
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 401]
[CITE: 38USC3703]

 
                      TITLE 38--VETERANS' BENEFITS
 
               PART III--READJUSTMENT AND RELATED BENEFITS
 
              CHAPTER 37--HOUSING AND SMALL BUSINESS LOANS
 
                          SUBCHAPTER I--GENERAL
 
Sec. 3703. Basic provisions relating to loan guaranty and 
        insurance
        
    (a)(1)(A) Any loan to a veteran eligible for benefits under this 
chapter, if made for any of the purposes specified in section 3710 of 
this title and in compliance with the provisions of this chapter, is 
automatically guaranteed by the United States in an amount not to exceed 
the lesser of--
        (i)(I) in the case of any loan of not more than $45,000, 50 
    percent of the loan;
        (II) in the case of any loan of more than $45,000, but not more 
    than $56,250, $22,500;
        (III) except as provided in subclause (IV) of this clause, in 
    the case of any loan of more than $56,250, the lesser of $36,000 or 
    40 percent of the loan; or
        (IV) in the case of any loan of more than $144,000 for a purpose 
    specified in clause (1), (2), (3), (6), or (8) of section 3710(a) of 
    this title, the lesser of $50,750 or 25 percent of the loan; or
        (ii) the maximum amount of guaranty entitlement available to the 
    veteran as specified in subparagraph (B) of this paragraph.

    (B) The maximum amount of guaranty entitlement available to a 
veteran for purposes specified in section 3710 of this title shall be 
$36,000, or in the case of a loan described in subparagraph (A)(i)(IV) 
of this paragraph, $50,750, reduced by the amount of entitlement 
previously used by the veteran under this chapter and not restored as a 
result of the exclusion in section 3702(b) of this title.
    (2)(A) Any housing loan which might be guaranteed under the 
provisions of this chapter, when made or purchased by any financial 
institution subject to examination and supervision by any agency of the 
United States or of any State may, in lieu of such guaranty, be insured 
by the Secretary under an agreement whereby the Secretary will reimburse 
any such institution for losses incurred on such loan up to 15 per 
centum of the aggregate of loans so made or purchased by it.
    (B) Loans insured under this section shall be made on such other 
terms, conditions, and restrictions as the Secretary may prescribe 
within the limitations set forth in this chapter.
    (b) The liability of the United States under any guaranty, within 
the limitations of this chapter, shall decrease or increase pro rata 
with any decrease or increase of the amount of the unpaid portion of the 
obligation.
    (c)(1) Loans guaranteed or insured under this chapter shall be 
payable upon such terms and conditions as may be agreed upon by the 
parties thereto, subject to the provisions of this chapter and 
regulations of the Secretary issued pursuant to this chapter, and shall 
bear interest not in excess of such rate as the Secretary may from time 
to time find the loan market demands, except that in establishing the 
rate of interest that shall be applicable to such loans, the Secretary 
shall consult with the Secretary of Housing and Urban Development 
regarding the rate of interest applicable to home loans insured under 
section 203(b) of the National Housing Act (12 U.S.C. 1709(b)). In 
establishing rates of interest under this paragraph for one or more of 
the purposes described in clauses (4) and (7) of section 3710(a) of this 
title, the Secretary may establish a rate or rates higher than the rate 
specified for other purposes under such section, but any such rate may 
not exceed such rate as the Secretary may from time to time find the 
loan market demands for loans for such purposes.
    (2) The provisions of the Servicemen's Readjustment Act of 1944 
which were in effect before April 1, 1958, with respect to the interest 
chargeable on loans made or guaranteed under such Act shall, 
notwithstanding the provisions of paragraph (1) of this subsection, 
continue to be applicable--
        (A) to any loan made or guaranteed before April 1, 1958; and
        (B) to any loan with respect to which a commitment to guarantee 
    was entered into by the Secretary before April 1, 1958.

