Purchase or construction of homes

§ 1810. Purchase or construction of homes (a) Any loan to a veteran, if made pursuant to the provisions of this chapter, is automatically guaranteed if such loan is for one or more of the following purposes: (1) To purchase or construct a dwelling to be owned and occupied by him as a home. (2) To purchase a farm on which there is a farm residence to be owned and occupied by him as his home. (3) To construct on land owned by him a farm residence to be occupied by him as his home. (4) To repair, alter, or improve a farm residence or other dwelling owned by him and occupied by him as his home. If there is an indebtedness which is secured by a lien against land owned by the veteran, the proceeds of a loan guaranteed under this section or made under section 1811 of this title for construction of a dwelling or farm residence on such land may be used also to liquidate such lien, but only if the reasonable value of the land is equal to or greater than the amount of the lien. (b) No loan may be guaranteed under this section or made under section 1811 of this title unless— (1) the proceeds of such loan will be used to pay for the property purchased, constructed, or improved; (2) the contemplated terms of payment required in any mortgage to be given in part payment of the purchase price or the construction cost bear a proper relation to the veteran’s present and anticipated income and expenses; (3) the veteran is a satisfactory credit risk; (4) the nature and condition of the property is such as to be suitable for dwelling purposes; 72 Stat. 1208 (5) the price paid or to be paid by the veteran for such property, or for the cost of construction, repairs, or alterations, does not exceed the reasonable value thereof as determined by the Administrator; and (6) if the loan is for repair, alteration, or improvement of property, such repair, alteration, or improvement substantially protects or improves the basic livability or utility of such property. (c) The amount of guaranty entitlement available to a veteran under this section shall not be more than $7,500 less such entitlement as may have been used previously under this section and other sections of this chapter.