | (a)(1) The holder shall maintain a record of the amounts of payments received on the obligation and disbursements chargeable thereto and the dates thereof, including copies of bills and receipts for such disbursements. These records shall be maintained until the Secretary ceases to be liable as guarantor or insurer of the loan, or, if the Secretary has paid a claim on the guaranty, until 3 years after such claim was paid. For the purpose of any accounting with the Secretary or computation of a claim, any holder who fails to maintain such record and, upon request, make it available to the Secretary for review shall be presumed to have received on the dates due all sums which by the terms of the contract are payable prior to date of claim for default, or to have not made the disbursement for which reimbursement is claimed, and the burden of going forward with evidence and of ultimate proof of the contrary shall be on such holder. (2) The holder shall maintain records supporting their decision to approve any loss mitigation option. The holder shall maintain records supporting their decision to pursue a partial claim payment under the COVID-19 Veterans Assistance Partial Claim Payment program established under subpart F of this part. Such records shall be retained a minimum of 3 years from the date of any incentive paid in accordance with § 36.4319(a) or, in the case of a partial claim payment under the COVID-19 Veterans Assistance Partial Claim Payment program, the date the veteran's guaranteed loan is made current under such program, whichever is later, and shall include, but not be limited to, credit reports, verifications of income, employment, assets, liabilities, and other factors affecting the obligor's credit worthiness, work sheets, and other documents supporting the holder's decision. (3) For any loan where the claim on the guaranty was paid on or after February 1, 2008, or action described in paragraph (a)(2) of this section was taken after February 1, 2008, holders shall submit any documents described i… | ||||
| 38:38:2.0.1.1.10.2.349.35 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4335 Delivery of notice. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015; 82 FR 11153, Feb. 21, 2017] | Except where otherwise specified in this part, any notice required by §§ 36.4300 to 36.4380 to be given the Secretary must be in writing or such other communications medium as may be approved by an official designated in § 36.4345 and delivered, by mail or otherwise, to the VA office at which the guaranty or insurance was issued, or to any changed address of which the holder has been given notice. Such notice must plainly identify the case by setting forth the name of the original veteran-obligor and the file number assigned to the case by the Secretary, if available, or otherwise the name and serial number of the veteran. If mailed, the notice shall be by certified mail when so provided by §§ 36.4800 to 36.4880. | ||||
| 38:38:2.0.1.1.10.2.349.36 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4336 Oversight of servicing. | VA | [86 FR 28708, May 28, 2021] | (a) Subject to notice and opportunity for a hearing, whenever the Secretary finds that any servicer 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 servicer and may bar such servicer from servicing or acquiring guaranteed loans. (b) Notwithstanding paragraph (a) of this section, but subject to § 36.4328, the Secretary will not refuse to pay a guaranty or insurance claim on a guaranteed loan theretofore entered into in good faith between a veteran and such servicer. (c) The Secretary may also refuse either temporarily or permanently to guarantee or insure any loans made by a lender or holder suspended, debarred, denied, or otherwise restricted from participation in FHA's insurance programs pursuant to a determination of the Secretary of Housing and Urban Development. | ||||
| 38:38:2.0.1.1.10.2.349.37 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4337 Conformance of loan instruments. | VA | Regulations issued under 38 U.S.C. chapter 37 and in effect on the date of any loan which is submitted and accepted or approved for a guaranty or for insurance thereunder, shall govern the rights, duties, and liabilities of the parties to such loan and any provisions of the loan instruments inconsistent with such regulations are hereby amended and supplemented to conform thereto. | |||||