    (3) This section shall not be construed to prohibit a veteran from 
paying to a lender any reasonable discount required by such lender, when 
the proceeds from the loan are to be used--
        (A) to refinance indebtedness pursuant to clause (5), (8), or 
    (9)(B)(i) of section 3710(a) of this title or section 3712(a)(1)(F) 
    of this title;
        (B) to repair, alter, or improve a farm residence or other 
    dwelling pursuant to clauses (4) and (7) of section 3710(a) of this 
    title;
        (C) to construct a dwelling or farm residence on land already 
    owned or to be acquired by the veteran except where the land is 
    directly or indirectly acquired from a builder or developer who has 
    contracted to construct such dwelling for the veteran;
        (D) to purchase a dwelling from a class of sellers which the 
    Secretary determines are legally precluded under all circumstances 
    from paying such a discount if the best interest of the veteran 
    would be so served; or
        (E) to refinance indebtedness and purchase a manufactured-home 
    lot pursuant to section 3710(a)(9)(B)(ii) or 3712(a)(1)(G) of this 
    title, but only with respect to that portion of the loan used to 
    refinance such indebtedness.

    (4)(A) In guaranteeing or insuring loans under this chapter, the 
Secretary may elect whether to require that such loans bear interest at 
a rate that is--
        (i) agreed upon by the veteran and the mortgagee; or
        (ii) established under paragraph (1).

The Secretary may, from time to time, change the election under this 
subparagraph.
    (B) Any veteran, under a loan described in subparagraph (A)(i), may 
pay reasonable discount points in connection with the loan. Except in 
the case of a loan for the purpose specified in section 3710(a)(8), 
3710(b)(7), or 3712(a)(1)(F) of this title, discount points may not be 
financed as part of the principal amount of a loan guaranteed or insured 
under this chapter.
    (C) Not later than 10 days after an election under subparagraph (A), 
the Secretary shall transmit to the Committees on Veterans' Affairs of 
the Senate and House of Representatives a notification of the election, 
together with an explanation of the reasons therefor.
    (d)(1) The maturity of any housing loan shall not be more than 
thirty years and thirty-two days.
    (2)(A) Any loan for a term of more than five years shall be 
amortized in accordance with established procedure.
    (B) The Secretary may guarantee loans with provisions for various 
rates of amortization corresponding to anticipated variations in family 
income. With respect to any loan guaranteed under this subparagraph--
        (i) the initial principal amount of the loan may not exceed the 
    reasonable value of the property as of the time the loan is made; 
    and
        (ii) the principal amount of the loan thereafter (including the 
    amount of all interest to be deferred and added to principal) may 
    not at any time be scheduled to exceed the projected value of the 
    property.

    (C) For the purposes of subparagraph (B) of this paragraph, the 
projected value of the property shall be calculated by the Secretary by 
increasing the reasonable value of the property as of the time the loan 
is made at a rate not in excess of 2.5 percent per year, but in no event 
may the projected value of the property for the purposes of such 
subparagraph exceed 115 percent of such reasonable value. A loan made 
for a purpose other than the acquisition of a single-family dwelling 
unit may not be guaranteed under such subparagraph.
    (3) Any real estate housing loan (other than for repairs, 
alterations, or improvements) shall be secured by a first lien on the 
realty. In determining whether a loan for the purchase or construction 
of a home is so secured, the Secretary may disregard a superior lien 
created by a duly recorded covenant running with the realty in favor of 
a private entity to secure an obligation to such entity for the 
homeowner's share of the costs of the management, operation, or 
maintenance of property, services or programs within and for the benefit 
of the development or community in which the veteran's realty is 
located, if the Secretary determines that the interests of the veteran 
borrower and of the Government will not be prejudiced by the operation 
of such covenant. In respect to any such superior lien to be created 
after June 6, 1969, the Secretary's determination must have been made 
prior to the recordation of the covenant.
    (e)(1) Except as provided in paragraph (2) of this subsection, an 
individual who pays a fee under section 3729 of this title, or who is 
exempted under section 3729(c) of this title from paying such fee, with 
respect to a housing loan guaranteed or insured under this chapter that 
is closed after December 31, 1989, shall have no liability to the 
Secretary with respect to the loan for any loss resulting from any 
default of such individual except in the case of fraud, 
misrepresentation, or bad faith by such individual in obtaining the loan 
or in connection with the loan default.
    (2) The exemption from liability provided by paragraph (1) of this 
subsection shall not apply to--
        (A) an individual from whom a fee is collected (or who is 
    exempted from such fee) under section 3729(b) of this title; or
        (B) a loan made for any purpose specified in section 3712 of 
    this title.

