(a) If a veteran chooses to accept VA's assistance (i.e., a partial claim payment to the servicer, on the veteran's behalf), the veteran, and all co-borrowers on the guaranteed loan, must execute a note and security instrument in favor of the “Secretary of Veterans Affairs, an Officer of the United States”. The name of the incumbent Secretary should not be included unless State law requires naming a real person.
(b) Specific terms of the note and security instrument shall include the following:
(1) The amount to be repaid to the Secretary, by the veteran, is the amount calculated under § 36.4805(e);
(2) Repayment in full is required immediately upon -
(i) The veteran's transfer of title to the property; or
(ii) The refinancing or payment in full otherwise of the guaranteed loan with which the partial claim payment is associated.
(3) A veteran may make payments for the subordinate loan, in whole or in part, without charge or penalty. If the veteran makes a partial prepayment, there will be no changes in the due date unless VA agrees in writing to those changes.
(The Office of Management and Budget has approved the information collection requirements in this section under control number 2900-0889)
[86 FR 28708, May 28, 2021, as amended at 86 FR 46983, Aug. 23, 2021]