US Code

Public Law 119-73 (01/23/2026)

38 U.S.C. § 3711

Direct loans to veterans

(a)
The Congress finds that housing credit for purposes specified in section 3710 or 3712 of this title is not and has not been generally available to veterans living in rural areas, or in small cities and towns not near large metropolitan areas. It is therefore the purpose of this section to provide housing credit for veterans living in such rural areas and such small cities and towns.
(b)
Whenever the Secretary finds that private capital is not generally available in any rural area or small city or town for the financing of loans guaranteed for purposes specified in section 3710 or 3712 of this title, the Secretary shall designate such rural area or small city or town as a “housing credit shortage area”. The Secretary shall, with respect to any such area, make, or enter into commitments to make, to any veteran eligible under this title, a loan for any or all of the purposes described in section 3710(a) or 3712 of this title (other than the refinancing of a loan under section 3710(a)(8) or 3712(a)(1)(F)).
(c)
No loan may be made under this section to a veteran unless the veteran shows to the satisfaction of the Secretary that—
(1)
the veteran is unable to obtain from a private lender in such housing credit shortage area, at an interest rate not in excess of the rate authorized for guaranteed home loans or manufactured home loans, as appropriate, a loan for such purpose for which the veteran is qualified under section 3710 or 3712 of this title, as appropriate; and
(2)
7 U.S.C. 192142 U.S.C. 1471 the veteran is unable to obtain a loan for such purpose from the Secretary of Agriculture under title III of the Consolidated Farm and Rural Development Act ( et seq.) or title V of the Housing Act of 1949 ( et seq.).
(d)
(1)
Loans made under this section shall bear interest at a rate determined by the Secretary, not to exceed the rate authorized for guaranteed home loans, or manufactured home loans, as appropriate, and shall be subject to such requirements or limitations prescribed for loans guaranteed under this title as may be applicable.
(2)
(A)
section 3712 of this titlesection 3710 of this title Except for any loan made under this chapter for the purposes described in , the original principal amount of any loan made under this section shall not exceed an amount which bears the same ratio to $33,000 as the amount of guaranty to which the veteran is entitled under at the time the loan is made bears to $36,000; and the guaranty entitlement of any veteran who heretofore or hereafter has been granted a loan under this section shall be charged with an amount which bears the same ratio to $36,000 as the amount of the loan bears to $33,000.
(B)
section 3712 of this titlesection 3710 of this title The original principal amount of any loan made under this section for the purposes described in shall not exceed the amount that bears the same ratio to $33,000 as the amount of guaranty to which the veteran is entitled under such section at the time the loan is made bears to $20,000. The amount of the guaranty entitlement for purposes specified in of any veteran who is granted a loan under this section, or who before , was granted a loan under this section, shall be charged with the amount that bears the same ratio to $20,000 as the amount of the loan bears to $33,000.
(3)
No veteran may obtain loans under this section aggregating more than $33,000.
(e)
section 3710(a) of this title Loans made under this section shall be repaid in monthly installments, except that in the case of any such loan made for any of the purposes described in paragraphs (2), (3), or (4) of , the Secretary may provide that such loan shall be repaid in quarterly, semiannual, or annual installments.
(f)
In connection with any loan under this section, the Secretary may make advances in cash to pay taxes and assessments on the real estate, to provide for repairs, alterations, and improvements, and to meet the incidental expenses of the transaction. The Secretary shall determine the expenses incident to origination of loans made under this section, which expenses, or a reasonable flat allowance in lieu thereof, shall be paid by the veteran in addition to the loan closing costs.
(g)
The Secretary may sell, and shall offer for sale, to any person or entity approved for such purpose by the Secretary, any loan made under this section at a price which the Secretary determines to be reasonable under the conditions prevailing in the mortgage market when the agreement to sell the loan is made; and shall guarantee any loan thus sold subject to the same conditions, terms, and limitations which would be applicable were the loan guaranteed for purposes specified in section 3710 or 3712 of this title, as appropriate.
(h)
section 3704 of this title The Secretary may exempt dwellings constructed through assistance provided by this section from the minimum land planning and subdivision requirements prescribed pursuant to subsection (a) of , and with respect to such dwellings may prescribe special minimum land planning and subdivision requirements which shall be in keeping with the general housing facilities in the locality but shall require that such dwellings meet minimum requirements of structural soundness and general acceptability.
(i)
The Secretary is authorized, without regard to the provisions of subsections (a), (b), and (c) of this section, to make or enter into a commitment to make a loan to any veteran to assist the veteran in acquiring a specially adapted housing unit authorized under chapter 21 of this title, if the veteran is determined to be eligible for the benefits of such chapter 21, and is eligible for loan guaranty benefits under this chapter.
(j)
(1)
If any builder or sponsor proposes to construct one or more dwellings in a housing credit shortage area, or in any area for a veteran who is determined to be eligible for assistance in acquiring a specially adapted housing unit under chapter 21 of this title, the Secretary may enter into commitment with such builder or sponsor, under which funds available for loans under this section will be reserved for a period not in excess of three months, or such longer period as the Secretary may authorize to meet the needs in any particular case, for the purpose of making loans to veterans to purchase such dwellings. Such commitment may not be assigned or transferred except with the written approval of the Secretary. The Secretary shall not enter into any such commitment unless such builder or sponsor pays a nonrefundable commitment fee to the Secretary in an amount determined by the Secretary, not to exceed 2 percent of the funds reserved for such builder or sponsor.
(2)
Whenever the Secretary finds that a dwelling with respect to which funds are being reserved under this subsection has been sold, or contracted to be sold, to a veteran eligible for a direct loan under this section, the Secretary shall enter into a commitment to make the veteran a loan for the purchase of such dwelling. With respect to any loan made to an eligible veteran under this subsection, the Secretary may make advances during the construction of the dwelling, up to a maximum in advances of (A) the cost of the land plus (B) 80 percent of the value of the construction in place.
(k)
Without regard to any other provision of this chapter, the Secretary may take or cause to be taken such action as in the Secretary’s judgment may be necessary or appropriate for or in connection with the custody, management, protection, and realization or sale of investments under this section, may determine the Secretary’s necessary expenses and expenditures, and the manner in which the same shall be incurred, allowed and paid, may make such rules, regulations, and orders as the Secretary may deem necessary or appropriate for carrying out the Secretary’s functions under this section and, except as otherwise expressly provided in this chapter, may employ, utilize, compensate, and, to the extent not inconsistent with the Secretary’s basic responsibilities under this chapter, delegate any of the Secretary’s functions under this section to such persons and such corporate or other agencies, including agencies of the United States, as the Secretary may designate.

