(i) The loan must be secured by the same manufactured home which must be owned and occupied by the veteran as the veteran's home; and

(ii) The amount of the loan may not exceed an amount equal to the sum of: (A) The purchase price of the lot, not to exceed the reasonable value thereof, as authorized by §36.4252;

(B) The amount determined by the Secretary to be appropriate to cover the cost of necessary preparation of the lot;

(C) The balance of the loan being refinanced; and

(D) Closing costs, as authorized by §36.4232 or § 36.4254, as appropriate, and a reasonable discount with respect to that portion of the loan used to refinance the existing purchase money lien.

(iii) Allowable discounts may be charged to the veteran on the portion of the loan used to refinance the existing purchase money lien provided:

(A) The loan application is submitted to the Secretary for prior approval;

(B) The amount of discount to be paid on the unit portion of the loan is disclosed to the Secretary and the veteran prior to the issuance of the certificate of commitment by the Secretary. The certificate of commitment shall specify the discount to be paid by the veteran on the unit portion of the loan, and this discount may not be increased once the commitment has been issued without the approval of the Secretary; and

(C) The discount on the unit portion of the loan has been determined by the Secretary to be reasonable in amount.

(6) All powers of the Secretary under paragraphs (c) (4) and (5) of this section, except the authority to revise the discount after the commitment is issued, are hereby delegated to those officials designated by §36.4221(b). The power of the Secretary to approve an increase in the discount on the unit portion of the loan after the commitment is issued is delegated to those officials designated by § 36.4220(a).

(d) The loan amount in an individual case shall not exceed the following:

(1) In the case of a loan to purchase a new manufactured home unit only, the loan amount shall not exceed the sum of the following:

(i) 120 percent of the figure prodao by the following computation: Subtract from the manufacturer's i voice cost the manufactuer's invol cost of any components (furnishin accessories, equipment) removed fr the unit by the dealer. To the remai der add the dealer's cost for any co ponents added by such dealer. The so obtained shall be the figure to multiplied by the specified percenta (ii) 100 percent of the actual amo of fees and charge permitted § 36.4232.

(2) In the case of a loan to purch a new manufactured home unit the cost of necessary site preparati where the veteran owns the lot. loan amount shall be limited to amount determined in paragraph (đ of this section plus such costs of essary site preparation as are appro by the Secretary.

(3) In the case of a loan to purch a new manufactured home unit the purchase of an undeveloped lot which to place such home plus the of necessary site preparation, the amount shall be limited to the amoj determined in paragraph (d)(1) of section plus the reasonable value of undeveloped lot as determined by Secretary plus such costs of necess site preparation as are approved by Secretary.

(4) In the case of a loan to purch a new manufactured home unit p the cost of a suitably developed lot which to place such home, the lo amount shall be limited to the amo determined in paragraph (d)(1) of section plus the reasonable value of developed lot as determined by Secretary.

(5) In the case of a loan to purcha a lot upon which will be placed a manfactured home owned by the veter the loan is limited to the reasonab value of a developed lot or the reaso able value plus such amount as is termined by the Secretary to be apprt priate to cover the cost of necessar site preparation for an undeveloped lot

(6) In the case of a used manufac tured home the maximum loan maj not exceed the reasonable value as es tablished by the Secretary, plus;

(i) Actual fees or charges for required recordation of documents;

(ii) The amount of any documentary stamp taxes levied on the transaction;

(iii) The amount of State and local taxes levied on the transaction; and

(iv) 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 5 years.

(7) In the case of an interest rate reduction refinancing loan (38 U.S.C. 3712(a)(1)(F)) the maximum loan may not exceed:

(i) The balance of the Department of Veterans Affairs loan being refinanced; (ii) Closing costs as authorized by $36.4232 or §36.4254, as appropriate; and (iii) Allowable discounts provided: (A) The loan application is submitted to the Secretary for prior approval;

(B) The amount of discount is disclosed to the Secretary and the veteran prior to the issuance of the certificate of commitment by the Secretary. Said certificate of commitment shall specify the discount to be paid by the veteran, and this discount may not be increased once the commitment has been issued without the approval of the Secretary; (C) The discount has been determined by the Secretary to be reasonable in amount; and

(D) All powers of the Secretary under this paragraph (d)(7) of this section, except the authority to revise the discount after the commitment is issued, are hereby delegated to those officials designated by §36.4221(b). The power of the Secretary to approve an increase in the discount after the commitment is issued is delegated to those officials designated by § 36.4220(a).

