Authority of the Secretary of Veterans Affairs to Take Certain Actions in the Case of a Default on a Home Loan Guaranteed by the Secretary
Section 2 · Sec. 2 ·
What this chapter is about
This part changes an old law about home loans. The VA can pay a lender to keep a veteran in a home. The VA then holds a claim on the house. The VA must set an order of help steps. Lenders must offer those steps first.
The document says “is amended”Who acts: CongressHow: statuteSec. 2 in the PDF
What the document says
“Section 3732 of title 38, United States Code, is amended--”
The section operates by amendment. Everything recorded from subsection (a) of this section is text this Act puts into section 3732 of title 38, United States Code, the provision on what the Secretary of Veterans Affairs may do when a guaranteed housing loan is in default.
What the document actually says
“Section 3732 of title 38, United States Code, is amended--”
That sentence, in plain words
This law changes an old law. The old law is about home loans for veterans.
What this is about
The old law says what the VA can do when a veteran falls behind. The new words go inside it.
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.
The document says “can”Who acts: Secretary of Veterans AffairsHow: statuteSec. 2 in the PDF
What the document says
“The Secretary may, under terms and conditions determined by the Secretary-- ``(i) pay the holder of a loan guaranteed under this chapter an amount necessary to avoid the foreclosure of such loan;”
The inserted subparagraph lets the Secretary of Veterans Affairs pay the holder of a guaranteed loan the amount needed to avoid a foreclosure, on terms the Secretary sets. It replaces subparagraph (A) of section 3732(a)(2) of title 38, United States Code.
What the document actually says
“The Secretary may, under terms and conditions determined by the Secretary-- ``(i) pay the holder of a loan guaranteed under this chapter an amount necessary to avoid the foreclosure of such loan;”
That sentence, in plain words
The VA can pay the lender. It pays what it takes to stop the home from being taken.
What this is about
A lender can take back a home when payments stop. This lets the VA step in with money. The VA picks the terms.
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.
The document says “can”Who acts: Secretary of Veterans AffairsHow: statuteSec. 2 in the PDF
What the document says
“``(ii) require the holder of the loan and the veteran obligated on the loan to execute all documents necessary to ensure the Secretary obtains a secured interest in the property covered by the loan; and ``(iii) require the holder of the loan to take any actions necessary to carry out this paragraph, including preparing, executing, transmitting, receiving, and recording documents, and requiring the holder of the loan to place the loan in forbearance.”
The same inserted subparagraph of section 3732(a)(2) of title 38, United States Code, lets the Secretary of Veterans Affairs require the holder and the veteran to sign the documents that give the Secretary a secured interest in the property, and require the holder to do the paperwork and to place the loan in forbearance.
What the document actually says
“``(ii) require the holder of the loan and the veteran obligated on the loan to execute all documents necessary to ensure the Secretary obtains a secured interest in the property covered by the loan; and ``(iii) require the holder of the loan to take any actions necessary to carry out this paragraph, including preparing, executing, transmitting, receiving, and recording documents, and requiring the holder of the loan to place the loan in forbearance.”
That sentence, in plain words
The VA can make the lender and the veteran sign papers. The papers give the VA a claim on the house. The VA can also make the lender pause the payments.
What this is about
A claim on the house means the VA gets paid back if the house is sold. A pause means payments stop for a time.
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.
The document says “may not”Who acts: Secretary of Veterans AffairsHow: statuteSec. 2 in the PDF
What the document says
“Any decision by the Secretary under this paragraph is final and is not subject to judicial review.”
An inserted subparagraph of section 3732(a)(2) of title 38, United States Code, makes the Secretary of Veterans Affairs the last word on a decision under that paragraph and puts it outside judicial review.
What the document actually says
“Any decision by the Secretary under this paragraph is final and is not subject to judicial review.”
That sentence, in plain words
What the VA decides here is the last word. A court cannot look at it.
What this is about
People can often ask a judge to check a choice the government makes. This rule takes that away for these choices.
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.
The document says “shall not”Who acts: Secretary of Veterans AffairsHow: statuteSec. 2 in the PDF
What the document says
“For purposes of section 511 of this title, any decision under this paragraph shall not be treated as a decision under a law that affects the provision of benefits.”
The same inserted subparagraph provides that a decision under section 3732(a)(2) of title 38, United States Code, is not a decision under a law affecting the provision of benefits for the purposes of section 511 of that title. Section 511 is not indexed here.
What the document actually says
“For purposes of section 511 of this title, any decision under this paragraph shall not be treated as a decision under a law that affects the provision of benefits.”
That sentence, in plain words
One older rule does not count these choices as benefit choices.
What this is about
The older rule sets up how the VA handles benefit claims. These loan choices sit outside it.
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.
The document says “can”Who acts: Secretary of Veterans AffairsHow: statuteSec. 2 in the PDF
What the document says
“The Secretary may establish standards for processing payments under this paragraph based on a certification by a holder of a loan guaranteed under this chapter that the holder has complied with all applicable requirements established by the Secretary.”
An inserted subparagraph of section 3732(a)(2) of title 38, United States Code, lets the Secretary of Veterans Affairs set standards under which a payment is processed on the holder's own certification that it met the Secretary's requirements.
What the document actually says
“The Secretary may establish standards for processing payments under this paragraph based on a certification by a holder of a loan guaranteed under this chapter that the holder has complied with all applicable requirements established by the Secretary.”