Pub. L. 85–85772 Stat. 1208Pub. L. 86–665, § 274 Stat. 531Pub. L. 87–84, § 275 Stat. 201Pub. L. 88–40278 Stat. 380Pub. L. 89–358, § 5(e)80 Stat. 26Pub. L. 90–77, title IV, § 40481 Stat. 190Pub. L. 90–301, § 1(b)82 Stat. 113Pub. L. 91–22, § 383 Stat. 32Pub. L. 91–506, § 484 Stat. 1109Pub. L. 92–6685 Stat. 173Pub. L. 93–569, § 488 Stat. 1864Pub. L. 94–32490 Stat. 720Pub. L. 95–476, title I, § 105(b)92 Stat. 1499Pub. L. 96–385, title IV94 Stat. 1533Pub. L. 97–295, § 4(65)96 Stat. 1309Pub. L. 97–306, title IV, § 406(c)(1)96 Stat. 1445Pub. L. 100–198, § 3(c)101 Stat. 1316Pub. L. 100–322, title IV, § 415(c)(5)102 Stat. 551Pub. L. 101–237, title III, § 313(b)(1)103 Stat. 2077Pub. L. 102–83, § 5(a)105 Stat. 406Pub. L. 105–368, title VI, § 602(e)(1)(B)112 Stat. 3346(, , , § 1811; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , §§ 3, 7(12)–(15), , , 721; , , ; , §§ 401(c)(2), 402(b), , ; , , ; , , ; , , ; , (d)(2) , , 552; , , ; renumbered § 3711 and amended , (c)(1), , ; , , .)

Editorial Notes

References in Text

7 U.S.C. 1921Pub. L. 87–12875 Stat. 307section 1921 of Title 7Title III of the Consolidated Farm and Rural Development Act ( et seq.), referred to in subsec. (c)(2), probably means title III of , , , known as the Consolidated Farm and Rural Development Act, which is classified principally to chapter 50 (§ 1921 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

act July 15, 1949, ch. 33863 Stat. 413section 1441 of Title 42The Housing Act of 1949, referred to in subsec. (c)(2), is , . Title V of the Housing Act of 1949 is classified generally to subchapter III (§ 1471 et seq.) of chapter 8A of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Amendments

Pub. L. 105–368section 3723 of this title1998—Subsec. (k). struck out “and ” after “functions under this section” in two places.

