[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: 38CFR36.4222]

[Page 560-561]
 
            TITLE 38--PENSIONS, BONUSES, AND VETERANS' RELIEF
 
          CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS (CONTINUED)
 
PART 36--LOAN GUARANTY--Table of Contents
 
Sec. 36.4222  Hazard insurance.

    (a) The holder shall require insurance policies to be procured and 
maintained in an amount sufficient to protect the security against risks 
or hazards to which it may be subjected to the extent customary in the 
locality. The costs of such required insurance coverage may be paid for 
by the veteran. Only the costs for one year may be included in the loan 
amount.
    (1) Flood insurance will be required on any manufactured home, 
building or personal property securing a loan at any time during the 
term of the loan that such security is located in an area

[[Page 561]]

identified by the Federal Emergency Management Agency as having special 
flood hazards and in which flood insurance has been made available under 
the National Flood Insurance Act, as amended. The amount of flood 
insurance must be at least equal to the lesser of the outstanding 
principal balance of the loan or the maximum limit of coverage available 
for the particular type of property under the National Flood Insurance 
Act, as amended. The Secretary cannot guarantee a loan for the 
acquisition or construction of property located in an area identified by 
the Federal Emergency Management Agency as having special flood hazards 
unless the community in which such area is situated is then 
participating in the National Flood Insurance Program.


(Authority: 42 U.S.C. 4012a, 4106(a))

    (2) Broad Lender's Protection Insurance or its equivalent is 
required to protect against loss for any items missing from the 
manufactured home at time of repossession and to cover repossession 
expenses including, but not limited to, breakdown and transport charges, 
permit and export fees, and an amount, limited by the Secretary, of 
unpaid park rent.
    (b) All monies under such policies covering payment of insured 
losses shall be applied to restoration of the security or to the loan 
balance.

[58 FR 37859, July 14, 1993, as amended at 62 FR 5531, Feb. 6, 1997]