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

(Authority: 38 U.S.C. 3712 (a)(1)(b), (a)(4)(A) and (g)).

(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.

(Authority: 38 U.S.C. 3712; 42 U.S.C. 4001 note, 4012a)

(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.

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

(c)(1) Costs of a credit report (except for 38 U.S.C. 3712(a)(1)(F) or (G) refinancing loans) such additional insur ance as the veteran may desire, and any other expenses normally charge to a manufactured home purchase under local customs may be paid by the borrower other than from the loan pro ceeds.

(2) For the purchase of a used manu factured home unit, the fee of a De partment of Veterans Affairs appraise and of compliance inspectors des. ignated by the Department of Veteran Affairs, except appraisal fees incurre for the predetermination of reasonabl value requested by others than veterai or lender, may be paid by the borrowe from other than the loan proceeds. (Authority: 38 U.S.C. 3712 (e)(4) and (g))

(d) Subject to the limitations se forth in this section, the following ma be included in the loan made for th purchase of a new (not used) manufac tured home unit and paid out of th proceeds of the loan:

(1) The actual cost of transportation or freight;

(2) Setup charges for installing th manufactured home on site not to ex ceed $400 for a single-wide manufac tured home or $800 for a double-wid manufactured home.

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

If the actual costs exceed the limita tions in this section, the veteran must certify that any excess cost has beer paid in cash from the veteran's own re sources without borrowing.

(e)(1) Subject to the limitations set out in paragraph (e)(5) of this section a fee must be paid to the Secretary. A fee of 1 percent of the total amount must be paid in a manner prescribed by the Secretary before a manufactured home unit loan will be eligible for guaranty. Provided, however, that the fee shall be 0.50 percent of the total. loan amount for interest rate reduction refinancing loans guaranteed under 38 U.S.C. 3712(a)(1)(F). All or part of the fee may be paid in cash at loan closing or all or part of the fee may be included in the loan without regard to the reasonable value of the property or the computed maximum loan amount,

ppropriate. In computing the fee, ender shall disregard any amount ded in the loan to enable the borr to pay such fee.

ority: 38 U.S.C. 3729(a))

Subject to the limitations set out ragraph (e)(5) of this section, a fee e-half of one percent of the loan ice must be paid to the Secretary manner prescribed by the Secy by a person assuming a loan to h section 3714 of chapter 37 of 38 > applies. The instrument securuch a loan shall contain a providescribing the right of the holder llect this fee as trustee for the Denent of Veterans Affairs. The loan er shall list the amount of this fee very assumption statement proi and include a notice that the fee be paid to the holder immeely following loan settlement. The must be transmitted to the Secry within 15 days of receipt by the er of notice of the transfer.

aority: 38 U.S.C. 3714, 3729)

The lender is required to pay to Secretary the fee described in parah (e)(1) of this section within 15 1 after loan closing. Any lender ing a loan, subject to the limitas set out in paragraph (e)(5) of this ion, who fails to submit timely ment of this fee will be subject to a charge equal to 4 percent of the d fee due. If payment of the 1 pert fee is more than 30 days after loan ing, interest will be assessed at a } set in conformity with the Departit of Treasury's Fiscal Requireits Manual. This interest charge is addition to the 4 percent late rge, but the late charge is not inded in the amount on which interest computed. This interest charge is to calculated on a daily basis beging on the date of closing, although interest will be assessed only on iding fee payments received more in 30 days after closing.

ithority: 38 U.S.C. 501)

4) The lender is required to pay to e Secretary electronically through e Automated Clearing House (ACH) stem the fees described in paragraphs

(e)(1) and (e)(2) of this section and any late fees and interest due on them. This shall be paid to a collection agent by operator-assisted telephone, terminal entry, or central processing unit-to-central processing unit (CPUto-CPU) transmission. The collection agent will be identified by the Secretary. The lender shall provide the collection agent with the following: authorization for payment of the funding fee (including late fees and interest) along with the following information: VA lender ID number; four-digit personal identification number; dollar amount of debit; VA loan number; OJ (office of jurisdiction) code; closing date; loan amount; information about whether the payment includes a shortage, late charge, or interest; veteran name; loan type; sale amount; downpayment; whether the veteran is a reservist; and whether this is a subsequent use of entitlement. For all transactions received prior to 8:15 p.m. on a workday, VA will be credited with the amount paid to the collection agent at the opening of business the next banking day.

(Authority: 38 U.S.C. 3729(a))

(5) The fee described in paragraphs (e)(1) and (e)(2) of this section shall not be collected from a veteran who is receiving compensation (or who but for the receipt of retirement pay would be entitled to receive compensation) or from a surviving spouse described in section 3701(b)(2) of title 38, United States Code.

(Authority: 38 U.S.C. 3729(b))

(The information collection requirements in this section have been approved by the Office of Management and Budget under control numbers 2900-0474 and 2900-0516)

[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]

§ 36.4234 Title and lien requirements.

(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.