Pub. L. 102–83, § 5(a)section 1811 of this title1991—, renumbered as this section.

Pub. L. 102–83, § 5(c)(1)Subsec. (a). , substituted “3710 or 3712” for “1810 or 1812”.

Pub. L. 102–83, § 5(c)(1)Subsec. (b). , substituted “3710 or 3712” for “1810 or 1812”, “3710(a) or 3712” for “1810(a) or 1812”, and “3710(a)(8) or 3712(a)(1)(F))” for “1810(a)(8) or 1812(a)(1)(F))”.

Pub. L. 102–83, § 5(c)(1)Subsec. (c)(1). , substituted “3710 or 3712” for “1810 or 1812”.

Pub. L. 102–83, § 5(c)(1)Subsec. (d)(2). , substituted “3712” for “1812” and “3710” for “1810” in subpars. (A) and (B).

Pub. L. 102–83, § 5(c)(1)Subsec. (e). , substituted “3710(a)” for “1810(a)”.

Pub. L. 102–83, § 5(c)(1)Subsec. (g). , substituted “3710 or 3712” for “1810 or 1812”.

Pub. L. 102–83, § 5(c)(1)Subsec. (h). , substituted “3704” for “1804”.

Pub. L. 102–83, § 5(c)(1)Subsec. (k). , substituted “3723” for “1823” in two places.

Pub. L. 101–2371989—Subsecs. (b) to (d)(1), (e) to (k). substituted “Secretary” and “Secretary’s” for “Administrator” and “Administrator’s”, respectively, wherever appearing.

Pub. L. 100–322, § 415(c)(5)(A)1988—Subsec. (a). , (d)(2)(A), substituted “for purposes specified in section 1810 or 1812” for “under section 1810 or 1819”.

Pub. L. 100–322, § 415(c)(5)Subsec. (b). , (d)(2)(A), substituted “for purposes specified in section 1810 or 1812” for “under section 1810 or 1819”, “section 1810(a) or 1812” for “section 1810(a) or 1819”, and “section 1812(a)(1)(F)” for “section 1819(a)(1)(F)”.

Pub. L. 100–322, § 415(c)(5)(A)Subsecs. (c)(1), (d)(2)(A). , substituted “1812” for “1819”.

Pub. L. 100–322, § 415(c)(5)(A)Subsec. (d)(2)(B). , (d)(2)(B), substituted “1812” for “1819” and “for purposes specified in section 1810” for “under section 1810(c)”.

Pub. L. 100–322, § 415(c)(5)(A)Subsec. (g). , (d)(2)(A), substituted “for purposes specified in section 1810 or 1812” for “under section 1810 or 1819”.

Pub. L. 100–1981987—Subsec. (d)(2)(A). substituted “$36,000” for “$27,500” in two places.

Pub. L. 97–306, § 406(c)(1)1982—Subsec. (c)(1). , substituted “manufactured home” for “mobile home”.

Pub. L. 97–295, § 4(65)(A)7 U.S.C. 192142 U.S.C. 1471Subsec. (c)(2). , substituted “title III of the Consolidated Farm and Rural Development Act ( et seq.) or title V of the Housing Act of 1949 ( et seq.)” for “sections 1000–1029 of title 7 or under sections 1471–1483 of title 42”.

Pub. L. 97–306, § 406(c)(1)Subsec. (d)(1). , substituted “manufactured home” for “mobile home”.

Pub. L. 97–295, § 4(65)(B)Subsec. (d)(2)(B). , substituted “,” for “the date of the enactment of the Veterans’ Housing Benefits Act of 1978”.

Pub. L. 97–295, § 4(65)(C)Subsec. (j). , substituted “percent” for “per centum” wherever appearing.

Pub. L. 96–385, § 401(c)(2)1980—Subsec. (b). , inserted “(other than the refinancing of a loan under section 1810(a)(8) or 1819(a)(1)(F))” after “section 1810(a) or 1819 of this title”.

