[Federal Register Volume 70, Number 17 (Thursday, January 27, 2005)]
[Rules and Regulations]
[Pages 3892-3893]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-1540]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 36

RIN 2900-AL23


Loan Guaranty: Implementation of Public Law 107-103

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document affirms, with one modification, an amendment to 
the Department of Veterans Affairs (VA) loan guaranty regulations 
implementing sections 401 through 404 of the Veterans Education and 
Benefits Expansion Act of 2001. The amendment incorporates into the 
regulations the following statutory changes: an increase in the maximum 
amount of loan guaranty

[[Page 3893]]

entitlement from $50,750 to $60,000, a liberalization of the 
requirements regarding Memoranda of Understanding (MOU) between VA and 
Native American Tribes in order for their members to qualify for direct 
housing loans to Native American veterans, a revision of the 
requirement that loan instruments used in connection with VA guaranteed 
loans contain a statement that such loans are not assumable without 
prior VA approval, and an increase in the maximum specially adapted 
housing grant and in the special housing adaptations grant. Because 
these special housing grant amounts have been increased by subsequent 
legislation, this final rule reflects the current statutory limits of 
$50,000 and $10,000, respectively.

DATES: Effective Date: This rule is effective on January 27, 2005.

FOR FURTHER INFORMATION CONTACT: Mr. Robert D. Finneran, Assistant 
Director for Policy and Valuation (262), Loan Guaranty Service, 
Veterans Benefits Administration, Department of Veterans Affairs, 
Washington, DC 20420, (202) 273-7368.

SUPPLEMENTARY INFORMATION: Under 38 U.S.C. chapter 37, VA guarantees 
loans made by private lenders to veterans for the purchase, 
construction, and refinancing of homes owned and occupied by veterans. 
VA also makes direct housing loans to Native American veterans living 
on tribal trust land.
    In addition, under 38 U.S.C. chapter 21, VA provides grants to 
certain severely disabled veterans with qualifying permanent and total 
service-connected disabilities to make adaptations to their homes that 
are necessary because of the nature of the veterans' disabilities.
    Regulations detailing the procedures necessary for the Secretary to 
operate these programs are set forth in 38 CFR part 36. On February 10, 
2003, VA published in the Federal Register at 68 FR 6625 an interim 
final rule implementing sections 401 through 404 of Pub. L. 107-103. 
Section 36.4302 of 38 CFR was amended to reflect an increase in the 
maximum guaranty on a housing loan made to eligible veterans from 
$50,750 to $60,000. Section 36.4527 of 38 CFR was amended to allow VA 
to make housing loans to a Native American veteran if the tribe has 
entered into an MOU with another Federal agency with regard to loans to 
Native Americans residing on tribal lands, so long as the Secretary of 
VA determines that the MOU substantially complies with VA's home loan 
requirements. Section 36.4308 of 38 CFR was amended to require that the 
statement that loans are not assumable without prior VA approval appear 
on at least one, rather than all, instruments evidencing the loan or 
the security therefor. It was also amended to eliminate the requirement 
that the notice be in capital letters and on the first page of the 
document. Title 38 CFR 36.4404 was amended to reflect the increased 
maximum grants VA may make to certain veterans with total and permanent 
service connected disabilities to assist those veterans in adapting 
housing to their special needs. At the time of publication of the 
interim final rule, the specially adapted housing grant had been 
increased from $43,000 to $48,000 and the special housing adaptations 
grant was increased from $8,250 to $9,250.
    The interim final rule provided for a 60-day comment period that 
ended April 11, 2003. We received no comments. Based on the rationale 
set forth in the interim final rule we now affirm as a final rule the 
changes made to 38 CFR 36.4302, 36.4308, and 36.4527.
    However, we are modifying the change made to Sec.  36.4404 of 38 
CFR by the interim final rule. Section 402 of Pub. L. 108-183, enacted 
December 16, 2003, further increased the maximum specially adapted 
housing grant to $50,000 and the special housing adaptations grant to 
$10,000. This final rule reflects the current statutory limits.

Paperwork Reduction Act

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

Administrative Procedure Act

    Changes to 38 CFR 36.4404 are being published without regard to the 
notice-and-comment and delayed-effective-date provisions of 5 U.S.C. 
553 since they merely conform VA's existing rules to the statutory 
amendments made by Pub. L. 108-183. Accordingly, these changes involve 
interpretive rules exempt from the notice-and-comment and delayed-
effective-date requirement of 5 U.S.C. 553(b) and (d).

Regulatory Flexibility Act

    For the reasons set forth in the interim final rule, the Secretary 
hereby certifies that this final rule will not have a significant 
economic impact on a substantial number of small entities as they are 
defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. Therefore, 
pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial 
and final regulatory flexibility analysis requirements of sections 603 
and 604.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in an expenditure by State, local, 
or tribal governments, in the aggregate, or by the private sector, of 
$100 million or more in any given year. As explained in the interim 
final rule, this rule would have no such effect on State, local, or 
tribal governments, nor will it impose costs on the private sector.

    The Catalog of Federal Domestic Assistance Program numbers are 
64.114 and 64.119.

List of Subjects in 38 CFR Part 36

    Condominiums, Flood insurance, Housing, Indians, Individuals with 
disabilities, Loan programs-housing and community development, Loan 
programs-Indians, Loan programs-veterans, Manufactured homes, Mortgage 
insurance, Reporting and recordkeeping requirements, Veterans.

    Approved: January 6, 2005.
Anthony J. Principi,
Secretary of Veterans Affairs.

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Accordingly, the interim rule amending 38 CFR part 36, which was 
published in the Federal Register at 68 FR 6625 on February 10, 2003, 
is adopted as a final rule with the following changes.

PART 36--LOAN GUARANTY

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1. The authority citation for part 36 continues to read as follows:

    Authority: 38 U.S.C. 501, 3701-3704, 3707, 3710-3714, 3719, 
3720, 3729, 3762, unless otherwise noted.

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2. In Sec.  36.4404, paragraph (a) introductory text, paragraph (b)(2), 
and the authority citation at the end of the section are revised to 
read as follows:


Sec.  36.4404  Computation of cost.

    (a) Computation of cost of housing unit. Under section 2101(a) of 
chapter 21, for the purpose of computing the amount of benefits payable 
to a veteran-beneficiary, there may be included in the total cost to 
the veteran the following amount, not to exceed $50,000.
* * * * *
    (b) * * *
    (2) $10,000.

(Authority: 38 U.S. C. 2102)

[FR Doc. 05-1540 Filed 1-26-05; 8:45 am]
BILLING CODE 8320-01-P