38 USC 3702 - Basic entitlement

U.S Code last checked for updates: Sep 20, 2026

§ 3702.

Basic entitlement

(a)

(1)

The veterans described in paragraph (2) of this subsection are eligible for the housing loan benefits of this chapter. In the case of any veteran who served on active duty during two or more of the periods specified in paragraph (2) for which eligibility for the housing loan benefits under this chapter may be granted, entitlement derived from service during the most recent such period (A) shall cancel any unused entitlement derived from service during any earlier such period, and (B) shall be reduced by the amount by which entitlement from service during any earlier such period has been used to obtain a direct, guaranteed, or insured housing loan—

(i)

on real property which the veteran owns at the time of application; or

(ii)

as to which the Secretary has incurred actual liability or loss, unless in the event of loss or the incurrence and payment of such liability by the Secretary the resulting indebtedness of the veteran to the United States has been paid in full.

(2)

The veterans referred to in the first sentence of paragraph (1) of this subsection are the following:

(A)

Each veteran who served on active duty at any time during World War II, the Korean conflict, or the Vietnam era and whose total service was for 90 days or more.

(B)

Each veteran who after September 15, 1940, was discharged or released from a period of active duty for a service-connected disability.

(C)

Each veteran, other than a veteran described in clause (A) or (B) of this paragraph, who—

(i)

served after July 25, 1947, for a period of more than 180 days and was discharged or released therefrom under conditions other than dishonorable; or

(ii)

has served more than 180 days in active duty status and continues on active duty without a break therein.

(D)

Each veteran who served on active duty for 90 days or more at any time during the Persian Gulf War, other than a veteran ineligible for benefits under this title by reason of section 5303A(b) of this title.

(E)

Each veteran described in section 3701(b)(5) of this title.

(F)

Each veteran who was discharged or released from a period of active duty of 90 days or more by reason of a sole survivorship discharge (as that term is defined in section 1174(i) of title 10).

(G)

Each individual described in section 3701(b)(7) of this title.

(3)

Any unused entitlement of World War II or Korean conflict veterans which expired under provisions of law in effect before October 23, 1970, is hereby restored and shall not expire until used.

(4)

A veteran’s entitlement under this chapter shall not be reduced by any entitlement used by the veteran’s spouse which was based upon the provisions of paragraph (3) of section 3701(b) of this title.

(b)

In computing the aggregate amount of guaranty or insurance housing loan entitlement available to a veteran under this chapter, the Secretary may exclude the amount of guaranty or insurance housing loan entitlement used for any guaranteed, insured, or direct loan under the following circumstances:

(1)

(A)

The property which secured the loan has been disposed of by the veteran or has been destroyed by fire or other natural hazard; and

(B)

the loan has been repaid in full, or the Secretary has been released from liability as to the loan, or if the Secretary has suffered a loss on such loan, the loss has been paid in full.

(2)

A veteran-transferee has agreed to assume the outstanding balance on the loan and consented to the use of the veteran-transferee’s entitlement, to the extent that the entitlement of the veteran-transferor had been used originally, in place of the veteran-transferor’s for the guaranteed, insured, or direct loan, and the veteran-transferee otherwise meets the requirements of this chapter.

(3)

(A)

The loan has been repaid in full; and

(B)

the loan for which the veteran seeks to use entitlement under this chapter is secured by the same property which secured the loan referred to in subparagraph (A) of this paragraph.

(4)

In a case not covered by paragraph (1) or (2)—

(A)

the loan has been repaid in full and, if the Secretary has suffered a loss on the loan, the loss has been paid in full; or

(B)

the Secretary has been released from liability as to the loan and, if the Secretary has suffered a loss on the loan, the loss has been paid in full.

The Secretary may, in any case involving circumstances the Secretary deems appropriate, waive one or more of the conditions prescribed in paragraph (1). The authority of the Secretary under this subsection to exclude an amount of guaranty or insurance housing loan entitlement previously used by a veteran may be exercised only once for that veteran under the authority of paragraph (4).

