“(2) Notwithstanding section 2410 of title 28, a non-judicial sale of real property to satisfy a loan guaranteed under this chapter shall discharge the property from a partial claim interest held by the Secretary, provided that the holder of the guaranteed loan conducts the non-judicial sale and distributes the sale proceeds, if any, in accordance with the State or local law where such property is situated.”
The rewritten paragraph (2) of section 3737(e) of title 38 sets the condition on which the sale clears the claim: the holder has to conduct the sale and share out any proceeds under the law of the state or place where the property sits.
What the document actually says
“(2) Notwithstanding section 2410 of title 28, a non-judicial sale of real property to satisfy a loan guaranteed under this chapter shall discharge the property from a partial claim interest held by the Secretary, provided that the holder of the guaranteed loan conducts the non-judicial sale and distributes the sale proceeds, if any, in accordance with the State or local law where such property is situated.”
That sentence, in plain words
A sale held outside court clears the claim from the property. The holder must run the sale under local law.
What this is about
A partial claim leaves a debt tied to the house. When the house is sold this way, that tie is cut.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026, Public Law 119-37, sec. 7307, 139 Stat. 651 (2025). https://www.govinfo.gov/content/pkg/PLAW-119publ37/html/PLAW-119publ37.htm
This page
“A non-judicial sale discharges the property from the partial claim interest,” Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026, section 7307, Sec. 7307. Read the Mandate, https://readthemandate.org/continuing-appropriations-agriculture-legislative/proposal/sec7307-non-judicial-sale-discharges-the-claim/ (retrieved October 10, 2026).
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