Authority: 38 U.S.C. 3712 (a)(4) and (g))

(8) In the case of a loan to refinance a purchase money lien on a manufactured home and to buy a lot (38 U.S.C. 3712(a)(1)(G)) on which the manufactured home is or will be placed:

(1) The loan must be secured by the same manufactured home which must be owned and occupied by the veteran as the veteran's home; and

(ii) The amount of the loan may not exceed an amount equal to the sum of: (A) The purchase price, not to exceed the reasonable value of the lot, as authorized by §36.4252,

(B) The amount determined by the Secretary to be appropriate to cover the cost of necessary preparation of the lot,

(C) The balance of the loan being refinanced, and

(D) Closing costs, as authorized by § 36.4232 or § 36.4254, as appropriate, and a reasonable discount with respect to that portion of the loan used to refinance the existing purchase money lien.

(iii) Allowable discounts may be charged to the veteran on the portion of the loan used to refinance the existing purchase money lien provided:

(A) The loan application is submitted to the Secretary for prior approval;

(B) The amount of discount to be paid on the unit portion of the loan is disclosed to the Secretary and the veteran prior to the issuance of the certificate of commitment by the Secretary. The certificate of commitment shall specify the discount to be paid by the veteran on the unit portion of the loan, and this discount may not be increased once the commitment has been issued without the approval of the Secretary;

(C) The discount on the unit portion of the loan has been determined by the Secretary to be reasonable in amount; and

(D) All powers of the Secretary under paragraph (d)(8) of this section, except the authority to revise the discount after the commitment is issued, are hereby delegated to those officials designated by § 36.4221(b). The power of the Secretary to approve an increase in the discount on the unit portion of the loan after the commitment is issued is delegated to those officials designated by § 36.4220(a).

(Authority: 38 U.S.C. 3712 (a)(1)(G), (a)(5) and (g))

EDITORIAL NOTE: At 58 FR 37858, July 14, 1993, the following paragraph (d) was redesignated from paragraph (b), effective August 13, 1993.

(d) A loan for any of the purposes described in paragraphs (a)(1) through (6) of this section may include an amount determined by the Secretary to be appropriate to cover the cost of necessary preparation of a lot already owned or

to be acquired by the veteran, including the costs of installing utility connections and sanitary facilities, of paving, and of constructing a suitable pad for the manufactured home.

(e) The maximum permissible loan terms shall not exceed;

(1) 20 years and 32 days in the case of a loan to purchase a single-wide manufactured home or a single-wide manufactured home and lot;

(2) 15 years and 32 days in the case of a loan to purchase a lot on which to place a manufactured home already owned by the veteran;

(3) 23 years and 32 days in the case of a loan to purchase a double-wide manufactured home, or 25 years and 32 days in the case of a loan to purchase a double-wide manufactured home and lot;

or

(4) In the case of a used manufactured home the maximum term set forth in paragraph (c)(1) or (3) of this section or the remaining physical life expectancy of the unit as established by the Secretary, whichever is less.

(Authority: 38 U.S.C. 3712(a)(1) and (2), (d)(1), (e)(4)(B))

(f) An itemized list of all items inIcluded in the manufactured home loan as enumerated in §36.4232 shall be provided to both the purchaser and the Secretary. At the time of loan origination an independent fee inspection shall be conducted to assure that all items included in the loan amount are accounted for and in place. A similar inspection will be conducted in the event of repossession immediately prior to repossession. The costs of the fee inspections may be included in the loan amount or the claim amount and charged to the borrower pursuant to the provisions of § 36.4232 (a) and (b).

(The information collection requirements contained in §36.4204(f) were approved by the Office of Management and Budget under OMB control number 2900-0516)

(g) The cost of the transaction which cannot be paid from the proceeds of the loan must be paid by the veteran in cash from the veteran's own resources. Except for interest rate reduction refinancing loans pursuant to paragraph (a)(7) of this section or loans to refinance a manufactured home and to buy

§ 36.4205 Computation of guaranty.

(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

or home loan purposes only. To deine the amount of additional entient available for manufactured purposes, the amount of entitlepreviously used for manufactured

purposes is subtracted from 0. Except for manufactured home to be obtained pursuant to 38 !, 3712(a)(1)(F) or (G), the sum reing is the amount of available ennent for use for manufactured purposes.

For the purpose of computing the ining guaranty benefit to which a an is entitled, manufactured and manufactured home lot loans inteed prior to October 1, 1978, be taken into consideration as if subsequent thereto, and the vet3 entitlement will be reduced by mount of the Secretary's guarissued in the particular loan action.