| 38:38:2.0.1.1.10.2.349.38 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4338 Supplementary administrative action. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | (a) Notwithstanding any requirement, condition, or limitation stated in or imposed by the regulations concerning the guaranty or insurance of loans to veterans, the Under Secretary for Benefits, or the Executive Director, Loan Guaranty Service, within the limitations and conditions prescribed by the Secretary, is hereby authorized, if he or she finds the interests of the Government are not adversely affected, to relieve undue prejudice to a debtor, holder, or other person, which might otherwise result, provided no such action may be taken which would impair the vested rights of any person affected thereby. If such requirement, condition, or limitation is of an administrative or procedural (not substantive) nature, any employee designated in § 36.4345 is hereby authorized to grant similar relief if he or she finds the failure or error of the lender was due to misunderstanding or mistake and that the interests of the Government are not adversely affected. Provisions of the regulations considered to be of an administrative or procedural (nonsubstantive) nature are limited to the following: (1) The requirement in § 36.4308(a) that a lender obtain in prior approval of the Secretary before closing a joint loan if the lender or class of lenders is eligible or has been approved by the Secretary to close loans on the automatic basis pursuant to 38 U.S.C. 3702(d); (2) The requirements in § 36.4303(l) concerning the giving of notice in assumption cases under 38 U.S.C. 3714; (3) The requirement in § 36.4324(d)(3) that no claim is payable unless it is submitted within 1 year after the liquidation sale; (4) The requirement in § 36.4323(a) to submit notice of election to convey a property to VA within 15 days of the date of liquidation sale; (5) The determination by the holder in § 36.4323(b) of the amount of indebtedness that must be waived in order to make a property eligible for conveyance; (6) The determination in § 36.4314(f)(2) of the date beyond which no additional fees or charges will be allowed; (7) The determin… | ||||
| 38:38:2.0.1.1.10.2.349.39 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4339 Eligibility of loans; reasonable value requirements. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | (a) Evidence of guaranty or insurance shall be issued in respect to a loan for any of the purposes specified in 38 U.S.C. 3710(a) only if all of the following conditions are met: (1) The proceeds of such loan have been used to pay for the property purchased, constructed, repaired, refinanced, altered, or improved. (2) Except as to refinancing loans pursuant to 38 U.S.C. 3710(a)(8), (a)(9)(B)(i), (a)(11), or (b)(7) and energy efficient mortgages pursuant to 38 U.S.C. 3710(d), the loan (including any scheduled deferred interest added to principal) does not exceed the reasonable value of the property or projected reasonable value of a new home which is security for a graduated payment mortgage loan, as appropriate, as determined by the Secretary. For the purpose of determining the reasonable value of a graduated payment mortgage loan to purchase a new home, the reasonable value of the property as of the time the loan is made shall be calculated to increase at a rate not in excess of 2.5 percent per year, but in no event may the projected value of the property exceed 115 percent of the initially established reasonable value. (3) The veteran has certified, in such form as the Secretary may prescribe, that the veteran has paid in cash from his or her own resources on account of such purchase, construction, alteration, repair, or improvement a sum equal to the difference, if any, between the purchase price or cost of the property and its reasonable value. (b) A loan guaranteed under 38 U.S.C. 3710(d) which includes the cost of energy efficient improvements may exceed the reasonable value of the property. The cost of the energy efficient improvements that may be financed may not exceed $3,000; provided, however, that up to $6,000 in energy efficient improvements may be financed 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 efficient improvements. (c) Notwithstanding that the aggregate of the loan amount in the… | ||||
| 38:38:2.0.1.1.10.2.349.4 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4303 Reporting requirements. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010] | (a) With respect to loans automatically guaranteed under 38 U.S.C. 3703(a)(1), evidence of the guaranty will be issuable to a lender of a class described under 38 U.S.C. 3702(d) if the loan is reported to the Secretary not later than 60 days following full disbursement and upon the certification of the lender that: (1) No default exists thereunder that has continued for more than 30 days; (2) Except for acquisition and improvement loans as defined in § 36.4301, any construction, repairs, alterations, or improvements effected subsequent to the appraisal of reasonable value, and paid for out of the proceeds of the loan, which have not been inspected and approved upon completion by a compliance inspector designated by the Secretary, have been completed properly in full accordance with the plans and specifications upon which the original appraisal was based; and any deviations or changes of identity in said property have been approved as required in § 36.4304 concerning