
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document affected by Public Law 107-103 Section 405(a)]
[CITE: 38USC3702]

 
                      TITLE 38--VETERANS' BENEFITS
 
               PART III--READJUSTMENT AND RELATED BENEFITS
 
              CHAPTER 37--HOUSING AND SMALL BUSINESS LOANS
 
                          SUBCHAPTER I--GENERAL
 
Sec. 3702. Basic entitlement

    (a)(1) The veterans described in paragraph (2) of this subsection 
are eligible for the housing loan benefits of this chapter. In the case 
of any veteran who served on active duty during two or more of the 
periods specified in paragraph (2) for which eligibility for the housing 
loan benefits under this chapter may be granted, entitlement derived 
from service during the most recent such period (A) shall cancel any 
unused entitlement derived from service during any earlier such period, 
and (B) shall be reduced by the amount by which entitlement from service 
during any earlier such period has been used to obtain a direct, 
guaranteed, or insured housing loan--
        (i) on real property which the veteran owns at the time of 
    application; or
        (ii) as to which the Secretary has incurred actual liability or 
    loss, unless in the event of loss or the incurrence and payment of 
    such liability by the Secretary the resulting indebtedness of the 
    veteran to the United States has been paid in full.

    (2) The veterans referred to in the first sentence of paragraph (1) 
of this subsection are the following:
        (A) Each veteran who served on active duty at any time during 
    World War II, the Korean conflict, or the Vietnam era and whose 
    total service was for 90 days or more.
        (B) Each veteran who after September 15, 1940, was discharged or 
    released from a period of active duty for a service-connected 
    disability.
        (C) Each veteran, other than a veteran described in clause (A) 
    or (B) of this paragraph, who--
            (i) served after July 25, 1947, for a period of more than 
        180 days and was discharged or released therefrom under 
        conditions other than dishonorable; or
            (ii) has served more than 180 days in active duty status and 
        continues on active duty without a break therein.

        (D) Each veteran who served on active duty for 90 days or more 
    at any time during the Persian Gulf War, other than a veteran 
    ineligible for benefits under this title by reason of section 
    5303A(b) of this title.
        (E) For the period beginning on October 28, 1992, and ending on 
    September 30, 2007, each veteran described in section 3701(b)(5) of 
    this title.

    (3) Any unused entitlement of World War II or Korean conflict 
veterans which expired under provisions of law in effect before October 
23, 1970, is hereby restored and shall not expire until used.
    (4) A veteran's entitlement under this chapter shall not be reduced 
by any entitlement used by the veteran's spouse which was based upon the 
provisions of paragraph (3) of section 3701(b) of this title.
    (b) In computing the aggregate amount of guaranty or insurance 
housing loan entitlement available to a veteran under this chapter, the 
Secretary may exclude the amount of guaranty or insurance housing loan 
entitlement used for any guaranteed, insured, or direct loan under the 
following circumstances:
        (1)(A) The property which secured the loan has been disposed of 
    by the veteran or has been destroyed by fire or other natural 
    hazard; and
        (B) the loan has been repaid in full, or the Secretary has been 
    released from liability as to the loan, or if the Secretary has 
    suffered a loss on such loan, the loss has been paid in full.
        (2) A veteran-transferee has agreed to assume the outstanding 
    balance on the loan and consented to the use of the veteran-
    transferee's entitlement, to the extent that the entitlement of the 
    veteran-transferor had been used originally, in place of the 
    veteran-transferor's for the guaranteed, insured, or direct loan, 
    and the veteran-transferee otherwise meets the requirements of this 
    chapter.
        (3)(A) The loan has been repaid in full; and
        (B) the loan for which the veteran seeks to use entitlement 
    under this chapter is secured by the same property which secured the 
    loan referred to in subparagraph (A) of this paragraph.
        (4) In a case not covered by paragraph (1) or (2)--
            (A) the loan has been repaid in full and, if the Secretary 
        has suffered a loss on the loan, the loss has been paid in full; 
        or
            (B) the Secretary has been released from liability as to the 
        loan and, if the Secretary has suffered a loss on the loan, the 
        loss has been paid in full.