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

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

                       References in Text

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


                               Amendments

    1998--Subsec. (e)(1). Pub. L. 105-368 substituted ``3729(c)'' for 
``3729(c)(1)''.
    1996--Subsec. (c)(4)(D). Pub. L. 104-110 struck out subpar. (D) 
which read as follows: ``This paragraph shall expire on December 31, 
1995.''
    1994--Subsec. (a)(1)(A)(i)(IV), (B). Pub. L. 103-353 substituted 
``$50,750'' for ``$46,000''.
    1993--Subsec. (c)(4)(B). Pub. L. 103-78 in second sentence 
substituted ``Except in the case of a loan for the purpose specified in 
section 3710(a)(8), 3710(b)(7), or 3712(a)(1)(F) of this title, 
discount'' for ``Discount''.
    1992--Subsec. (c)(1). Pub. L. 102-547, Sec. 10(a)(1), in first 
sentence substituted ``applicable to'' for ``the Secretary of Housing 
and Urban Development considers necessary to meet the mortgage market 
for'' and struck out ``, and, to the maximum extent practicable, carry 
out a coordinated policy on interest rates on loans insured under such 
section 203(b) and on loans guaranteed or insured under this chapter'' 
after ``(12 U.S.C. 1709(b))''.
    Subsec. (c)(4). Pub. L. 102-547, Sec. 10(a)(2), added par. (4).
    1991--Pub. L. 102-83, Sec. 5(a), renumbered section 1803 of this 
title as this section.
    Subsec. (a)(1)(A). Pub. L. 102-83, Sec. 5(c)(1), substituted 
``3710'' for ``1810'' in introductory provisions.
    Subsec. (a)(1)(A)(i)(III). Pub. L. 102-54, Sec. 6(1), inserted 
``except as provided in subclause (IV) of this clause,'' after ``(III)'' 
and struck out ``but not more than $144,000,'' after ``$56,250,''.
    Subsec. (a)(1)(A)(i)(IV). Pub. L. 102-83, Sec. 5(c)(1), substituted 
``3710(a)'' for ``1810(a)''.
    Pub. L. 102-54, Sec. 6(2), substituted ``(6), or (8)'' for ``or 
(6)''.
    Subsec. (a)(1)(B). Pub. L. 102-83, Sec. 5(c)(1), substituted 
``3710'' for ``1810'' and ``3702(b)'' for ``1802(b)''.
    Subsec. (c)(1). Pub. L. 102-83, Sec. 5(c)(1), substituted 
``3710(a)'' for ``1810(a)''.
    Subsec. (c)(3). Pub. L. 102-83, Sec. 5(c)(1), substituted 
``3710(a)'' for ``1810(a)'' and ``3712(a)(1)(F)'' for ``1812(a)(1)(F)'' 
in subpar. (A), ``3710(a)'' for ``1810(a)'' in subpar. (B), and 
``3710(a)(9)(B)(ii) or 3712(a)(1)(G)'' for ``1810(a)(9)(B)(ii) or 
1812(a)(1)(G)'' in subpar. (E).
    Subsec. (e)(1). Pub. L. 102-83, Sec. 5(c)(1), substituted ``3729'' 
for ``1829'' and ``3729(c)(1)'' for ``1829(c)(1)''.
    Subsec. (e)(2). Pub. L. 102-83, Sec. 5(c)(1), substituted 
``3729(b)'' for ``1829(b)'' in subpar. (A) and ``3712'' for ``1812'' in 
subpar. (B).
    Subsec. (f). Pub. L. 102-54, Sec. 4(b), added subsec. (f).
    1989--Subsec. (a)(1)(A)(i). Pub. L. 101-237, Sec. 306(a)(1), added 
subcls. (II) to (IV) and struck out former subcl. (II) which read as 
follows: ``in the case of any loan of more than $45,000, the lesser of 
$36,000 or 40 percent of the loan, except that the amount of such 
guaranty for any such loan shall not be less than $22,500; or''.
    Subsec. (a)(1)(B). Pub. L. 101-237, Sec. 306(a)(2), inserted ``, or 
in the case of a loan described in subparagraph (A)(i)(IV) of this 
paragraph, $46,000,'' after ``$36,000''.
    Subsec. (a)(2). Pub. L. 101-237, Sec. 313(b)(1), substituted 
``Secretary'' for ``Administrator'' wherever appearing.
    Subsec. (c)(1). Pub. L. 101-237, Sec. 313(b)(6), substituted 
``Secretary of Housing and Urban Development considers'' for ``Secretary 
considers''.
    Pub. L. 101-237, Sec. 313(b)(1), substituted ``Secretary'' for 
``Administrator'' wherever appearing.
    Subsec. (c)(2)(B), (3)(D). Pub. L. 101-237, Sec. 313(b)(1), 
substituted ``Secretary'' for ``Administrator''.
    Subsec. (d)(2)(B), (C), (3). Pub. L. 101-237, Sec. 313(b)(1), 
substituted ``Secretary'' and ``Secretary's'' for ``Administrator'' and 
``Administrator's'', respectively, wherever appearing.
    Subsec. (e). Pub. L. 101-237, Sec. 304(a), added subsec. (e).
    1988--Pub. L. 100-322, Sec. 415(a)(3)(B), inserted ``and insurance'' 
in section catchline.
    Subsec. (a)(1). Pub. L. 100-322, Sec. 415(d)(1), inserted ``as 
specified in subparagraph (B) of this paragraph'' before period at end 
of cl. (A)(ii) and substituted ``for purposes specified in section 1810 
of this title'' for ``under section 1810 of this chapter'' in cl. (B).
    Pub. L. 100-253 amended par. (1) generally. Prior to amendment, par. 
(1) read as follows: ``Any loan to a veteran eligible for benefits under 
this chapter, if made for any of the purposes specified in section 1810 
of this title and in compliance with the provisions of this chapter, is 
automatically guaranteed by the United States in an amount not to 
exceed--