guaranty or insurance of loans to veterans; (3) The loan conforms otherwise with the applicable provisions of 38 U.S.C. chapter 37 and of the regulations concerning guaranty or insurance of loans to veterans. (b) Loans made pursuant to 38 U.S.C. 3703(a), although not entitled to automatic insurance thereunder, may, when made by a lender of a class described in 38 U.S.C. 3702(d)(1), be reported for issuance of an insurance credit. (c) Each loan proposed to be made to an eligible veteran by a lender not within a class described in 38 U.S.C. 3702(d) shall be submitted to the Secretary for approval prior to closing. Lenders described in 38 U.S.C. 3702(d) shall have the optional right to submit any loan for such prior approval. The Secretary, upon determining any loan so submitted to be eligible for a guaranty, or for insurance, will issue a certificate of commitment with respect thereto. (d) A certificate of commitment shall entitle the holder to the issuance of the evidence of guaranty or insurance upon the ultimate actual payment of the full proce… | ||||
| 38:38:2.0.1.1.10.2.349.40 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4340 Underwriting standards, processing procedures, lender responsibility, and lender certification. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 79 FR 26628, May 9, 2014; 80 FR 34319, June 16, 2015; 81 FR 40525, June 22, 2016; 83 FR 8946, Mar. 2, 2018; 84 FR 537, Jan. 31, 2019; 85 FR 7232, Feb. 7, 2020; 86 FR 7813, Feb. 2, 2021; 87 FR 3226, Jan. 21, 2022; 88 FR 986, Jan. 6, 2023; 88 FR 2538, Jan. 17, 2023; 89 FR 1460, Jan. 10, 2024; 90 FR 1903, Jan. 10, 2025] | (a) Use of standards. The standards contained in paragraphs (c) through (j) of this section will be used to determine whether the veteran's present and anticipated income and expenses, and credit history, are satisfactory. These standards do not apply to loans guaranteed pursuant to 38 U.S.C. 3710(a)(8) except for cases where the Secretary is required to approve the loan in advance under § 36.4307. (b)(1) Waiver of standards. Use of the standards in paragraphs (c) through (j) of this section for underwriting home loans will be waived only in extraordinary circumstances when the Secretary determines, considering the totality of circumstances, that the veteran is a satisfactory credit risk. (2) Exemption from income verification for certain refinance loans. Notwithstanding paragraphs (a) and (b)(1) of this section, a streamlined refinance loan to be guaranteed pursuant to 38 U.S.C. 3710(a)(8) and (e) is exempt from income verification requirements of the Truth-in-Lending Act (15 U.S.C. 1639C) and its implementing regulations only if all of the following conditions are met: (i) The veteran is not 30 days or more past due on the prior existing residential mortgage loan; (ii) The proposed streamlined refinance loan would not increase the principal balance outstanding on the prior existing residential mortgage loan, except to the extent of fees and charges allowed by VA; (iii) Total points and fees payable in connection with the proposed streamlined refinance loan are in accordance with 12 CFR 1026.32, will not exceed 3 percent of the total new loan amount, and are in compliance with VA's allowable fees and charges found at 38 CFR 36.4313; (iv) The interest rate on the proposed streamlined refinance loan will be lower than the interest rate on the original loan, unless the borrower is refinancing from an adjustable rate to a fixed-rate loan, under guidelines that VA has established; (v) The proposed streamlined refinance loan will be subject to a payment schedule that will fully amortize the IRRRL in accor… | ||||
| 38:38:2.0.1.1.10.2.349.41 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4341 Death or insolvency of holder. | VA | (a) Immediately upon the death of the holder and without the necessity of request or other action by the debtor or the Secretary, all sums then standing as a credit balance in a trust, or deposit, or other account to cover taxes, insurance accruals, or other items in connection with the loan secured by the encumbered property, whether stated to be such or otherwise designated, and which have not been credited on the note shall, nevertheless, be treated as a setoff and shall be deemed to have been credited thereon as of the date of the last debit to such account, so that the unpaid balance of the note as of that date will be reduced by the amount of such credit balance: Provided, that any unpaid taxes, insurance premiums, ground rents, or advances may be paid by the holder of the indebtedness, at the holder's option, and the amount which otherwise would have been deemed to have been credited on the note reduced accordingly. This paragraph shall be applicable whether the estate of the deceased holder is solvent or insolvent. (b) The provisions of paragraph (a) of this section shall also be applicable in the event of: (1) Insolvency of holder; (2) Initiation of any