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Title 38 — Veterans’ Benefits

Part III · Chapter 37 — Housing and Small Business Loans

§ 3713. Release from liability under guaranty

Statutory text

(a)

Whenever any veteran disposes of residential property securing a guaranteed, insured, or direct housing loan obtained by the veteran, the Secretary, upon application made by such veteran and by the transferee incident to such disposal, shall issue to such veteran in connection with such disposal a release relieving the veteran of all further liability to the Secretary on account of such loan (including liability for any loss resulting from any default of the transferee or any subsequent purchaser of such property) if the Secretary has determined, after such investigation as the Secretary may deem appropriate, that (1) the loan is current, and (2) the purchaser of such property from such veteran (A) is obligated by contract to purchase such property and to assume full liability for the repayment of the balance of the loan remaining unpaid, and has assumed by contract all of the obligations of the veteran under the terms of the instruments creating and securing the loan, and (B) qualifies from a credit standpoint, to the same extent as if the transferee were a veteran eligible for purposes specified in section 3710 of this title, for a guaranteed or insured or direct loan in an amount equal to the unpaid balance of the obligation for which the transferee has assumed liability.

(b)

If any veteran disposes of residential property securing a guaranteed, insured, or direct housing loan obtained by the veteran under this chapter without receiving a release from liability with respect to such loan under subsection (a), and a default subsequently occurs which results in liability of the veteran to the Secretary on account of the loan, the Secretary may relieve the veteran of such liability if the Secretary determines, after such investigation as the Secretary deems appropriate, that the property was disposed of by the veteran in such a manner, and subject to such conditions, that the Secretary would have issued the veteran a release from liability under subsection (a) with respect to the loan if the veteran had made application therefor incident to such disposal. Failure of a transferee to assume by contract all of the liabilities of the original veteran-borrower shall bar such release of liability only in cases in which no acceptable transferee, either immediate or remote, is legally liable to the Secretary for the indebtedness of the original veteran-borrower arising from termination of the loan. The failure of a veteran to qualify for release from liability under this subsection does not preclude relief from being granted under section 5302(b) of this title, if the veteran is eligible for relief under that section.

(c)

This section shall apply only to loans for which commitments are made before .

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

  1. Pub. L. 85–857 · 72 Stat. 1105

    Enacted · 38 U.S.C. § 3713

    Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1212, § 1817

    Source evidence

    Code source credit
    Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1212, § 1817

  2. Veterans’ Compensation and Relief Act of 1972

    Pub. L. 92–328 title II § 204 · 86 Stat. 393

    1. Amended · 38 U.S.C. § 3713

      Pub. L. 92–328 designated existing provisions as subsec. (a)

    2. Added · 38 U.S.C. § 3713

      Pub. L. 92–328 added subsec. (b)

    Source evidence

    Code amendment note
    Pub. L. 92–328 designated existing provisions as subsec. (a) and added subsec. (b).

    Enacted provision · exact public law section
    Sec. 204. Section 1817 of title 38, United States Code, is amended by 72 Stat. 1212. inserting “(a)” immediately before “Whenever any veteran” and by adding a new subsection (b) as follows: “(b) If any veteran disposes of residential property securing a Liability, release. guaranteed, insured, or direct loan obtained by him under this chapter without receiving a release from liability with respect to such loan under subsection (a), and a default subsequently occurs which results in liability of the veteran to the Administrator on account of the loan, the Administrator may relieve the veteran of such liability if he determines, after such investigation as he deems appropriate, that the property was disposed of by the veteran in such a manner, and subject to such conditions, that the Administrator would have issued the veteran a release from liability under subsection (a) with respect to the loan if the veteran had made application therefor incident to such disposal. Failure of a transferee to assume by contract all of the liabilities of the original veteran-borrower shall bar such release of liability only in cases in which no acceptable transferee, either immediate or remote, is legally liable to the Administrator for the indebtedness of the original veteran-borrower arising from termination of the loan. The failure of a veteran to qualify for release from liability under this subsection does not preclude relief from being granted under subsection 3102(b) of this title, if eligible thereunder.”

