and expenses incurred by the Government National Mortgage Association as fiduciary pursuant to the agreement.

(2) The Administrator shall proportionately allocate and deposit the entire proceeds received from the sale of participations into the funds established pursuant to sections 1823 and 1824 of this chapter, as determined on an estimated basis, and the amounts so deposited shall be available for the purposes of the funds. The Administrator may nevertheless make such allocations of that part of the proceeds of participation sales representing anticipated interest collections on mortgage loans, including installment sale contracts, on other than estimated proportionate basis if determined necessary to assure payment of interest on advances theretofore made to the Administrator by the Secretary of the Treasury for direct loan purposes. The Administrator shall set aside and maintain necessary reserves in the funds established pursuant to sections 1823 and 1824 of this chapter to be used for meeting commitments pursuant to this subsection and, as the Administrator 1 determines to be necessary, for meeting interest payments on advances by the Secretary of the Treasury for direct loan purposes.

(f) Whenever loss, destruction, or damage to any residential property securing loans guaranteed, insured, made, or acquired by the Administrator under this chapter occurs as the result of a major disaster as determined by the President under the Disaster Relief Act of 1974, the Administrator shall (1) provide counseling and such other service to the owner of such property as may be feasible and shall inform such owner concerning the disaster assistance available from other Federal agencies and from State or local agencies, and (2) pursuant to subsection (a) (2) of this section, extend on an individual case basis such forbearance or indulgence to such owner as the Administrator determines to be warranted by the facts of the case and the circumstances of such owner.

§ 1821. Incontestability

Any evidence of guaranty or insurance issued by the Administrator shall be conclusive evidence of the eligibility of the loan for guaranty or insurance under the provisions of this chapter and of the amount of such guaranty or insurance. Nothing in this section shall preclude the Administrator from establishing, as against the original lender, defenses based on fraud or material misrepresentation. The Administrator shall not, by reason of anything contained in this section, be barred from establishing, by regulations in force. at the date of such issuance or disbursement, whichever is the earlier, partial defenses to the amount payable on the guaranty or insur

ance.

§ 1822. Repealed 2

§ 1823. Direct loan revolving fund

(a) For the purposes of section 1811 of this title, the revolving fund heretofore established by section 513 of the Servicemen's Readjust

1 Sec. 7(26) of the Veterans Housing Amendments of 1976, Public Law 94-324, 90 Stat. 720, approved June 30, 1976, amended section 1820 (e) clauses (1) and (2) by striking "he", "him" and "his" and inserting in lieu thereof "the Administrator", the Administrator", and "the Administrator's".

2 Sec. 7(a) of the Veterans Housing Act of 1974, Public Law 93-569, 88 Stat. 1863, approved December 31, 1974, repealed section 1822.

ment Act of 1944 is continued in effect. For the purposes of further augmenting the revolving fund, the Secretary of the Treasury is authorized and directed to advance to the Administrator from time to time after December 31, 1958, and until June 30, 1961, such sums (not in excess of $150,000,000 in any one fiscal year, including prior advancements in fiscal year 1959) as the Administrator may request, except that the aggregate so advanced in any one quarter annual period shall not exceed the sum of $50,000,000, less that amount which has been returned to the revolving fund during the preceding quarter annual period from the sale of loans pursuant to section 1811(g) of this title. În addition to the sums authorized in this subsection the Secretary of the Treasury shall also advance to the Administrator such additional sums, not in excess of $100,000,000, as the Administrator may request. and the sums so advanced shall be made available without regard to any limitation contained in this subsection with respect to the amount which may be advanced in any one quarter annual period. The Secretary of the Treasury shall also advance to the Administrator from. time to time such additional sums as the Administrator may request, not in excess of $100,000,000 to be immediately available, plus an additional amount not in excess of $400,000,000 after June 30, 1961, plus $200,000,000 after June 30, 1962, plus $150,000,000 after June 30, 1963, plus $150,000,000 after June 30, 1964, plus $100,000,000 after June 30, 1965, plus $100,000,000 after June 30, 1966. Any such authorized advance which is not requested by the Administrator in the fiscal year in which the advance may be made shall be made thereafter when requested by the Administrator, except that no such request or advance may be made after June 30, 1967. Such authorized advances are not subject to the quarter annual limitation in the second sentence of this subsection, but the amount authorized to be advanced in any fiscal year after June 30, 1962, shall be reduced only by the amount which has been returned to the revolving fund during the preceding fiscal year from the sale of loans pursuant to section 1811(g) of this title. In addition the Secretary is authorized and directed to make available to the Administrator for this purpose from time to time as the Administrator1 may request the amount of any funds which may have been deposited to the credit of miscellaneous receipts under this subsection or subsection (c) of this section.2

(b) On advances to such revolving fund by the Secretary of the Treasury, less those amounts deposited in miscellaneous receipts under subsections (a) and (c) the Administrator shall pay semiannually to the Treasurer of the United States interest at the rate or rates determined by the Secretary of the Treasury, taking into consideration the current average rate on outstanding marketable obligations of the United States as of the last day of the month preceding the advance. The Administrator shall not be required to pay interest on transfers made purusant to the Act of February 13, 1962 (76 Stat. 8), from the capital of the "direct loans to veterans and reserves revolving fund" to the "loan guaranty revolving fund" and adjustments shall be made for payments of interest on such transfers before the date of enactment of this sentence.