The Secretary may, in any case involving circumstances the Secretary 
deems appropriate, waive one or more of the conditions prescribed in 
paragraph (1). The authority of the Secretary under this subsection to 
exclude an amount of guaranty or insurance housing loan entitlement 
previously used by a veteran may be exercised only once for that veteran 
under the authority of paragraph (4).
    (c) An honorable discharge shall be deemed to be a certificate of 
eligibility to apply for a guaranteed loan. Any veteran who does not 
have a discharge certificate, or who received a discharge other than 
honorable, may apply to the Secretary for a certificate of eligibility. 
Upon making a loan guaranteed or insured under this chapter, the lender 
shall forthwith transmit to the Secretary a report thereon in such 
detail as the Secretary may, from time to time, prescribe. Where the 
loan is guaranteed, the Secretary shall provide the lender with a loan 
guaranty certificate or other evidence of the guaranty. The Secretary 
shall also endorse on the veteran's discharge, or eligibility 
certificate, the amount and type of guaranty used, and the amount, if 
any, remaining. Nothing in this chapter shall preclude the assignment of 
any guaranteed loan or the security therefor.
    (d) Housing loans will be automatically guaranteed under this 
chapter only if made (1) by any Federal land bank, national bank, State 
bank, private bank, building and loan association, insurance company, 
credit union, or mortgage and loan company, that is subject to 
examination and supervision by an agency of the United States or of any 
State, or (2) by any State, or (3) by any lender approved by the 
Secretary pursuant to standards established by the Secretary. Any 
housing loan proposed to be made to a veteran pursuant to this chapter 
by any lender not of a class specified in the preceding sentence may be 
guaranteed by the Secretary if the Secretary finds that it is in accord 
otherwise with the provisions of this chapter.
    (e) The Secretary may at any time upon thirty days' notice require 
housing loans to be made by any lender or class of lenders to be 
submitted to the Secretary for prior approval. No guaranty or insurance 
liability shall exist with respect to any such loan unless evidence of 
guaranty or insurance is issued by the Secretary.
    (f) Any housing loan at least 20 percent of which is guaranteed 
under this chapter may be made by any national bank or Federal savings 
and loan association, or by any bank, trust company, building and loan 
association, or insurance company, organized or authorized to do 
business in the District of Columbia. Any such loan may be so made 
without regard to the limitations and restrictions of any other law 
relating to--
        (1) ratio of amount of loan to the value of the property;
        (2) maturity of loan;
        (3) requirement for mortgage or other security;
        (4) dignity of lien; or
        (5) percentage of assets which may be invested in real estate 
    loans.

