[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: 38CFR36.4232]

[Page 567-569]
 
            TITLE 38--PENSIONS, BONUSES, AND VETERANS' RELIEF
 
          CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS (CONTINUED)
 
PART 36--LOAN GUARANTY--Table of Contents
 
Sec. 36.4232  Allowable fees and charges; manufactured home unit.

    (a) Incident to the origination of a guaranteed loan for the 
purchase or refinancing of a manufactured home unit only, no charge 
shall be made against, or paid by, the veteran-borrower without the 
express prior approval of the 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 Sec. 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

[[Page 568]]

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 insurance as the veteran may 
desire, and any other expenses normally charged to a manufactured home 
purchaser under local customs may be paid by the borrower other than 
from the loan proceeds.
    (2) For the purchase of a used manufactured home unit, the fee of a 
Department of Veterans Affairs appraiser and of compliance inspectors 
designated by the Department of Veterans Affairs, except appraisal fees 
incurred for the predetermination of reasonable value requested by 
others than veteran or lender, may be paid by the borrower from other 
than the loan proceeds.


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

    (d) Subject to the limitations set forth in this section, the 
following may be included in the loan made for the purchase of a new 
(not used) manufactured home unit and paid out of the proceeds of the 
loan:
    (1) The actual cost of transportation or freight;
    (2) Setup charges for installing the manufactured home on site not 
to exceed $400 for a single-wide manufactured home or $800 for a double-
wide manufactured home.


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


If the actual costs exceed the limitations in this section, the veteran 
must certify that any excess cost has been paid in cash from the 
veteran's own resources 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, as appropriate. In computing the fee, the lender shall 
disregard any amount included in the loan to enable the borrower to pay 
such fee.


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

    (2) Subject to the limitations set out in paragraph (e)(5) of this 
section, a fee of one-half of one percent of the loan balance must be 
paid to the Secretary in a manner prescribed by the Secretary by a 
person assuming a loan to which section 3714 of chapter 37 of 38 U.S.C. 
applies. The instrument securing such a loan shall contain a provisions 
describing the right of the holder to collect this fee as trustee for 
the Department of Veterans Affairs. The loan holder shall list the 
amount of this fee in every assumption statement provided and include a 
notice that the fee must be paid to the holder immediately following 
loan settlement. The fee must be transmitted to the Secretary within 15 
days of receipt by the holder of notice of the transfer.


(Authority: 38 U.S.C. 3714, 3729)

    (3) The lender is required to pay to the Secretary the fee described 
in paragraph (e)(1) of this section within 15 days after loan closing. 
Any lender closing a loan, subject to the limitations set out in 
paragraph (e)(5) of this section, who fails to submit timely payment of 
this fee will be subject to a late charge equal to 4 percent of the 
total fee due. If payment of the 1 percent fee is more than 30 days 
after loan closing, interest will be assessed at a rate set in 
conformity with the Department of Treasury's Fiscal Requirements Manual. 
This interest charge is in addition to the 4 percent late charge, but 
the late charge is not included in the amount on which interest is 
computed. This interest charge is to be calculated on a daily basis 
beginning on the date of closing, although the interest will be assessed 
only on

[[Page 569]]

funding fee payments received more than 30 days after closing.


(Authority: 38 U.S.C. 501)

    (4) The lender is required to pay to the Secretary electronically 
through the Automated Clearing House (ACH) system 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 (CPU-to-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]