bankruptcy or reorganization, or liquidation proceedings as to the holder, whether voluntary or involuntary; (3) Appointment of a general or ancillary receiver for the holder's property; or in any case; or (4) Upon the written request of the debtor if all secured and due insurance premiums, taxes, and ground rents have been paid, and appropriate provisions made for future accruals. (c) Upon the occurrence of any of the events enumerated in paragraph (a) or (b) of this section, interest on the note and on the credit balance of the deposits mentioned in paragraph (a) shall be set off against each other at the rate payable on the principal of the note, as of the date of last debit to the deposit account. Any excess credit of interest shall be treated as a set-off against the unpaid advances, if any, and the unpaid balance of the note. (d) The provisio… | |||||
| 38:38:2.0.1.1.10.2.349.42 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4342 Qualification for designated fee appraisers. | VA | To qualify for approval as a designated fee appraiser, an applicant must show to the satisfaction of the Secretary that his or her character, experience, and the type of work in which he or she has had experience for at least 5 years qualifies the applicant to competently appraise and value within a prescribed area the type of property to which the approval relates. | |||||
| 38:38:2.0.1.1.10.2.349.43 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4343 Restriction on designated fee appraisers. | VA | (a) A designated fee appraiser shall not make an appraisal, excepting of alterations, improvements, or repairs to real property entailing a cost of not more than $3,500, if such appraiser is an officer, director, trustee, employer, or employee of the lender, contractor, or vendor. (b) An appraisal made by a designated fee appraiser shall be subject to review and adjustment by the Secretary. The amount determined to be proper upon any such review or adjustment shall constitute the “reasonable value” for the purpose of determining the eligibility of the related loan. | |||||
| 38:38:2.0.1.1.10.2.349.44 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4345 Delegation of authority. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015; 81 FR 59138, Aug. 29, 2016; 86 FR 51275, Sept. 15, 2021; 86 FR 52991, Sept. 24, 2021] | (a) Except as hereinafter provided, each employee of the Department of Veterans Affairs heretofore or hereafter appointed to, or lawfully filling, any position designated in paragraph (b) of this section is hereby delegated authority, within the limitations and conditions prescribed by law, to exercise the powers and functions of the Secretary with respect to the guaranty or insurance of loans and the rights and liabilities arising therefrom, including but not limited to the adjudication and allowance, disallowance, and compromise of claims; the collection or compromise of amounts due, in money or other property; the extension, rearrangement, or acquisition of loans; the management and disposition of secured and unsecured notes and other property; and those functions expressly or impliedly embraced within paragraphs (2) through (6) of 38 U.S.C. 3720(a). Incidental to the exercise and performance of the powers and functions hereby delegated, each such employee is authorized to execute and deliver (with or without acknowledgment) for, and on behalf of, the Secretary, evidence of guaranty or of insurance credits and such certificates, forms, conveyances, and other instruments as may be appropriate in connection with the acquisition, ownership, management, sale, transfer, assignment, encumbrance, rental, or other disposition of real or personal property, or, of any right, title, or interest therein, including, but not limited to, contracts of sale, installment contracts, deeds, leases, bills of sale, assignments, and releases; and to approve disbursements to be made for any purpose authorized by 38 U.S.C. chapter 37. (b)(1) Designated positions are as follows: (i) Under Secretary for Benefits. (ii) Principal Deputy Under Secretary for Benefits. (iii) Executive Director, Loan Guaranty Service. (iv) Director, Regional Office. (v) Deputy Director, Loan Guaranty Service. (vi) Assistant Director, Loan Guaranty Service. (vii) Loan Guaranty Officer. (viii) Assistant Loan Guaranty Officer. (ix) Realty Officer, Loan… | ||||