1 Sec. 7(27) of the Veterans Housing Amendments of 1976, Public Law 94-324. 90 Stat. 720, approved June 30, 1976, amended section 1823 (a) and (c) by striking "he" and "his" wherever they appear and inserting in lieu thereof "the Administrator" and "the Administrator's".

2 Sec. 6(1) of the Veterans Housing Amendments of 1976, Public Law 94-324, 90 Stat. 720, approved June 30, 1976, deleted the last sentence of paragraph 1823(a).

(c) In order to make advances to such revolving fund, as authorized by law to effectuate the purposes and functions authorized in section 1811 of this title, the Secretary of the Treasury may use, as a public debt transaction, the proceeds of the sale of any securities issued under the Second Liberty Bond Act, and the purposes for which securities may be issued under the Second Liberty Bond Act include such purposes. Such sums, together with all receipts under this section and section 1811 of this title, shall be deposited with the Treasurer of the United States, in a special deposit account, and shall be available, respectively, for disbursement for the purposes of section 1811 of this title. Except as otherwise provided in subsection (a) of this section, the Administrator shall from time to time cause to be deposited into the Treasury of the United States, to the credit of miscellaneous receipts, such of the funds in such account as in the Administrator's 1 judgment are not needed for the purposes for which they were provided, including the proceeds of the sale of any loans.2

§ 1824. Loan guaranty revolving fund

(a) There is hereby established in the Treasury of the United States a revolving fund known as the Veterans' Administration Loan Guaranty Revolving Fund (hereinafter called the Fund).

(b) The Fund shall be available to the Administrator when so provided in appropriation Acts and within such limitations as may be included in such Acts, without fiscal year limitation, for all loan guaranty and insurance operations under this chapter, except administrative expenses.

(c) There shall be deposited in the Fund (1) by transfer from current and future appropriations for readjustment benefits such amounts as may be necessary to supplement the Fund in order to meet the requirements of the Fund, and (2) all amounts now held or hereafter received by the Administrator incident to loan guaranty and insurance operations under this chapter, including but not limited to all collections of principal and interest and the proceeds from the use of property held or the sale of property disposed of.

(d) The Administrator shall determine annually whether there has developed in such Fund a surplus which, in the Administrator's 3 judgment, is more than necessary to meet the needs of the Fund, and such surplus, if any, shall immediately be transferred into the general fund receipts of the Treasury.

§ 1825. Waiver of discharge requirements for hospitalized persons

The benefits of this chapter may be afforded to any person who is hospitalized pending final discharge from active duty, if said person * is qualified therefor in every respect except for discharge.

1 Sec. 7(27) of the Veterans Housing Amendments of 1976, Public Law 94-324, 90 Stat. 720, approved June 30, 1976, amended section 1823 (a) and (c) by striking "he" and "his" wherever they appear and inserting in lieu thereof "the Administrator" and "the Administrator's".

2 Sec. 6(2) of the Veterans Housing Amendments of 1976, Public Law 94-324. 90 Stat. 720. approved June 30, 1976, amended section 1823 (c) to read as set forth in the text. 3 Sec. 7(28) of the Veterans Housing Amendments of 1976. Public Law 94-324, 90 Stat. 720, approved June 30, 1976, amended section 1824 (d) by striking "his" and inserting in lieu thereof "the Administrator's".

4 Sec. 7(29) of the Veterans Housing Amendments of 1976, Public Law 94-324, 90 Stat. 720, approved June 30, 1976, amended section 1825 by striking "he" and inserting in lieu thereof "said person".

1

§ 1826. Withholding of payments, benefits, etc.

(a) The Administrator shall not, unless the Administrator1 first obtains the consent in writing of an individual, set off against, or otherwise withhold from, such individual any benefits payable to such individual under any law administered by the Veterans' Administration because of liability allegedly arising out of any loan made to, assumed by, or guaranteed or insured on account of, such individual under this chapter.

