[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: 38CFR36.4210]

[Page 555]
 
            TITLE 38--PENSIONS, BONUSES, AND VETERANS' RELIEF
 
          CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS (CONTINUED)
 
PART 36--LOAN GUARANTY--Table of Contents
 
Sec. 36.4210  Joint loans.

    (a) Except as provided in paragraph (b) of this section, the prior 
approval of the Secretary is required in respect to any manufactured 
home loan to be made to two or more borrowers who become jointly and 
severally liable, or jointly liable therefor, and who will acquire an 
undivided interest in the property to be purchased or who will otherwise 
share in the proceeds of the loan, or in respect to any loan to be made 
to an eligible veteran whose interest in the property owned, or to be 
acquired with the loan proceeds, is an undivided interest only. The 
amount of the guaranty shall be computed in such cases only on that 
portion of the loan allocable to the eligible veteran which, taking into 
consideration all relevant factors, represents the proper contribution 
of the veteran to the transaction. Such loans shall be secured to the 
extent required by 38 U.S.C. chapter 37 and the regulations concerning 
guaranty of manufactured home loans to veterans.
    (b) Notwithstanding the provisions of paragraph (a) of this section, 
the joinder of the spouse of a veteran-borrower in the ownership of 
property shall not require prior approval or preclude the issuance of a 
guaranty based upon the entire amount of the loan. If both spouses be 
eligible veterans, either or both, within permissible maxima, may 
utilize available guaranty entitlement.
    (c) For the purpose of determining the rights and the liabilities of 
the Secretary with respect to a loan subject to paragraph (a) of this 
section, credits legally applicable to the entire loan shall be applied 
as follows:
    (1) Prepayments made expressly for credit to that portion of the 
indebtedness allocable to the veteran shall be applied to such portion 
of the indebtedness. All other payments shall be applied ratably to 
those portions of the loan allocable respectively to the veteran and to 
the other debtors.
    (2) Proceeds of the sale or other liquidation of the security shall 
be applied ratably to the respective portions of the loan, such portion 
of the proceeds as represents the interest of the veteran being applied 
to that portion of the loan allocable to such veteran.

(Authority: 38 U.S.C. 3703(c)(1))

[44 FR 22725, Apr. 17, 1979, as amended at 55 FR 37473, Sept. 12, 1990]