| 38:38:2.0.1.1.10.2.349.45 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4346 Cooperative loans. | VA | (a) To be eligible for guaranty or insurance, any loan of the following types shall require prior approval of the Under Secretary for Benefits, or the Executive Director, Loan Guaranty Service, who may issue such approval upon such conditions and limitations deemed appropriate, not inconsistent with the provisions of 38 U.S.C. chapter 37 and this subpart: (1) Any loan which is related to an enterprise in which more than 10 individuals will participate; or (2) Any loan to be made for the purchase or construction of residential units in any housing development, cooperative or otherwise, the title to which development or to the individual units therein is not to be held directly by the veteran-participants, or which contemplates the ownership or maintenance of more than three units or of their major appurtenances in common. (b) The issuance of such approval with respect to a residential development under paragraph (a)(2) of this section also shall be subject to such conditions and stipulation as in the judgment of the approving officer are possible and proper to: (1) Afford reasonable and feasible protection to the rights of the Government as guarantor or insurer, and as subrogee, and to each veteran-participant against loss of his or her respective equity consequent upon the failure of other participants to discharge their obligations; (2) Provide for a reasonable and workable plan for the operation and management of the project; (3) Limit the personal liability of each veteran-participant to those sums allocable on a proper ratable basis to the purchase, cost, and maintenance of his or her individual unit or participating interest; and (4) Limit commercial features to those reasonably calculated to promote the economic soundness of the project and the living convenience of the participants, retaining the essential character of a residential project. (c) No such project, development, or enterprise may be approved which involves an initial grouping of more than 500 veterans, or a cost of more than five milli… | |||||
| 38:38:2.0.1.1.10.2.349.46 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4347 Lender Appraisal Processing Program. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | (a) Delegation of authority to lenders to review appraisals and determine reasonable value. (1) To be eligible for delegation of authority to review VA appraisals and determine the reasonable value of properties to be purchased with VA guaranteed loans, a lender must— (i) Have automatic processing authority under 38 U.S.C. 3702(d), and (ii) Employ one or more staff appraisal reviewers acceptable to the Secretary. (2) To qualify as a lender's staff appraisal reviewer an applicant must be a full-time member of the lender's permanent staff and may not be employed by, or perform services for, any other mortgagee. The individual must not engage in any private pursuits in which there will be, or appear to be, any conflict of interest between those pursuits and his/her duties, responsibilities, and performance as a Lender Appraisal Processing Program (LAPP) staff appraisal reviewer. Three years of experience is necessary to qualify as a lender's staff appraisal reviewer. That experience must demonstrate a knowledge of, and the ability to apply industry-accepted principles, methods, practices and techniques of appraising, and the ability to competently determine the value of property within a prescribed geographical area. The individual must demonstrate the ability to review the work of others and to recognize deviations from accepted appraisal principles, practices, and techniques; errors in computations, and unjustifiable and unsupportable conclusions. (3) Lenders that meet the requirements of 38 U.S.C. 3702(d), and have a staff appraisal reviewer determined acceptable by VA, will be authorized to review appraisals and make reasonable value determinations on properties that will be security for VA guaranteed loans. The lender's authorization will be subject to a one-year probationary period. Additionally, lenders must satisfy initial and subsequent VA office case review requirements prior to being allowed to determine reasonable value without VA involvement. The initial office case review requirement must be sati… | ||||
| 38:38:2.0.1.1.10.2.349.47 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4348 Servicer Appraisal Processing Program. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | (a) Delegation of authority to servicers to review liquidation appraisals and determine reasonable value. Based on the reasonable value, the servicer will be able to determine net value. (1) To be eligible for delegation of authority to review VA liquidation appraisals and determine the reasonable value for liquidation purposes on properties secured by VA guaranteed or insured loans, a lender must: (i) Have automatic processing authority under 38 U.S.C. 3702(d), and (ii) Employ one or more Staff Appraisal Reviewers (SAR) acceptable to the Secretary. (2) To qualify as a servicer's staff appraisal reviewer an applicant must be a full-time member of the servicer's permanent staff and may not be employed by, or perform services for, any other mortgagee. The individual must not engage in any private pursuits in which there will be, or appear to be, any conflict of interest between those pursuits and his/her duties, responsibilities, and performance as a Servicer Appraisal Processing