Pub. L. 96–385, § 402(b)Subsec. (d)(2). , substituted in two places “$27,500” for “$25,000” in subpar. (A) and “$20,000” for “$17,500” in two places in subpar. (B).

Pub. L. 95–476, § 105(b)(1)1978—Subsec. (d)(2)(A). , substituted “$25,000” for “$17,500” in two places.

Pub. L. 95–476, § 105(b)(2)section 1819 of this titlesection 1819(d) of this titlesection 1810(c) of this titleSubsec. (d)(2)(B). , substituted formula for determining maximum amount of original principal of any loan made under this section for purposes of for provision that such original amount was not to exceed amount specified by Administrator pursuant to and inserted provision relating to amount of guaranty entitlement under .

Pub. L. 94–324, § 7(12)1976—Subsec. (b). , substituted “the Administrator shall” for “he shall” and “The Administrator” for “He”.

Pub. L. 94–324, § 7(13)Subsec. (c). , substituted “the veteran” for “he” wherever appearing.

Pub. L. 94–324, § 3(1)Subsec. (d)(2)(A). , substituted “$33,000” for “$21,000” wherever appearing and struck out provision authorizing Administrator to increase limitations specified upon finding that cost levels so required.

Pub. L. 94–324, § 3(2)Subsec. (d)(3). , increased aggregate amount of loans that a veteran is eligible to receive under this section from $21,000 to $33,000 and struck out provision authorizing Administrator to increase specific limitations upon such loans.

Pub. L. 94–324, § 7(14)Subsec. (g). , substituted “the Administrator” for “him” and “he” wherever appearing.

Pub. L. 94–324, § 7(15)Subsec. (k). , substituted “the Administrator’s” for “his” wherever appearing and “as the Administrator” for “as he” wherever appearing.

Pub. L. 93–5691974—Subsec. (d)(2)(A). substituted “$17,500” for “$12,500” wherever appearing.

Pub. L. 92–661971—Subsec. (g). substituted provisions authorizing Administrator to sell loans at a price which he determines to be reasonable under prevailing conditions in the mortgage market when agreement to sell loan is made, for provisions authorizing Administrator to sell loans at a price which he determines to be reasonable but not less than 98 per centum of unpaid principal balance, plus full amount of accrued interest, and if loans are offered to an investor in a package or block of two or more loans at not less than 98 per centum of aggregate unpaid principal balance of loans included in such package or block, plus full amount of accrued interest.

Pub. L. 91–506, § 4(1)1970—Subsec. (a). , substituted “1810 or 1819” for “1810”.

Pub. L. 91–506, § 4(1)Subsec. (b). , (2), substituted “1810 or 1819” for “1810” and provided that the Administrator make, or enter into commitments to make, to any eligible veteran, a loan for any of the purposes described in section 1819 dealing with loans to purchase mobile homes and lots as well as section 1810(a) dealing with the purchase or construction of homes.

Pub. L. 91–506, § 4(3)Subsecs. (c)(1), (d)(1). , (4), inserted reference to mobile home loans.

Pub. L. 91–506, § 4(5)section 1819 of this titleSubsec. (d)(2)(A). , redesignated subsec. (d)(2) as subsec. (d)(2)(A) and substituted “Except for any loan made under this chapter for the purposes described in , the” for “The”.

Pub. L. 91–506, § 4(6)section 1819 of this titleSubsec. (d)(2)(B). , inserted provision limiting the original principal amount of any loan made under this section for the purchase of mobile homes and mobile home lots under to the amount specified by the Administrator pursuant to subsec. (d) of section 1819.

Pub. L. 91–506, § 4(7)Subsec. (g). , substituted “1810 or 1819 of this title, as appropriate” for “1810 of this title”.

Pub. L. 91–506, § 4(8)Subsec. (h). , substituted provisions permitting Administrator to exempt dwellings constructed through assistance provided by this section from the minimum land planning and subdivision requirements of this title so long as such dwellings meet minimum requirements of structural soundness and general acceptability for provisions establishing a direct loan expiration date by reference to those for guaranteed loans.