1

(b) No officer, employee, department, or agency of the United States shall set off against, or otherwise withhold from, any veteran or the surviving spouse of any veteran any payments (other than benefit payments under any law administered by the Veterans' Administration) which such veteran or surviving spouse 1 would otherwise be entitled to receive because of any liability to the Administrator allegedly arising out of any loan made to, assumed by, or guaranteed or insured on account of, such veteran or surviving spouse under this chapter, unless (1) there is first received the consent in writing of such veteran or surviving spouse,1 as the case may be, or (2) such liability and the amount thereof was determined by a court of competent jurisdiction in a proceeding to which such veteran or surviving spouse was a party. § 1827. Expenditures to correct or compensate for structural defects in mortgaged homes

1

1

(a) The Administrator is authorized, with respect to any property improved by a one- to four-family dwelling inspected during construction by the Veterans' Administration or the Federal Housing Administration which the Administrator 2 finds to have structural defects seriously affecting the livability of the property, to make expenditures for (1) correcting such defects, (2) paying the claims of the owner of the property arising from such defects, or (3) acquiring title to the property; except that such authority of the Administrator shall exist only (A) if the owner requests assistance under this section not later than four years (or such shorter time as the Administrator may prescribe) after the mortgage loan was made, guaranteed, or insured, and (B) if the property is encumbered by a mortgage which is made, guaranteed, or insured under this chapter after the date of enactment of this section.

(b) The Administrator shall by regulation prescribe the terms and conditions under which expenditures and payments may be made under the provisions of this section, and the Administrator's decisions regarding such expenditures or payments, and the terms and conditions under which the same are approved or disapproved, shall be final and conclusive, and shall not be subject to judicial review.

(c) The Administrator is authorized to make expenditures for the purposes of this section from the funds established pursuant to sections 1823 and 1824 of this title, as applicable.

1 Sec. 7(30) of the Veterans Housing Amendments of 1976, Public Law 94-324, 90 Stat. 720 approved June 30, 1976, amended section 1826 (a) and (b) by striking "he" and inserting in lien thereof "the Administrator" and by striking "widow" wherever it appeared and inserting in lieu thereof "surviving spouse".

2 Sec. 7(31) of the Veterans Housing Amendments of 1976, Public Law 94-324. 90 Stat. 720, approved June 30, 1976, amended section 1827 (a) and (b) by striking "he" and "his" wherever they appear and inserting in lieu thereof "the Administrator" and "the Administrator's".

EXCERPT FROM TAX REDUCTION ACT OF 1975

[Public Law 94-12, 89 Stat. 26]

Sec. 208. Credit for purchase of new principal residence

(a) ALLOWANCE OF CREDIT.-Subpart A of part IV of subchapter A of chapter 1 (relating to credits allowed) is amended by redesignating section 44 as section 45 and by inserting after section 43 the following new section:

"Sec. 44. Purchase of new principal residence

"(a) GENERAL RULE.-In the case of an individual there is allowed, as a credit against the tax imposed by this chapter for the taxable year, an amount equal to 5 percent of the purchase price of a new principal residence purchased or constructed by the taxpayer.

"(b) LIMITATIONS.

"(1) MAXIMUM CREDIT.-The credit allowed under subsection (a) may not exceed $2,000.

"(2) LIMITATION TO ONE RESIDENCE.--The credit under this section shall be allowed with respect to only one residence of the taxpayer.

"(3) MARRIED INDIVIDUALS.—In the case of a husband and wife who file a joint return under section 6013, the amount specified under paragraph (1) shall apply to the joint return. In the case of a married individual filing a separate return, paragraph (1) shall be applied by substituting ‘$1,000' for '$2,000'.

"(4) CERTAIN OTHER TAXPAYERS.-In the case of individuals to whom paragraph (3) does not apply who together purchase the same new principal residence for use as their principal residence, the amount of the credit allowed under subsection (a) shall be allocated among such individuals as prescribed by the Secretary or his delegate, but the sum of the amounts allowed to such individuals shall not exceed $2,000 with respect to that residence.

"(5) APPLICATION WITH OTHER CREDITS.-The credit allowed by subsection (a) shall not exceed the amount of the tax imposed by this chapter for the taxable year, reduced by the sum of the credits allowable under sections 33, 37, 38, 40, 41, and 42. "(c) DEFINITIONS.--For purposes of this section—

"(1) NEW PRINCIPAL RESIDENCE.-The term 'new principal residence,' means a principal residence (within the meaning of section 1034), the original use of which commences with the taxpayer, and includes, without being limited to, a single family structure, a residential unit in a condominium or cooperative housing project, and a mobile home.

"(2) PURCHASE PRICE.-The term 'purchase price' means the adjusted basis of the new principal residence on the date of the acquisition thereof.

(3) PURCHASE.-The term 'purchase' means any acquisition of property, but only if

"(A) the property is not acquired from a person whose relationship to the person acquiring it would result in the