Program (SAPP) staff appraisal reviewer. Three years of appraisal related experience is necessary to qualify as a servicer's staff appraisal reviewer. That experience must demonstrate knowledge of, and the ability to apply industry-accepted principles, methods, practices and techniques of appraising, and the ability to competently determine the value of property. The individual must demonstrate the ability to review the work of others and to recognize deviations from accepted appraisal principle, practices, and techniques, error in computations, and unjustifiable and unsupportable conclusions. (3) Servicers that have a staff appraisal reviewer determined acceptable to VA, will be authorized to review liquidation appraisals and make reasonable value determinations for liquidation purposes on properties that are the security for VA guaranteed or insured loans. Additionally, servicers must satisfy initial VA office case review requirements prior to being allowed to determine reasonable value without VA involvement. The initial office c… | ||||
| 38:38:2.0.1.1.10.2.349.48 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4349 Waivers, consents, and approvals; when effective. | VA | No waiver, consent, or approval required or authorized by the regulations concerning guaranty or insurance of loans to veterans shall be valid unless in writing signed by the Secretary or the subordinate officer to whom authority has been delegated by the Secretary. | |||||
| 38:38:2.0.1.1.10.2.349.49 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4350 Servicing procedures for holders. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | (a) Establishment of loan servicing program. The holder of a loan guaranteed or insured by the Secretary shall develop and maintain a loan servicing program which follows accepted industry standards for servicing of similar type conventional loans. The loan servicing program established pursuant to this section may employ different servicing approaches to fit individual borrower circumstances and avoid establishing a fixed routine. However, it must incorporate each of the provisions specified in paragraphs (b) through (l) of this section. (b) Procedures for providing information. (1) Loan holders shall establish procedures to provide loan information to borrowers, arrange for individual loan consultations upon request and maintain controls to assure prompt responses to inquiries. One or more of the following means of making information readily available to borrowers is required. (i) An office staffed with trained servicing personnel with access to loan account information located within 200 miles of the property. (ii) Toll-free telephone service or acceptance of collect telephone calls at an office capable of providing needed information. (2) All borrowers must be informed of the system available for obtaining answers to loan inquiries, the office from which the needed information may be obtained, and reminded of the system at least annually. (c) Statement for income tax purposes. Before February 1st of each calendar year, the holder shall furnish to the borrower a statement of the interest paid and, if applicable, a statement of the taxes disbursed from the escrow account during the preceding year. At the borrower's request, the holder shall furnish a statement of the escrow account sufficient to enable the borrower to reconcile the account. (d) Change of servicing. Whenever servicing of a loan guaranteed or insured by the Secretary is transferred from one holder to another, notice of such transfer by both the transferor and transferee, the form and content of such notice, the timing of such notice… | ||||
| 38:38:2.0.1.1.10.2.349.5 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4304 Deviations; changes of identity. | VA | A deviation of more than 5 percent between the estimates upon which a certificate of commitment has been issued and the report of final payment of the proceeds of the loan, or a change in the identity of the property upon which the original appraisal was based, will invalidate the certificate of commitment unless such deviation or change be approved by the Secretary. Any deviation in excess of 5 percent or change in the identity of the property upon which the original appraisal was based must be supported by a new or supplemental appraisal of reasonable value: Provided, That substitution of materials of equal or better quality and value approved by the veteran and the designated appraiser shall not be deemed a “change in the identity of the property” within the purview of this section. A deviation not in excess of 5 percent will not require the prior approval of the Secretary. | |||||