(c)

An honorable discharge shall be deemed to be a certificate of eligibility to apply for a guaranteed loan. Any veteran who does not have a discharge certificate, or who received a discharge other than honorable, may apply to the Secretary for a certificate of eligibility. Upon making a loan guaranteed or insured under this chapter, the lender shall forthwith transmit to the Secretary a report thereon in such detail as the Secretary may, from time to time, prescribe. Where the loan is guaranteed, the Secretary shall provide the lender with a loan guaranty certificate or other evidence of the guaranty. The Secretary shall also endorse on the veteran’s discharge, or eligibility certificate, the amount and type of guaranty used, and the amount, if any, remaining. Nothing in this chapter shall preclude the assignment of any guaranteed loan or the security therefor.

ereon in such detail as the Secretary may, from time to time, prescribe. Where the loan is guaranteed, the Secretary shall provide the lender with a loan guaranty certificate or other evidence of the guaranty. The Secretary shall also endorse on the veteran’s discharge, or eligibility certificate, the amount and type of guaranty used, and the amount, if any, remaining. Nothing in this chapter shall preclude the assignment of any guaranteed loan or the security therefor.

(d)

Housing loans will be automatically guaranteed under this chapter only if made (1) by any Federal land bank, national bank, State bank, private bank, building and loan association, insurance company, credit union, or mortgage and loan company, that is subject to examination and supervision by an agency of the United States or of any State, or (2) by any State, or (3) by any lender approved by the Secretary pursuant to standards established by the Secretary. Any housing loan proposed to be made to a veteran pursuant to this chapter by any lender not of a class specified in the preceding sentence may be guaranteed by the Secretary if the Secretary finds that it is in accord otherwise with the provisions of this chapter.

(e)

The Secretary may at any time upon thirty days’ notice require housing loans to be made by any lender or class of lenders to be submitted to the Secretary for prior approval. No guaranty or insurance liability shall exist with respect to any such loan unless evidence of guaranty or insurance is issued by the Secretary.

(f)

Any housing loan at least 20 percent of which is guaranteed under this chapter may be made by any national bank or Federal savings and loan association, or by any bank, trust company, building and loan association, or insurance company, organized or authorized to do business in the District of Columbia. Any such loan may be so made without regard to the limitations and restrictions of any other law relating to—

(1)

ratio of amount of loan to the value of the property;

(2)

maturity of loan;

(3)

requirement for mortgage or other security;

(4)

dignity of lien; or

(5)

percentage of assets which may be invested in real estate loans.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1203, § 1802; Pub. L. 86–73, § 1, June 30, 1959, 73 Stat. 156; Pub. L. 87–84, § 1(b), July 6, 1961, 75 Stat. 201; Pub. L. 90–19, § 25(1), May 25, 1967, 81 Stat. 28; Pub. L. 90–77, title IV, § 403(a), Aug. 31, 1967, 81 Stat. 190; Pub. L. 91–506, § 2(a), Oct. 23, 1970, 84 Stat. 1108; Pub. L. 91–584, § 5(b), Dec. 24, 1970, 84 Stat. 1576; Pub. L. 93–569, § 2(a), (b), Dec. 31, 1974, 88 Stat. 1863; Pub. L. 94–324, § 7(3)–(5), June 30, 1976, 90 Stat. 721; Pub. L. 95–476, title I, § 102, Oct. 18, 1978, 92 Stat. 1497; Pub. L. 97–72, title III, § 303(b), Nov. 3, 1981, 95 Stat. 1060; Pub. L. 97–295, § 4(61), Oct. 12, 1982, 96 Stat. 1309; Pub. L. 98–223, title II, § 204, Mar. 2, 1984, 98 Stat. 42; Pub. L. 100–322, title IV, § 415(a)(1), (2), May 20, 1988, 102 Stat. 549, 550; Pub. L. 101–237, title III, §§ 310, 313(b)(1), Dec. 18, 1989, 103 Stat. 2075, 2077; Pub. L. 102–25, title III, § 341, Apr. 6, 1991, 105 Stat. 92; Pub. L. 102–40, title IV, § 402(d)(1), May 7, 1991, 105 Stat. 239; renumbered § 3702 and amended Pub. L. 102–83, § 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 102–547, § 2(a)(2), Oct. 28, 1992, 106 Stat. 3633; Pub. L. 103–446, title IX, § 902, title XII, § 1201(f)(4), Nov. 2, 1994, 108 Stat. 4676, 4687; Pub. L. 105–368, title VI, § 603(a), Nov. 11, 1998, 112 Stat. 3348; Pub. L. 106–117, title VII, § 711, Nov. 30, 1999, 113 Stat. 1584; Pub. L. 107–103, title IV, § 405(a), Dec. 27, 2001, 115 Stat. 993; Pub. L. 108–183, title IV, § 403, Dec. 16, 2003, 117 Stat. 2664; Pub. L. 110–317, § 6(a), Aug. 29, 2008, 122 Stat. 3528; Pub. L. 116–315, title II, § 2101(b), Jan. 5, 2021, 134 Stat. 4981.)

cite as: 38 USC 3702