  3. Veterans Housing Amendments Act of 1976

    Pub. L. 94–324 § 7(18) · 90 Stat. 720

    1. Substituted · 38 U.S.C. § 3713(a)

      Pub. L. 94–324, § 7(18), substituted “the veteran” for “him”

    2. Substituted · 38 U.S.C. § 3713(a)

      Pub. L. 94–324, § 7(18), substituted “the Administrator may deem” for “he may deem”

    3. Substituted · 38 U.S.C. § 3713(a)

      Pub. L. 94–324, § 7(18), substituted “the transferee were a veteran” for “he were a veteran”

    4. Substituted · 38 U.S.C. § 3713(a)

      Pub. L. 94–324, § 7(18), substituted “the transferee has assumed” for “he has assumed”

    5. Substituted · 38 U.S.C. § 3713(a)

      Pub. L. 94–324, § 7(18), substituted “is obligated” for “has obligated himself”

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 94–324, § 7(18), substituted “the veteran” for “him” in two places, “the Administrator may deem” for “he may deem”, “the transferee were a veteran” for “he were a veteran”, “the transferee has assumed” for “he has assumed”, and “is obligated” for “has obligated himself”.

    Enacted provision · exact public law section
    (18) by striking out in section 1817(a) “him” wherever it appears and inserting in lieu thereof “the veteran”, by striking out “he” the first time it appears and inserting in lieu thereof “the Administrator”, by striking out “has obligated himself” and inserting in lieu thereof “is obligated”, and by striking out “he” the second and third time it appears and inserting in lieu thereof “the transferee”;

  4. Veterans Housing Amendments Act of 1976

    Pub. L. 94–324 § 7(19) · 90 Stat. 720

    1. Substituted · 38 U.S.C. § 3713(b)

      Pub. L. 94–324, § 7(19), substituted “obtained by the veteran” for “obtained by him”

    2. Substituted · 38 U.S.C. § 3713(b)

      Pub. L. 94–324, § 7(19), substituted “the Administrator determines” for “he determines”

    3. Substituted · 38 U.S.C. § 3713(b)

      Pub. L. 94–324, § 7(19), substituted “the Administrator deems” for “he deems”

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 94–324, § 7(19), substituted “obtained by the veteran” for “obtained by him”, “the Administrator determines” for “he determines”, and “the Administrator deems” for “he deems”.

    Enacted provision · exact public law section
    (19) by striking out in section 1817(b) “him” and “he” and inserting in lieu thereof “the veteran” and “the Administrator”, respectively;

  5. Veterans’ Health Care, Training, and Small Business Loan Act of 1981

    Pub. L. 97–72 § 303(f)(1) · 95 Stat. 1047

    Substituted · 38 U.S.C. § 3713(a)

    Pub. L. 97–72, § 303(f)(1), substituted “direct housing loan” for “direct loan”

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 97–72, § 303(f)(1), substituted “direct housing loan” for “direct loan”.

    Enacted provision · exact public law section
    (1) by inserting “housing” in subsection (a) after “direct” the first place it appears; and

    Effective date note
    Amendment by Pub. L. 97–72 effective at end of 180-day period beginning on Nov. 3, 1981, see section 305 of Pub. L. 97–72, set out as an Effective Date note under section 3741 of this title.

  6. Veterans’ Health Care, Training, and Small Business Loan Act of 1981

    Pub. L. 97–72 § 303(f)(2) · 95 Stat. 1047

    Substituted · 38 U.S.C. § 3713(b)

    Pub. L. 97–72, § 303(f)(2), substituted “or direct housing loan obtained” for “or direct loan obtained”

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 97–72, § 303(f)(2), substituted “or direct housing loan obtained” for “or direct loan obtained”.

    Enacted provision · exact public law section
    (2) by inserting “housing” in the first sentence of subsection (b) after “direct”.

    Effective date note
    Amendment by Pub. L. 97–72 effective at end of 180-day period beginning on Nov. 3, 1981, see section 305 of Pub. L. 97–72, set out as an Effective Date note under section 3741 of this title.

  7. Veterans’ Home Loan Program Improvements and Property Rehabilitation Act of 1987

    Pub. L. 100–198 § 10(a)(2) · 101 Stat. 1315

    Added · 38 U.S.C. § 3713(c)

    Pub. L. 100–198 added subsec. (c)

    Source evidence

    Code amendment note
    Subsec. (c). Pub. L. 100–198 added subsec. (c).

    Enacted provision · exact public law section
    (2) Section 1817 is amended by adding at the end the following new subsection: “(c) This section shall apply only to loans for which commitments are made before March 1, 1988.”.