        ``(A) in the case of any loan of not more than $45,000, 50 
    percent of the loan; or
        ``(B) in the case of any loan of more than $45,000, 40 percent 
    of the loan or $36,000, whichever is less, except that the amount of 
    such guaranty for any such loan shall not be less than $22,500;
reduced by the amount of entitlement previously used by the veteran 
under this chapter and not restored as a result of the exclusion in 
section 1802(b) of this title.''
    Subsec. (a)(2). Pub. L. 100-322, Sec. 415(a)(3)(A)(ii), (iii), 
(B)(ii), redesignated subsecs. (a) and (b) of section 1815 of this title 
as subpars. (A) and (B), respectively, of par. (2) of subsec. (a) of 
this section and struck out former par. (2) which read as follows: ``Any 
unused entitlement of World War II or Korean conflict veterans which 
expired under provisions of law in effect before October 23, 1970, is 
hereby restored and shall not expire until used.''
    Subsec. (c)(3)(A). Pub. L. 100-322, Sec. 415(c)(2)(A), substituted 
``1812(a)(1)(F)'' for ``1819(a)(1)(F)''.
    Subsec. (c)(3)(E). Pub. L. 100-322, Sec. 415(c)(2)(B), substituted 
``1812(a)(1)(G)'' for ``1819(a)(1)(G)''.
    1987--Subsec. (a)(1). Pub. L. 100-198 amended par. (1) generally. 
Prior to amendment, par. (1) read as follows: ``Any loan to a veteran 
eligible for benefits under this chapter, if made for any of the 
purposes, and in compliance with the provisions, specified in this 
chapter is automatically guaranteed by the United States in an amount 
not more than 60 percent of the loan if the loan is made for any of the 
purposes specified in section 1810 of this title.''
    1984--Subsec. (c)(3)(A). Pub. L. 98-223, Sec. 205(c)(1), substituted 
``, (8), or (9)(B)(i)'' for ``or (8)''.
    Subsec. (c)(3)(E). Pub. L. 98-223, Sec. 205(c)(2), inserted 
``1810(a)(9)(B)(ii) or'' after ``section''.
    1982--Subsec. (a)(1). Pub. L. 97-295, Sec. 4(61), substituted 
``percent'' for ``per centum''.
    Subsec. (a)(2). Pub. L. 97-295, Sec. 4(63)(A), substituted ``before 
October 23, 1970,'' for ``prior to the date of enactment of the 
Veterans' Housing Act of 1970''.
    Subsec. (c)(1). Pub. L. 97-295, Sec. 4(63)(B), inserted ``(12 U.S.C. 
1709(b))'' after ``the National Housing Act''.
    Subsec. (c)(3). Pub. L. 97-306, Sec. 406(b)(1), substituted ``used--
'' for ``used:''. Notwithstanding that Pub. L. 97-306 directed amendment 
be made in provisions preceding cl. (1), amendment was executed in 
provisions preceding cl. (A) as the probable intent of Congress in view 
of the absence of a cl. (1) in subsec. (c)(3).
    Subsec. (c)(3)(E). Pub. L. 97-306, Sec. 406(b)(2)-(4), added cl. 
(E).
    Subsec. (d)(3). Pub. L. 97-295, Sec. 4(63)(C), substituted ``June 6, 
1969'' for ``the effective date of this amendment''.
    1981--Subsec. (a)(2)(A) [formerly Sec. 1815(a)]. Pub. L. 97-72, 
Sec. 303(e), substituted ``Any housing loan'' for ``Any loan''. See 1988 
Amendment note above.
    Subsec. (d)(1). Pub. L. 97-72, Sec. 303(c)(1), substituted ``any 
housing loan'' for ``any loan''.
    Subsec. (d)(2). Pub. L. 97-66 designated existing provisions as 
subpar. (A) and added subpars. (B) and (C).
    Subsec. (d)(3). Pub. L. 97-72, Sec. 303(c)(2), substituted ``Any 
real estate housing loan'' for ``Any real estate loan''.
    1980--Subsec. (c)(3)(A). Pub. L. 96-385 substituted ``clause (5) or 
(8) of section 1810(a) of this title or section 1819(a)(1)(F) of this 
title'' for ``section 1810(a)(5)''.
    1978--Subsec. (a)(1). Pub. L. 95-476, Sec. 103(a), substituted 
provision extending loan guarantees under this section to veterans 
eligible for benefits under this chapter for provision limiting such 
guarantees to World War II or Korean conflict veterans.
    Subsec. (c)(1). Pub. L. 95-476, Sec. 103(b)(1), inserted provision 
authorizing the Administrator in establishing rates of interest under 
this paragraph for purposes of cls. (4) to (7) of section 1810(a) of 
this title to establish rates higher than the rate specified for other 
purposes under such section but not in excess of the rate the 
Administrator may find the loan market demands for loans for such 
purposes.
    Subsec. (c)(3)(B). Pub. L. 95-476, Sec. 103(b)(2), substituted 
``clauses (4) and (7) of section 1810(a) of this title'' for ``section 
1810(a)(4)''.
    1976--Subsec. (a)(2)(A) [formerly Sec. 1815(a)]. Pub. L. 94-324, 
Sec. 7(16), substituted ``the Administrator will'' for ``he will''. See 
1988 Amendment note above.
    Subsec. (d)(3). Pub. L. 94-324, Sec. 7(6), substituted ``the 
Administrator determines'' for ``he determines''.
    1974--Subsec. (a)(1). Pub. L. 93-569, Sec. 8(1), struck out ``and 
not more than 50 per centum of the loan if the loan is for any of the 
purposes specified in section 1812, 1813, or 1814 of this title'' after 