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


                               Amendments

    1999--Subsec. (a)(2)(E). Pub. L. 106-117 substituted ``September 30, 
2007'' for ``September 30, 2003''.
    1998--Subsec. (a)(2)(E). Pub. L. 105-368 substituted ``September 30, 
2003'' for ``October 27, 1999''.
    1994--Subsec. (a)(2)(E). Pub. L. 103-446, Sec. 1201(f)(4), 
substituted ``For the period beginning on October 28, 1992, and ending 
on October 27, 1999,'' for ``For the 7-year period beginning on the date 
of enactment of this subparagraph,''.
    Subsec. (b). Pub. L. 103-446, Sec. 902(1), (6), (7), in introductory 
provisions, substituted ``loan under the following circumstances:'' for 
``loan, if--'', and in concluding provisions, substituted ``paragraph 
(1)'' for ``clause (1) of the preceding sentence'' and inserted at end 
``The authority of the Secretary under this subsection to exclude an 
amount of guaranty or insurance housing loan entitlement previously used 
by a veteran may be exercised only once for that veteran under the 
authority of paragraph (4).''
    Subsec. (b)(1). Pub. L. 103-446, Sec. 902(2), substituted ``The 
property'' for ``the property'' in subpar. (A) and a period for the 
semicolon at end of subpar. (B).
    Subsec. (b)(2). Pub. L. 103-446, Sec. 902(3), substituted ``A 
veteran-transferee'' for ``a veteran-transferee'' and a period for ``; 
or'' at end.
    Subsec. (b)(3)(A). Pub. L. 103-446, Sec. 902(4), substituted ``The 
loan'' for ``the loan''.
    Subsec. (b)(4). Pub. L. 103-446, Sec. 902(5), added par. (4).
    1992--Subsec. (a)(2)(E). Pub. L. 102-547 added subpar. (E).
    1991--Pub. L. 102-83, Sec. 5(a), renumbered section 1802 of this 
title as this section.
    Subsec. (a)(2)(D). Pub. L. 102-40 substituted ``5303A(b)'' for 
``3103A(b)''.
    Pub. L. 102-25 added subpar. (D).
    Subsec. (a)(4). Pub. L. 102-83, Sec. 5(c)(1), substituted 
``3701(b)'' for ``1801(b)''.
    1989--Subsecs. (a)(1)(ii), (b). Pub. L. 101-237, Sec. 313(b)(1), 
substituted ``Secretary'' for ``Administrator'' wherever appearing.
    Subsec. (b)(3). Pub. L. 101-237, Sec. 310, added par. (3).
    Subsecs. (c) to (e). Pub. L. 101-237, Sec. 313(b)(1), substituted 
``Secretary'' for ``Administrator'' wherever appearing.
    1988--Subsec. (a)(1). Pub. L. 100-322, Sec. 415(a)(1)(A)-(E), 
designated existing provisions as par. (1), substituted ``The veterans 
described in paragraph (2) of this subsection are eligible for the 
housing loan benefits of this chapter'' for ``Each veteran who served on 
active duty at any time during World War II, the Korean conflict, or the 
Vietnam era and whose total service was for ninety days or more, or who 
was discharged or released from a period of active duty, any part of 
which occurred during World War II, the Korean conflict, or the Vietnam 
era, for a service-connected disability, shall be eligible for the 
housing loan benefits of this chapter'', substituted ``in paragraph 
(2)'' for ``in the preceding sentence, or in section 1818 of this 
title,'' and redesignated former cls. (1) and (2) as cls. (A) and (B), 
respectively, and former cls. (A) and (B) as subcls. (i) and (ii), 
respectively.
    Subsec. (a)(2), (3). Pub. L. 100-322, Sec. 415(a)(1)(F), added pars. 
(2) and (3).
    Subsec. (a)(4). Pub. L. 100-322, Sec. 415(a)(2), redesignated 
subsec. (g) as (a)(4) and substituted ``1801(b)'' for ``1801(a)''.
    Subsec. (g). Pub. L. 100-322, Sec. 415(a)(2)(B), redesignated 
subsec. (g) as (a)(4).
    1984--Subsec. (b)(2). Pub. L. 98-223 substituted ``a'' for ``an 
immediate''.
    1982--Subsec. (f). Pub. L. 97-295 substituted ``percent'' for ``per 
centum''.
    1981--Subsec. (a). Pub. L. 97-72, Sec. 303(b)(1), (2), substituted 
``the housing loan benefits'' for ``the benefits'' in two places and 
``insured housing loan'' for ``insured loan''.
    Subsec. (b). Pub. L. 97-72, Sec. 303(b)(3), substituted ``insurance 
housing loan entitlement'' for ``insurance entitlement'' in two places.
    Subsec. (d). Pub. L. 97-72, Sec. 303(b)(4), (5), substituted 
``Housing loans will be automatically guaranteed'' for ``Loans will be 
automatically guaranteed'' and ``Any housing loan proposed'' for ``Any 
loan proposed''.
    Subsec. (e). Pub. L. 97-72, Sec. 303(b)(6), substituted ``require 
housing loans'' for ``require loans''.
    Subsec. (f). Pub. L. 97-72, Sec. 303(b)(7), substituted ``Any 
housing loan at least'' for ``Any loan at least''.
    1978--Subsec. (a). Pub. L. 95-476, Sec. 102(a), inserted provisions 
entitling Vietnam era veterans to the benefits of this chapter and 
including such veterans in the cancellation of unused entitlement 
derived from earlier service and the reduction of current entitlement 
provisions of this subsection.
    Subsec. (b). Pub. L. 95-476, Sec. 102(b), redesignated cl. (1) as 
(1)(A), cl. (2) as (B), cl. (3) as (2), and struck out reference to cl. 
(2) in provision authorizing the Administrator to waive certain 
conditions prescribed in this subsection.
    1976--Subsec. (b). Pub. L. 94-324, Sec. 7(3), substituted ``the 
Administrator deems'' for ``he deems'' and ``the veteran-transferee's 
entitlement'' for ``his entitlement''.
    Subsec. (c). Pub. L. 94-324, Sec. 7(4), substituted ``The 
Administrator'' for ``He''.
    Subsec. (d). Pub. L. 94-324, Sec. 7(4), substituted ``the 
Administrator'' for ``him'' and ``he''.
    Subsec. (e). Pub. L. 94-324, Sec. 7(5), substituted ``the 
Administrator'' for ``him'' in first sentence.
    Subsec. (g). Pub. L. 94-324, Sec. 7(5), substituted ``the veteran's 
spouse'' for ``his wife''.
    1974--Subsec. (b). Pub. L. 93-569, Sec. 2(a), expanded provisions so 
as to permit restoration of a veteran's entitlement to a guaranteed, 
insured, or direct loan provided any prior loan has been paid in full, 
and the property has been disposed of by the veteran, or any immediate 
veteran-transferee has agreed to the use of his veteran's entitlement.
    Subsec. (d)(3). Pub. L. 93-569, Sec. 2(b), substituted provisions 
relating to any lender approved by Administrator pursuant to standards 
established by him, for provisions relating to approval of mortgagees by 
Secretary of Housing and Urban Development and designated by him as 
certified agent.
    1970--Subsec. (b). Pub. L. 91-506 struck out loan eligibility 
expiration dates for World War II and Korean conflict veterans.
    Subsec. (g). Pub. L. 91-584 added subsec. (g).
    1967--Subsec. (b). Pub. L. 90-77 extended loan program for certain 
World War II veterans from July 26, 1967 to July 26, 1970.
    Subsec. (d). Pub. L. 90-19 substituted ``mortgagee approved by the 
Secretary of Housing and Urban Development and designated by him'' for 
``Federal Housing Administration approved mortgagee designated by the 
Federal Housing Commissioner''.
    1961--Subsec. (b). Pub. L. 87-84 substituted in last sentence ``by a 
World War II veteran at any time before July 26, 1967, and by a Korean 
conflict veteran at any time before February 1, 1975'' for ``at any time 
before February 1, 1965''.
    1959--Subsec. (d)(3). Pub. L. 86-73 added cl. (3).