  8. Veterans

    Pub. L. 100–322 § 415(b)(2)(B) · 102 Stat. 487

    Changed · 38 U.S.C. § 3713

    Pub. L. 100–322, § 415(b)(2)(B), renumbered section 1817 of this title as this section

    Source evidence

    Code amendment note
    Pub. L. 100–322, § 415(b)(2)(B), renumbered section 1817 of this title as this section.

    Enacted provision · exact public law section
    (B) Section 1817, as amended by subparagraph (A) of this paragraph, and section 1817 A are redesignated as sections 1813 and 1814, respectively, and transferred so that they will appear after section 1812, as transferred by paragraph (4)(C) of this subsection.

  9. Veterans

    Pub. L. 100–322 § 415(b)(2)(A) · 102 Stat. 487

    Substituted · 38 U.S.C. § 3713(a)

    Pub. L. 100–322, § 415(b)(2)(A), substituted “for purposes specified in section 1810” for “under section 1810”

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 100–322, § 415(b)(2)(A), substituted “for purposes specified in section 1810” for “under section 1810”.

    Enacted provision · exact public law section
    (A) Section 1817(a) is amended by striking out “under section 1810” and inserting in lieu thereof “for purposes specified in section 1810”

  10. Veterans Home Loan Indemnity and Restructuring Act of 1989

    Pub. L. 101–237 title III § 313(b)(1) · 103 Stat. 2062

    Substituted · 38 U.S.C. § 3713(a); 38 U.S.C. § 3713(b)

    Pub. L. 101–237 substituted “Secretary” for “Administrator” wherever appearing

    Source evidence

    Code amendment note
    Subsecs. (a), (b). Pub. L. 101–237 substituted “Secretary” for “Administrator” wherever appearing.

    Enacted provision · exact public law section
    (1) Chapters 23, 24, and 37 are amended by striking out “Administrator” and “Administrator’s” each place such terms appear (other than in sections 906(e)(2) and 1812(h)(2)(B) and in section 1845(a) the third place “Administrator” appears) and inserting in lieu thereof “Secretary” and “Secretary’s”, respectively.

  11. Department of Veterans Affairs Health-Care Personnel Act of 1991

    Pub. L. 102–40 title IV § 402(d)(1) · 105 Stat. 187

    Substituted · 38 U.S.C. § 3713(b)

    Pub. L. 102–40 substituted “5302(b)” for “3102(b)”

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 102–40 substituted “5302(b)” for “3102(b)”.

    Enacted provision · exact public law section
    (1) Each provision of title 38, United States Code, that contains a reference to a section redesignated by section 401(a)(4) or by subsection (b) is amended so that the reference refers to the section as redesignated.

  12. Pub. L. 102–83 § 5(a) · 105 Stat. 378

    Changed · 38 U.S.C. § 3713

    Pub. L. 102–83, § 5(a), renumbered section 1813 of this title as this section

    Source evidence

    Code amendment note
    Pub. L. 102–83, § 5(a), renumbered section 1813 of this title as this section.

    Enacted provision · exact public law section
    (a) Redesignation of Sections to Conform to Chapter Numbers.— Each section contained in any of chapters 11 through 23 is redesignated by replacing the first digit of the section number with the number of the chapter containing that section. Each section contained in any of chapters 24 through 42 is redesignated so that the first two digits of the section number of that section are the same as the chapter number of the chapter containing that section.

  13. Pub. L. 102–83 § 5(c)(1) · 105 Stat. 378

    Substituted · 38 U.S.C. § 3713(a)

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

    Source evidence

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

    Enacted provision · exact public law section
    (1) Each provision of title 38, United States Code, that contains a reference to a section redesignated by subsection (a) is amended so that the reference refers to the section as redesignated.

  14. Veterans’ Benefits Improvements Act of 1994

    Pub. L. 103–446 title XII § 1201(e)(15) · 108 Stat. 4645

    Substituted · 38 U.S.C. § 3713(b)

    Pub. L. 103–446 before period at end substituted “section 5302(b) of this title, if the veteran is eligible for relief under that section” for “subsection 5302(b) of this title, if eligible thereunder”

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 103–446 before period at end substituted “section 5302(b) of this title, if the veteran is eligible for relief under that section” for “subsection 5302(b) of this title, if eligible thereunder”.

    Enacted provision · exact public law section
    (15) Section 3713(b) is amended in the last sentence by striking out “subsection 5302(b) of this title, if eligible thereunder” and inserting in lieu thereof “section 5302(b) of this title, if the veteran is eligible for relief under that section”.