``section 1810 of this title''.
    Subsec. (a)(2)(B) [formerly Sec. 1815(b)]. Pub. L. 93-569, 
Sec. 8(5), struck out provision authorizing the Administrator to fix 
maximum interest rate payable on non-real-estate loans at not in excess 
of 3 percent discount rate or an equivalent straight interest rate on 
unamortized loans.
    Pub. L. 93-569, Sec. 8(2), struck out provision that, except as 
provided in sections 1810, 1811, and 1819, the aggregate amount 
guaranteed should not be more than $2,000 in the case of non-real-estate 
loans, nor $4,000 in the case of real-estate loans or a prorated portion 
thereof in a combination loan.
    Subsec. (c)(3). Pub. L. 93-569, Sec. 2(c), added par. (3).
    Subsec. (d)(1). Pub. L. 93-569, Sec. 8(3), substituted provision 
that the maturity of any loan shall not be more than thirty years and 
thirty-two days for provisions that non-real-estate loans shall not be 
more than ten years except as provided in section 1819, that the 
maturity of a real estate loan be not more than thirty years, and a loan 
on farm realty be not more than forty years.
    Subsec. (d)(3). Pub. L. 93-569, Sec. 8(4), struck out provision that 
any non-real-estate loan should be secured by personalty to the extent 
legal and practicable.
    1973--Subsec. (c)(1). Pub. L. 93-75 substituted provisions requiring 
the Administrator to consult with the Secretary of Housing and Urban 
Development regarding the establishment of the rate of interest the 
Secretary considers necessary to meet the mortgage market for home loans 
insured under section 203(b) of the National Housing Act, and to carry 
out a coordinated policy on interest rates on loans insured under such 
section 203(b) and on loans guaranteed or insured under this chapter, 
for former provision limiting rate of interest to rate in effect under 
section 203(b)(5) of the National Housing Act.
    1970--Subsec. (a). Pub. L. 91-506, Sec. 2(b), struck out loan 
eligibility expiration dates for World War II and Korean conflict 
veterans and inserted provision restoring expired entitlements of World 
War II and Korean conflict veterans and providing that such entitlements 
shall not expire until used.
    Subsec. (b). Pub. L. 91-506, Sec. 2(c)(1), substituted ``1810, 1811, 
and 1819'' for ``1810 and 1811''.
    Subsec. (d)(1). Pub. L. 91-506, Sec. 2(c)(2), limited maturity of 
non-real-estate loan to not more than ten years except as provided in 
section 1819 of this title.
    1969--Subsec. (d)(3). Pub. L. 91-22 authorized the Administrator, in 
determining whether a Government loan is secured by a first lien on 
realty, to disregard a superior lien created by a duly recorded covenant 
which secures a veteran homeowner's share of the costs of managing, 
operating or maintaining property, services or programs common to the 
community in which the veteran's home is located, provided the interests 
of the Government and the veteran borrower are not prejudiced.
    1967--Subsec. (a)(3)(A). Pub. L. 90-77 extended in cls. (i) and (ii) 
loan program for certain World War II veterans from July 25, 1967 to 
July 25, 1970.
    1966--Subsec. (c)(1). Pub. L. 89-358 struck out provision for 
approval of rate of interest by the Secretary of the Treasury and 
substituted provision for a rate not in excess of that in effect under 
section 203(b)(5) of the National Housing Act, section 1709(b)(5) of 
Title 12, for former limitation of 5\1/4\ per centum per annum.
    1961--Subsec. (a). Pub. L. 87-84 substituted ``to a World War II or 
Korean conflict veteran, if made within the applicable period prescribed 
in paragraph (3) of this subsection'' for ``made to a World War II 
veteran, if made before July 26, 1962 (or, in the case of a veteran 
described in section 1801(a)(1)(B) of this title, before the expiration 
of fifteen years after World War II is deemed to have ended with respect 
to him), or to a Korean conflict veteran, if made before February 1, 
1965,'' in par. (1), and ``is received by the Administrator before the 
date of the expiration of the veteran's entitlement, the loan'' for ``to 
a World War II veteran, whose entitlement would otherwise expire on July 
25, 1962, has been received by the Administrator before July 26, 1962, 
such loan'' in par. (2), and added par. (3).
    1960--Subsec. (a). Pub. L. 86-665 substituted ``1962'' for ``1960'' 
in three places, ``fifteen'' for ``thirteen'' years, and ``after such 
date'' for ``before July 26, 1961''.
    1959--Subsec. (c)(1). Pub. L. 86-73 struck out requirement that the 
interest rate on a Veterans' Administration guarantee for direct loan be 
at least one-half of one percent below the prevailing rate on FHA-
insured sales housing loans and increased the interest rate ceiling from 
4\3/4\ to 5\1/4\ percent.