                    Effective Date of 1998 Amendment

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


                    Effective Date of 1981 Amendment

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


                    Effective Date of 1978 Amendment

    Section 108 of title I of Pub. L. 95-476 provided that:
    ``(a) Except as provided in subsection (b) of this section, the 
amendments made by this title [see Tables for classification] shall take 
effect on October 1, 1978.
    ``(b) The amendment made by clause (1) of section 104 of this title 
[amending section 1810 [now 3710] shall take effect on July 1, 1979, 
except with respect to the authority to prescribe regulations for the 
implementation of such amendment, which shall be effective on the date 
of the enactment of this Act [Oct. 18, 1978].''


                    Effective Date of 1976 Amendment

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


                    Effective Date of 1974 Amendment

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


                    Effective Date of 1967 Amendment

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


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

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


                        References in Other Laws

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


                   Technical Nature of 1986 Amendments

    Section 415(f) of Pub. L. 100-322 provided that: ``The status of any 
veteran with respect to benefits under chapter 37 of title 38, United 
States Code, shall not be affected by the amendments made by, or other 
provisions of, this section [see Tables for classification].''

                  Section Referred to in Other Sections

    This section is referred to in sections 3703, 3710, 3712, 3714, 
3731, 3744, 5102 of this title; title 12 section 1715z-13a.