20 of 21 references resolved to an enrolled provision · 1 partial

Editorial Notes

Amendments1972–1994 · 8 rounds

1994

Subsec. (b). Pub. L. 103–446 before period at end substituted “section 5302(b) of this title, if the veteran is eligible for relief under that section” for “subsection 5302(b) of this title, if eligible thereunder”.

1991

Pub. L. 102–83, § 5(a), renumbered section 1813 of this title as this section.

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

Subsec. (b). Pub. L. 102–40 substituted “5302(b)” for “3102(b)”.

1989

Subsecs. (a), (b). Pub. L. 101–237 substituted “Secretary” for “Administrator” wherever appearing.

1988

Pub. L. 100–322, § 415(b)(2)(B), renumbered section 1817 of this title as this section.

Subsec. (a). Pub. L. 100–322, § 415(b)(2)(A), substituted “for purposes specified in section 1810” for “under section 1810”.

1987

Subsec. (c). Pub. L. 100–198 added subsec. (c).

1981

Subsec. (a). Pub. L. 97–72, § 303(f)(1), substituted “direct housing loan” for “direct loan”.

Subsec. (b). Pub. L. 97–72, § 303(f)(2), substituted “or direct housing loan obtained” for “or direct loan obtained”.

1976

Subsec. (a). Pub. L. 94–324, § 7(18), substituted “the veteran” for “him” in two places, “the Administrator may deem” for “he may deem”, “the transferee were a veteran” for “he were a veteran”, “the transferee has assumed” for “he has assumed”, and “is obligated” for “has obligated himself”.

Subsec. (b). Pub. L. 94–324, § 7(19), substituted “obtained by the veteran” for “obtained by him”, “the Administrator determines” for “he determines”, and “the Administrator deems” for “he deems”.

1972

Pub. L. 92–328 designated existing provisions as subsec. (a) and added subsec. (b).

Statutory Notes and Related Subsidiaries

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–72 effective at end of 180-day period beginning on , see section 305 of Pub. L. 97–72, set out as an Effective Date note under section 3741 of this title.

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–324 effective , see section 9(a) of Pub. L. 94–324, set out as a note under section 3701 of this title.

Effective Date of 1972 Amendment

Pub. L. 92–328, title III, § 301(c), , 86 Stat. 398, provided that: “Sections 201 through 206 of this Act [amending this section and sections 210, 1820 [now 3720], 3102 [now 5302], and 3503 [now 6103] of this title, and enacting provisions set out as a note under section 5302 of this title] shall take effect upon the date of enactment of this Act [].”

Credits

1958–1994 · 10 acts
  1. 1958Pub. L. 85–857, , 72 Stat. 1212, § 1817
  2. 1972Pub. L. 92–328, title II, § 204, , 86 Stat. 397
  3. 1976Pub. L. 94–324, § 7(18), (19), , 90 Stat. 722
  4. 1981Pub. L. 97–72, title III, § 303(f), , 95 Stat. 1060
  5. 1987Pub. L. 100–198, § 10(a)(2), , 101 Stat. 1323
  6. 1988renumbered § 1813 and amended Pub. L. 100–322, title IV, § 415(b)(2), , 102 Stat. 550
  7. 1989Pub. L. 101–237, title III, § 313(b)(1), , 103 Stat. 2077
  8. 1991Pub. L. 102–40, title IV, § 402(d)(1), , 105 Stat. 239
  9. 1991renumbered § 3713 and amended Pub. L. 102–83, § 5(a), (c)(1), , 105 Stat. 406
  10. 1994Pub. L. 103–446, title XII, § 1201(e)(15), , 108 Stat. 4686.
Show as published

(Pub. L. 85–857, , 72 Stat. 1212, § 1817; Pub. L. 92–328, title II, § 204, , 86 Stat. 397; Pub. L. 94–324, § 7(18), (19), , 90 Stat. 722; Pub. L. 97–72, title III, § 303(f), , 95 Stat. 1060; Pub. L. 100–198, § 10(a)(2), , 101 Stat. 1323; renumbered § 1813 and amended Pub. L. 100–322, title IV, § 415(b)(2), , 102 Stat. 550; Pub. L. 101–237, title III, § 313(b)(1), , 103 Stat. 2077; Pub. L. 102–40, title IV, § 402(d)(1), , 105 Stat. 239; renumbered § 3713 and amended Pub. L. 102–83, § 5(a), (c)(1), , 105 Stat. 406; Pub. L. 103–446, title XII, § 1201(e)(15), , 108 Stat. 4686.)

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