Pub. L. 91–506, § 4(8)Subsec. (i). , substituted provisions authorizing, Administrator to make or enter into a commitment to make, loans to assist disabled veterans in acquiring specially adapted housing if they are eligible for provisions authorizing Administrator to reserve funds available for loans to enable veterans to purchase dwellings in a housing credit shortage area provided the builder pays a nonrefundable commitment fee, not to exceed 2 percent of the funds reserved, authorizing the Administrator to make advances during construction of the dwelling, authorizing the Administrator to permit a private lender to purchase such loan, and permitting the Administrator to exempt dwellings constructed through assistance provided by this subsec. from the minimum land planning and subdivision requirements of this title so long as such dwellings meet minimum requirements of structural soundness and general acceptability.

Pub. L. 91–506, § 4(8)Subsec. (j). , substituted provisions authorizing Administrator to reserve funds available for loans to enable veterans to purchase housing in a housing credit shortage area, or in any area for a disabled veteran eligible for specially adapted housing, provided the builder pays a nonrefundable commitment fee, not to exceed 2 percent of the funds reserved and authorizing the Administrator to make advances during construction of the dwelling for provisions authorizing the Administrator to process loan applications notwithstanding the assistance of the Voluntary Home Mortgage Credit Committee in trying to place such loans with private lenders, authorizing the Administrator to complete the processing of such loan applications unless he is notified by such Committee that it was able to place any such loan with a private lender, and defining “working days”.

Pub. L. 91–221969—Subsec. (d)(2), (3). substituted “$21,000” for “$17,500” wherever appearing.

Pub. L. 90–3011968—Subsec. (d)(2). substituted “$12,500” for “$7,500” in two places.

Pub. L. 90–77, § 404(a)1967—Subsec. (d)(2). , authorized an increase in amount of direct loan limits from $17,500 to $25,000 where Administrator finds cost levels so require.

Pub. L. 90–77, § 404(b)Subsec. (d)(3). , authorized an increase in aggregate amount of direct loans to $25,000 where Administrator finds cost levels so require.

Pub. L. 89–3581966—Subsec. (d)(2), (3), substituted “$17,500” for “$15,000” wherever appearing.

Pub. L. 88–4021964—Subsec. (g). substituted provisions authorizing Administrator to sell loans at a price which he determines to be reasonable but not less than 98 per centum of unpaid principal balance, plus full amount of accrued interest, and if loans are offered to an investor in a package or block of two or more loans at not less than 98 per centum of aggregate unpaid principal balance of loans included in such package or block, plus full amount of accrued interest, for provisions which permitted Administrator to sell loans only at a price not less than par.

Pub. L. 87–84, § 2(a)1961—Subsec. (d)(2), (3). , substituted “$15,000” for “$13,500” wherever appearing.

Pub. L. 87–84, § 2(b)section 1803(a)(3) of this titleSubsec. (h). , substituted “to any veteran after the expiration of his entitlement pursuant to except pursuant to a commitment issued by the Administrator before such entitlement expires” for “after , except pursuant to commitments issued by the Administrator before that date.”

Pub. L. 86–6651960—Subsec. (h). substituted “1962” for “1960”.

Statutory Notes and Related Subsidiaries

Effective Date of 1998 Amendment

Pub. L. 105–368section 602(f) of Pub. L. 105–368section 2106 of this titleAmendment by effective , see , set out as a note under .

Effective Date of 1987 Amendment

section 3(c) of Pub. L. 100–198section 3(d) of Pub. L. 100–198section 3703 of this titleAmendment by applicable to loans closed on or after , but not applicable to any loan for which a guaranty commitment is made on or before , see , set out as a note under .

Effective Date of 1980 Amendment

Pub. L. 96–385Pub. L. 96–385section 1114 of this titleAmendment by sections 401(c)(2) and 402(b) of effective , and , respectively, see section 601(b), (d) of , set out as a note under .

Effective Date of 1978 Amendment

Pub. L. 95–476section 108(a) of Pub. L. 95–476section 3702 of this titleAmendment by effective , see , set out as a note under .

Effective Date of 1976 Amendment

Pub. L. 94–324Pub. L. 94–324section 3701 of this titleAmendment by sections 3 and 7(12)–(15) of effective , and , respectively, see section 9(a), (b) of , set out as a note under .

Effective Date of 1974 Amendment

Pub. L. 93–569section 10 of Pub. L. 93–569section 3702 of this titleAmendment by effective , see , set out as a note under .

Effective Date of 1967 Amendment

Pub. L. 90–77section 405 of Pub. L. 90–77section 101 of this titleAmendment by effective first day of first calendar month which begins more than ten days after , see , set out as a note under .