A guaranty is reduced or ined pro rata with any deduction or ase in the amount of the guaranindebtedness, but in no event will mount payable on a guaranty exthe amount of the original guaror the percentage of the indebtedcorresponding to that of the origiuaranty.

The amount of any guaranty for a factured home or manufactured ⚫ lot loan shall be charged against original or remainder of the borr's guaranty benefit available for ufactured home purposes. Com1 or partial liquidation, by payt or otherwise, of the veteran's anteed indebtedness does not inse the remainder of the guaranty fit, if any, otherwise available to veteran. When the maximum guar· available legally to a veteran for ufactured home purposes shall è been granted, no further guaranty manufactured home purposes shall vailable to the veteran.

(1) The amount of guaranty entiment, available and unused, of an elle unremarried surviving spouse ose eligibility does not result from or her own service) is determinable the same manner as in the case of - veteran, and any entitlement ach the decedent (who was his or her use) used shall be disregarded. A tificate as to the eligibility of such

surviving spouse, issued by the Secretary, shall be a condition precedent to the guaranty or insurance of any loan made to a surviving spouse in such capacity.

(Authority: 38 U.S.C. 3701(a)(2), 3712(c)(4))

(2) For the purpose of obtaining an interest rate reduction refinancing loan purusant to 38 U.S.C. 3712(a)(1)(F), an unmarried surviving spouse who was a co-obligor under an existing Department of Veterans Affairs guaranteed loan shall be considered to be eligible for the 38 U.S.C. 3712(a)(1)(F) benefit.

(Authority: 38 U.S.C. 3712(a)(4)(C))

(g) Any evidence of guaranty issued by the Secretary in respect to such loan shall be conclusive evidence of the eligibility of the loan for guaranty and of the amount of such guaranty, Provided, however, That the Secretary may establish against the original lender, defenses based on fraud or material misrepresentation and that the Secretary may by regulations in force at the date of such issuance establish partial defenses to the amount payable on the guaranty.

[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]

§ 36.4206 Underwriting standards, occupancy, and non-discrimination requirements.

(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.

(Authority: 38 U.S.C. 3712)

(b) Use of the standards in §36.4337 of this part for underwriting manufactured home loans will be waived only in extraordinary circumstances.

(Authority: 38 U.S.C. 3712)

(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.

(Authority: 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, color, religion, sex, handicap, familial status, or national origin;

(ii) The veteran recognizes that any restrictive covenant on the property relating to race, color, religion, sex, handicap, familial status, or national origin is illegal and void and any such covenant is specifically disclaimed; and

(iii) The veteran understands that civil action for preventive relief may be brought by the Attorney General of the United States in any appropriate U.S. district court against any person responsible for a violation of the applicable law.

[46 FR 43670, Aug. 31, 1981, as amended at 56 FR 9855, Mar. 8, 1991; 58 FR 37859, July 14, 1993]

§ 36.4207 Manufactured home stan ards.

To qualify for purchase with a gua anteed loan a manufactured hot

must:

(a) Meet the following dimension requirements.

(1) A single-wide unit must be a må imum of ten (10) feet wide and have p minimum floor area of four hund (400) square feet.

(2) A double-wide unit, when asse bled, must be a minimum of twenty feet wide and have a minimum f area of seven hundred (700) square fe

(b) Be so constructed as to be toge on its own chassis and undercarri and/or independent undercarriage:

(c) Contain living facilities for around occupancy by one family. cluding permanent provisions for he sleeping, cooking, and sanitation; an

(d) Comply with the specification -effect at the time the loan is made are prescribed by the Secretary.

(Authority: 38 U.S.C. 3712(h)(1))

[36 FR 1253, Jan. 27, 1971, as amended FR 13213, Mar. 25, 1975; 44 FR 22725, Apr 1979: 56 FR 9855, Mar. 8, 1991]

§ 36.4208 Manufactured home locat standards.

(a) Any rental site on which a ma factured home to be purchased wit guaranteed loan will be placed m qualify as an acceptable rental site follows:

(1) Be located within a manufactu home park or subdivision which is ceptable to the Department of V erans Affairs; or

(2) Be a site which is not within manufactured home park or subdi sion provided that (i) the site is dete mined by the Department of Vetera Affairs to be an acceptable rental sit or (ii) in the absence of a determin tion by the Department of Veterans A fairs in respect to such site the mani factured home purchaser and the deale certify to the Secretary as follows:

(A) Placement of the manufacture home on the site or lot is not a vicia tion of zoning laws or other local requirements applicable to manufacture homes;