                    Effective Date of 1998 Amendment

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


                    Effective Date of 1994 Amendment

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


                    Effective Date of 1989 Amendment

    Section 306(b) of Pub. L. 101-237 provided that: ``The amendments 
made by subsection (a) [amending this section] shall take effect on the 
date of the enactment of this Act [Dec. 18, 1989] and shall apply only 
with respect to loans closed after such date.''


                    Effective Date of 1988 Amendment

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


                    Effective Date of 1987 Amendment

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


                    Effective Date of 1981 Amendments

    Amendment by Pub. L. 97-72 effective at end of 180-day period 
beginning on Nov. 3, 1981, see section 305 of Pub. L. 97-72, set out as 
an Effective Date note under section 3741 of this title.
    Amendment by Pub. L. 97-66 effective Oct. 17, 1981, see section 
701(b)(1) of Pub. L. 97-66, set out as a note under section 1114 of this 
title.


                    Effective Date of 1980 Amendment

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


                    Effective Date of 1978 Amendment

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


                    Effective Date of 1976 Amendment

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


                    Effective Date of 1974 Amendment

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


                    Effective Date of 1967 Amendment

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


       Ratification of Actions During Period of Expired Authority

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


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

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


 Expiration of Loan Benefit Entitlement of Certain World War II Veterans

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

                  Section Referred to in Other Sections

    This section is referred to in sections 3710, 3712, 3732, 3736, 3762 
of this title.
