[Code of Federal Regulations]
[Title 38, Volume 2]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 38CFR36.4204]

[Page 546-550]
 
            TITLE 38--PENSIONS, BONUSES, AND VETERANS' RELIEF
 
          CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS (CONTINUED)
 
PART 36--LOAN GUARANTY--Table of Contents
 
Sec. 36.4204  Loan purposes, maximum loan amounts and terms.

    (a) A manufactured home loan may be guaranteed if the loan is for 
one of the following purposes;
    (1) To purchase a lot on which to place a manufactured home already 
owned by the veteran;
    (2) To purchase a single-wide manufactured home;
    (3) To purchase a single-wide manufactured home and a lot on which 
to place such home;
    (4) To purchase a double-wide manufactured home;
    (5) To purchase a double-wide manufactured home and lot on which to 
place such home;
    (6) To refinance an existing loan, including a previously refinanced 
purchase money loan, that was made for the purchase of and is secured by 
a manufactured home and to purchase a lot on which the manufactured home 
is or will be placed; or
    (7) To refinance in accordance with Sec. 36.4223 an existing 
manufactured home loan guaranteed, insured or made under paragraphs 
(a)(1) through (6) of this section provided the amount of the loan to 
refinance does not exceed an amount equal to 95 percent of the 
reasonable value of the manufactured home securing the loan, as 
determined by the Secretary.


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

    (b) In the case of a loan to purchase a new manufactured home unit 
only, the loan amount shall not exceed the lesser of an amount equal to 
95 percent of the purchase price of the property securing the loan or 
the amount computed in paragraph (c), of this section, provided the 
total loan amount does not exceed 145 percent of the manufacturer's 
invoice.
    (c) For all manufactured home loans, the maximum loan amount is as 
follows:

[[Page 547]]

    (1) In the case of a loan to purchase a new manufactured home unit 
only, the loan amount is to be computed as the sum of:
    (i) One hundred twenty-five (125) percent of the figure produced by 
this computation:
    Subtract from the manufacturer's invoice cost the manufacturer's 
invoice cost of any components (furnishings, accessories, equipment) 
removed from the unit by the dealer. To the remainder add the dealer's 
cost for any components added by such dealer. The sum so obtained shall 
be the figure to be multiplied by the specified percentage; and
    (ii) One hundred (100) percent of the actual amount of fees and 
charges permitted in Sec. 36.4232.
    (2) A loan to purchase a lot upon which a manufactured home owned by 
the veteran will be placed is limited to the reasonable value of a 
developed lot or the reasonable value plus such amount determined by the 
Secretary to be appropriate to cover the cost of necessary site 
preparation for an undeveloped lot.
    (3) The maximum loan amount for a used manufactured home may not 
exceed the reasonable value as established 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 
transactions;
    (iii) The amount of State and local taxes levied on the 
transactions; and
    (iv) The premium for customary physical damage insurance and 
vendor's single interest coverage on the manufactured home for an 
initial policy term not to exceed one year.
    (4) In the case of an interest rate reduction refinancing loan (38 
U.S.C. 3712(a)(1)(F)) the maximum loan may not exceed the sum of:
    (i) The balance of the VA loan being refinanced;
    (ii) Closing costs as authorized by Sec. 36.4232 or Sec. 36.4254, as 
appropriate; and
    (iii) Allowable discounts, provided that:
    (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. This 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
    (5) For a loan to refinance a purchase money lien on a manufactured 
home and to purchase a lot (38 U.S.C. 3712(a)(1)(G)) on which the 
manufactured home is or will be placed:
    (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 Sec. 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 Sec. 36.4232 or Sec. 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

[[Page 548]]

discount after the commitment is issued, are hereby delegated to those 
officials designated by Sec. 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 Sec. 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 produced by the following computation:

Subtract from the manufacturer's invoice cost the manufactuer's invoice 
cost of any components (furnishings, accessories, equipment) removed 
from the unit by the dealer. To the remainder add the dealer's cost for 
any components added by such dealer. The sum so obtained shall be the 
figure to be multiplied by the specified percentage.
    (ii) 100 percent of the actual amount of fees and charge permitted 
in Sec. 36.4232.
    (2) In the case of a loan to purchase a new manufactured home unit 
plus the cost of necessary site preparation where the veteran owns the 
lot, the loan amount shall be limited to the amount determined in 
paragraph (d)(1) of this section plus such costs of necessary site 
preparation as are approved by the Secretary.
    (3) In the case of a loan to purchase a new manufactured home unit 
plus the purchase of an undeveloped lot on which to place such home plus 
the cost of necessary site preparation, the loan amount shall be limited 
to the amount determined in paragraph (d)(1) of this section plus the 
reasonable value of the undeveloped lot as determined by the Secretary 
plus such costs of necessary site preparation as are approved by the 
Secretary.
    (4) In the case of a loan to purchase a new manufactured home unit 
plus the cost of a suitably developed lot on which to place such home, 
the loan amount shall be limited to the amount determined in paragraph 
(d)(1) of this section plus the reasonable value of the developed lot as 
determined by the Secretary.
    (5) In the case of a loan to purchase a lot upon which will be 
placed a manufactured home owned by the veteran the loan is limited to 
the reasonable value of a developed lot or the reasonable value plus 
such amount as is determined by the Secretary to be appropriate to cover 
the cost of necessary site preparation for an undeveloped lot.
    (6) In the case of a used manufactured home the maximum loan may not 
exceed the reasonable value as established 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 Sec. 36.4232 or Sec. 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 Sec. 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 Sec. 36.4220(a).


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


[[Page 549]]


    (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:
    (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, not to exceed the reasonable value of the 
lot, as authorized by Sec. 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 Sec. 36.4232 or Sec. 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 Sec. 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 Sec. 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. However, paragraph (d) already exists, and the redesignation 
resulted in two paragraph (d)s.
    (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 included in the manufactured home 
loan as enumerated in Sec. 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

[[Page 550]]

fee inspections may be included in the loan amount or the claim amount 
and charged to the borrower pursuant to the provisions of Sec. 36.4232 
(a) and (b).

(The information collection requirements contained in Sec. 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 a lot pursuant to paragraph (a)(8) of 
this section, closing costs and prepaid items incident to the real 
estate portion of any manufactured home loan must be paid in cash and 
may not be included in the loan amount.


(Authority: 38 U.S.C. 3712 (a)(4), (a)(5), (g))

[48 FR 40227, Sept. 6, 1983, as amended at 54 FR 34988, Aug. 23, 1989; 
58 FR 37858, July 14, 1993]