| 38:38:2.0.1.1.10.2.349.50 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4351 Minimum property and construction requirements. | VA | [79 FR 2101, Jan. 13, 2014] | No loan for the purchase or construction of residential property shall be eligible for guaranty or insurance unless such property complies or conforms with those standards of planning, construction, and general acceptability that may be applicable thereto and prescribed by the Secretary pursuant to 38 U.S.C. 3704(a) or 38 U.S.C. 3710(b)(4), or both such sections, as applicable. | ||||
| 38:38:2.0.1.1.10.2.349.51 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4352 Authority to close loans on the automatic basis. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | (a) Supervised lender authority. Supervised lenders of the classes described in 38 U.S.C. 3702(d)(1) and (2) are authorized by statute to process VA guaranteed home loans on the automatic basis. This category of lenders includes 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 by any State. (b) Non-supervised lender authority. Non-supervised lenders of the class described in 38 U.S.C. 3702(d)(3) must apply to the Secretary for authority to process loans on the automatic basis. Each of the minimum requirements listed below must be met by applicant lenders. (1) Experience. The applicant lender must meet one of the following experience requirements: (i) The applicant lender must have been actively engaged in originating VA loans for at least two years, have a VA Lender ID number and have originated and closed a minimum of ten VA loans within the past two years, excluding interest rate reduction refinance loans (IRRRLs), that have been properly documented and submitted in compliance with VA requirements and procedures; or (ii) The applicant lender must have a VA ID number and, if active for less than two years, have originated and closed at least 25 VA loans, excluding IRRRLs, that have been properly documented and submitted in compliance with VA requirements and procedures; or (iii) Each principal officer of the applicant lender, who is actively involved in managing origination functions, must have a minimum of two recent years' management experience in the origination of VA loans. This experience may be with the current or prior employer. For the purposes of this requirement, principal officer is defined as president or vice president; or (iv) If the applicant lender has been operating as an agent for a non-supervised automatic lender (sponsoring lender), the firm must submit documentation confirming… | ||||
| 38:38:2.0.1.1.10.2.349.52 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4353 Withdrawal of authority to close loans on the automatic basis. | VA | (a)(1) As provided in 38 U.S.C. 3702(e), the authority of any lender to close loans on the automatic basis may be withdrawn by the Secretary at any time upon 30 days notice. The automatic processing authority of both supervised and non-supervised lenders may be withdrawn for engaging in practices which are imprudent from a lending standpoint or which are prejudicial to the interests of veterans or the Government but are of a lesser degree than would warrant complete suspension or debarment of the lender from participation in the program. (2) Automatic-processing authority may be withdrawn at any time for failure to meet basic qualifying and/or annual recertification criteria. (i) Non-supervised lenders. (A) Automatic authority may be withdrawn for lack of a VA-approved underwriter, failure to maintain $50,000 in working capital or $250,000 in adjusted net worth, or failure to file required financial information. (B) During the 1-year probationary period for newly approved lenders, automatic authority may be temporarily or permanently withdrawn for any of the reasons set forth in this section regardless of whether deficiencies previously have been brought to the attention of the probationary lender. (ii) Supervised lenders. Automatic authority will be withdrawn for loss of status as an entity subject to examination and supervision by a Federal or State supervisory agency as required by 38 U.S.C. 3702(d). (3) Automatic processing authority may also be withdrawn for any of the causes for debarment set forth in 2 CFR parts 180 and 801. (b) Authority to close loans on the automatic basis may also be temporarily withdrawn for a period of time under the following schedule. (1) Withdrawal for 60 days may occur when: (i) Automatic loan submissions show deficiencies in credit underwriting, such as use of unstable sources of income to qualify the borrower, ignoring significant adverse credit items affecting the applicant's creditworthiness, etc., after such deficiencies have been repeatedly called to the lender'… | |||||
