VA Compensation

Public Law 97-306 authorized refinancing loans on manufactured homes in order that veterans could purchase the lot on which the manufactured home is or would be placed.

The Housing and Urban-Rural Recovery Act of 1983, Public Law 98-181, included a requirement that the Secretary of Agriculture, the Secretary of Housing and Urban Development and the VA Administrator each accept an administrative approval of any housing subdivision made by any of the others, so that not later than January 1, 1984, there would be total reciprocity for housing subdivision approvals.

In 1984, Public Law 98-223 expanded section 3702(b)(2) (formerly 1802) concerning restoration of a veteran's home loan entitlement upon substitution of another veteran's entitlement.  This act eliminated the previous requirement that the substituting veteran be the "immediate-transferee" of the property.  The act also allowed the Administrator to guarantee a loan for a manufactured home permanently affixed to a lot and considered real estate in the area it is located, on the same basis as a loan for a conventionally built home under 38 U.S.C. 3710 (formerly 1810).

Public Law 98-369 increased the loan funding fee from one half of one percent to one percent, required collection of the fee on VA-acquired property sales financed by the VA, and provided for deposit of the fees collected directly into the loan guaranty revolving fund.  The act also specified that not more than 75% nor less than 60% of VA-acquired property sales would be sold with VA providing the financing.  With respect to defaulted loans, the act prescribed that the holder of the loan would have the option to convey the property to the VA only if the "net value" of the property to VA exceeds the total indebtedness less the amount of the guaranty, or if a larger bid was made as the minimum amount permitted under state law. "Net value" was defined as the fair market value less VA's estimates of the costs of acquiring and disposing of the property, including taxes, maintenance and resale expenses.  Public Law 98-543 increased the specially adapted housing grant for severely disabled veterans to $35,500 and increased the housing grant to $6,000 for veterans with the service-connected disabilities of blindness in both eyes or the anatomical loss or loss of use of both hands.

In 1986, Public Law 99-576 authorized special housing adaptation grants for homes already adapted with the necessary special features.  This law also requires the Administrator to adopt VA credit underwriting standards in regulatory form.  Lenders would be required to certify that loans conformed to the standards.  A new section 1831 (since renumbered 3731) was added to Title 38, U.S. Code to require adoption of qualification standards for appraisers and a list of approved appraisers.  Lenders and veterans are given the right to obtain a second appraisal if either disagrees with the first estimate of value.  In these cases, VA must consider both appraisals in determining the reasonable value of the property.

Public Law 100-198 was signed into law on December 21, 1987.  Section 2 extended the one-percent funding fee for guaranteed and vendee loans until September 30, 1989, and assured that all surviving spouses of veterans who died from service-connected disabilities would be exempt from payment of the funding fee, by exempting those who had eligibility in their own right based on active duty service.

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