[36 FR 1253, Jan. 27, 1971, as amended at 46 FR 43671, Aug. 31, 1981; 58 FR 37860, July 14, 1993]

COMBINATION AND MANUFACTURED HOME LOT LOANS

§ 36.4251 Loans to finance the purchase of manufactured homes and the cost of necessary site preparation.

(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 ag will not be paid from the proceeds of the loan must be paid by the veteran in cash from the veteran's own resources.

[36 FR 3368, Feb. 23, 1971, as amended at 40 FR 13215, Mar. 25, 1975; 48 FR 40230, Sept. 6, 1983]

(1) The veteran will acquire title to such lot that conforms to the require-e ments 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

an must be paid by the veteran in rom the veteran's own resources. For the purpose of this section acion of a manufactured home lot

es:

The refinancing of the balance by the veteran as purchaser under sting real estate installment conand

The refinancing of existing mortoans or other liens which are seof record on a manufactured lot owned by the veteran.

A loan to acquire a lot on which e a manufactured home may infunds to refinance an existing nade for the purchase of and seby a manufactured home on lot the manufactured home is loor will be placed, provided that: The veteran will acquire or retain to such manufactured home and at conforms to the requirements 3.4234 and 36.4253,

The loan is secured as required by 53(g),

The lot is determined by the Secto be an acceptable manufachomesite pursuant to §36.4208, The portion of the loan allocated e acquisition and preparation of t does not exceed the reasonable of the developed lot as deter1 by the Secretary,

The cost of necessary site preparas determined by the Secretary to sonable.

The portion of the loan allocated e refinancing of the manufactured does not exceed an amount equal e sum of the balance of the loan refinanced; a reasonable discount thorized in §36.4204(d)(8) with reto that portion of the loan used efinance the existing purchase y lien on the manufactured loan, closing costs as authorized in 232 or § 36.4254, as appropriate,

The loan conforms otherwise to equirements of the §36.4200 series, The veteran-borrower's obligation cquisition of the lot and for refiing the existing loan on the manuared home (including site prepara. where appropriate), shall conite one loan for the purposes of the

§ 36.4200 series, including computation of the Secretary's guaranty liability. (Authority: 38 U.S.C. 3712(a)(1)(G) or (5))

[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]

§ 36.4253 Title and lien requirements.

(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 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) Reservations for water, timber, or subsurface rights;

(5) Right in any grantor or cotenant in the chain of title, or a successor of either, to purchase for cash, which right by the terms thereof is exercisable only if:

(i) An owner elects to sell,

(ii) The option price is not less than the price at which the then owner is willing to sell to another, and

(iii) Exercised within 30 days after notice is mailed by certified mail to the address of optionee last known to the then owner of the then owner's election to sell, stating the price and the identity of the proposed vendee;

(6) State and local housing agency deed restrictions provided that the veteran obtained the property under a State or local political subdivision program designed to assist low- or moderate-income purchasers, and as a condition the purchaser must agree to one or more of the following restrictions:

(i) If the property is resold within a time period as established by local law or ordinance, after the purchaser acquires title, the purchaser must first offer the property to the government housing agency, or a low- or moderateincome purchaser designated by such agency, provided the option to purchase is exercised within 90 days after notice by the purchaser to the agency of intention to sell;

(ii) If the property is resold within a time period as established by local law or ordinance, after the purchaser acquires title, a governmental agency may specify a maximum price for the property upon resale; or

(iii) Such other restriction approved by the Secretary designed to insure either that a property acquired under such program again be made available to low- or moderate-income purchasers, or to prevent a private purchaser from obtaining a windfall profit on the resale of such property, while assuring that the purchaser has a reasonable opportunity to dispose of the property

without undue difficulty at a reasonable price.

The sale price of a property under any of the restrictions of paragraph (b)(6) of this section shall not be less than the lowest of the following: The price designated by the owner as the asking price; the appraised value of the prop erty; or the original purchase price o the property, increased by a factor re flecting all or a reasonable portion o the increased costs of housing or the percentage increase in median income in the area between the date of origina purchase and resale, plus the reason able value or actual costs of any cap ital improvements made by the owner plus a reasonable real estate commis sion less the cost of necessary repair required to place the property in sale able condition; or other reasonable for mula approved by the Secretary. Th veteran must be fully informed an consent in writing to the deed restric tions. A copy of the veteran's consen statement must be forwarded with th application for manufactured hom loan guaranty or the report of a manu factured home loan processed on th automatic basis;

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

(7) A recorded restriction on title de signed to provide housing for older per sons, provided that the restriction i acceptable under the provisions of the Fair Housing Act, title VIII of the Civi Rights Act of 1968, as amended by th Fair Housing Amendments Act of 1988 42 U.S.C. 3601 et seq. The veteran mus be fully informed and consent in writ ing to the restrictions. A copy of the veteran's consent statement must be forwarded with the application fo manufactured home loan guaranty o the report of a manufactured home loan processed on the automatic basis

(Authority: 38 U.S.C. 501, 3703(c)(1), 3712(g))

(8) Building and use restrictions whether or not enforceable by a re verter clause if there has been no breach of the conditions affording & right to an exercise of the reverter;

(9) Violation of a restriction based or race, color, religion, sex, handicap, familial status, or national origin