| 38:38:2.0.1.1.10.2.349.53 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4354 Estate of veteran in real property. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | (a) The title of the estate in the realty acquired by the veteran, wholly or partly with the proceeds of a guaranteed or insured loan, or owned by him and on which construction, or repairs, or alterations or improvements are to be made, shall be such as is acceptable to informed buyers, title companies, and attorneys, generally, in the community in which the property is situated, except as modified by paragraph (b) of this section. Such estate shall be not less than: (1) A fee simple estate therein, legal or equitable; or (2) A leasehold estate running or renewable at the option of the lessee for a period of not less than 14 years from the maturity of the loan, or to any earlier date at which the fee simple title will vest in the lessee, which is assignable or transferable, if the same be subjected to the lien; however, a leasehold estate which is not freely assignable and transferable will be considered an acceptable estate if it is determined by the Under Secretary for Benefits, or the Executive Director, Loan Guaranty Service: (i) That such type of leasehold is customary in the area where the property is located, (ii) That a veteran or veterans will be prejudiced if the requirement for free assignability is adhered to; and (iii) That the assignability and other provisions applicable to the leasehold estate are sufficient to protect the interests of the veteran and the Government and are otherwise acceptable; or (3) A life estate, provided that the remainder and reversionary interests are subjected to the lien; or (4) A beneficial interest in a revocable Family Living Trust that ensures that the veteran, or veteran and spouse, have an equitable life estate, provided the lien attaches to any remainder interest and the trust arrangement is valid under State law. (b) Any such property or estate will not fail to comply with the requirements of paragraph (a) of this section by reason of the following: (1) Encroachments; (2) Easements; (3) Servitudes; (4) Reservations for water, timber, or subsurface righ… | ||||
| 38:38:2.0.1.1.10.2.349.54 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4355 Loans, first, second, or unsecured. | VA | [73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 80 FR 34319, June 16, 2015] | Loans for the purchase of real property or a leasehold estate as limited in the regulations concerning guaranty or insurance of loans to veterans, or for the alteration, improvement, or repair thereof, and for more than $1,500 and more than 40 percent of the reasonable value of such property or estate prior thereto shall be secured by a first lien on the property or estate. Loans for such alteration, improvement, or repairs for more than $1,500 but 40 percent or less of the prior reasonable value of the property shall be secured by a lien reasonable and customary in the community for the type of alteration, improvement, or repair financed. Those for $1,500 or less need not be secured, and in lieu of the title examination the lender may accept a statement from the borrower that he or she has an interest in the property not less than that prescribed in § 36.4354(a). | ||||
| 38:38:2.0.1.1.10.2.349.55 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4356 Tax, special assessment and other liens. | VA | Tax liens, special assessment liens, and ground rents shall be disregarded with respect to any requirement that loans shall be secured by a lien of specified dignity. With the prior approval of the Secretary, Under Secretary for Benefits, or Executive Director, Loan Guaranty Service, liens retained by nongovernmental entities to secure assessments or charges for municipal type services and facilities clearly within the public purpose doctrine may be disregarded. In determining whether a loan for the purchase or construction of a home is secured by a first lien the Secretary may also 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. | |||||
| 38:38:2.0.1.1.10.2.349.56 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4357 Combination residential and business property. | VA | If otherwise eligible, a loan for the purchase or construction of a combination of residential property and business property which the veteran proposes to occupy in part as a home will be eligible under 38 U.S.C. 3710, if the property is primarily for residential purposes and no more than one business unit is included in the property. | |||||
| 38:38:2.0.1.1.10.2.349.57 | 38 | Pensions, Bonuses, and Veterans' Relief | I | 36 | PART 36—LOAN GUARANTY | B | Subpart B—Guaranty or Insurance of Loans to Veterans With Electronic Reporting | § 36.4358 [Reserved] | VA |
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CREATE TABLE cfr_sections (
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title_number INTEGER,
title_name TEXT,
chapter TEXT,
subchapter TEXT,
part_number TEXT,
part_name TEXT,
subpart TEXT,
subpart_name TEXT,
section_number TEXT,
section_heading TEXT,
agency TEXT,
authority TEXT,
source_citation TEXT,
amendment_citations TEXT,
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CREATE INDEX idx_cfr_title ON cfr_sections(title_number);
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CREATE INDEX idx_cfr_agency ON cfr_sections(agency);