That sentence, in plain words
The lender signs a promise. It says it followed the rules. Then the VA can pay.
What this is about
The VA does not have to check first. The lender signs a promise. Then the money can go out.
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.
The document says “shall”Who acts: Secretary of Veterans AffairsHow: statuteSec. 2 in the PDF
What the document says
“The Secretary shall carry out, on a random-sampling basis, post-payment audits to ensure compliance with all requirements described in clause (i).”
The same inserted subparagraph requires the Secretary of Veterans Affairs to run audits after payment, on a random sample, to check that the certifications were accurate.
What the document actually says
“The Secretary shall carry out, on a random-sampling basis, post-payment audits to ensure compliance with all requirements described in clause (i).”
That sentence, in plain words
The VA must check some payments later. It picks them at random.
What this is about
The check comes after the money goes out. Not every payment gets checked. The VA picks some by chance.
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.
The document says “shall”Who acts: Secretary of Veterans AffairsHow: statuteSec. 2 in the PDF
What the document says
“The Secretary shall prescribe loss mitigation procedures, including a mandatory sequence in which the holder of a loan guaranteed under this chapter shall offer loss mitigation options (including an option to enter into a partial claim agreement under the VA Home Loan Program Reform Act) to a veteran, to help prevent the foreclosure of such loan.”
A new subsection (d) added to section 3732 of title 38, United States Code, requires the Secretary of Veterans Affairs to write loss mitigation procedures and to fix the order in which a holder must offer the options to a veteran. The partial claim agreement created by section 3 of this Act is named as one of them.
What the document actually says
“The Secretary shall prescribe loss mitigation procedures, including a mandatory sequence in which the holder of a loan guaranteed under this chapter shall offer loss mitigation options (including an option to enter into a partial claim agreement under the VA Home Loan Program Reform Act) to a veteran, to help prevent the foreclosure of such loan.”
That sentence, in plain words
The VA must write out ways to help a veteran keep a home. It must set the order lenders offer them in.
What this is about
A lender cannot pick and choose the order. One of the steps is the new deal set up by part 3 of this law.
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.
The document says “may not”Who acts: Secretary of Veterans AffairsHow: statuteSec. 2 in the PDF
What the document says
“The Secretary may not purchase an entire such loan until the veteran has completed such sequence.”
The same new subsection (d) of section 3732 of title 38, United States Code, bars the Secretary of Veterans Affairs from buying a guaranteed loan outright before the veteran has been through the required sequence of options.
What the document actually says
“The Secretary may not purchase an entire such loan until the veteran has completed such sequence.”
That sentence, in plain words
The VA cannot buy the whole loan yet. It must wait until the veteran has been through the steps.
What this is about
Buying the whole loan makes the VA the lender. That comes last, not first.
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.
The document says “is amended”Who acts: CongressHow: statuteSec. 2 in the PDF
What the document says
“Section 3720 of such title is amended--”
The second half of the section operates by amendment as well. It opens subsection (a) with a cross reference to the new subsection, moves subsections (f) through (h) up a letter, and adds a new subsection (h). Section 3720 of title 38, United States Code, is not indexed here.
What the document actually says
“Section 3720 of such title is amended--”
That sentence, in plain words
This law also changes a second old law. It is the one next to it.
What this is about
The second law lists other powers the VA has over these loans. The new words go inside it too.
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.
The document says “may not”Who acts: Secretary of Veterans AffairsHow: statuteSec. 2 in the PDF
What the document says
“The Secretary may not take any action under paragraph (2), (3), (4), or (5) of subsection (a) with respect to a loan guaranteed under this chapter before the completion of the sequence of mitigation options offered to the veteran to whom the loan is made under section 3732(d) of this title.”
The new subsection (h) of section 3720 of title 38, United States Code, holds back four of the powers listed in subsection (a) of that section until the veteran has completed the sequence of options required by the new section 3732(d). Section 3720 is not indexed here, so nothing recorded says what those four powers are.
What the document actually says
“The Secretary may not take any action under paragraph (2), (3), (4), or (5) of subsection (a) with respect to a loan guaranteed under this chapter before the completion of the sequence of mitigation options offered to the veteran to whom the loan is made under section 3732(d) of this title.”
That sentence, in plain words
The VA cannot use four of its other powers yet. It must wait until the veteran has been through the steps.
What this is about
The other powers sit in the second old law. That law is not indexed here, so this record does not say what they are.
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.
VA Home Loan Program Reform Act, Public Law 119-31, sec. 2, 139 Stat. 475 (2025). https://www.govinfo.gov/content/pkg/PLAW-119publ31/html/PLAW-119publ31.htm
This page
“Authority of the Secretary of Veterans Affairs to Take Certain Actions in the Case of a Default on a Home Loan Guaranteed by the Secretary,” VA Home Loan Program Reform Act, section 2. Read the Mandate, https://readthemandate.org/va-home-loan-program-reform-act/section-2/ (retrieved August 26, 2026).
Cite the document when the claim is about what the document says. Cite this page when the indexing, the wording or the record of what has happened is what is being relied on.
What This Page Covers, and What It Leaves Out
Each thing the section does: the amendment it makes to section 3732 of title 38, United States Code, the new authority to pay the holder of a guaranteed loan, the documents the holder and the veteran can be made to sign, the bar on review of the Secretary's decisions, the certification standards and the audits, the new subsection on loss mitigation, and the amendment to section 3720 that holds back the Secretary's other powers.
Purely mechanical amendments. Striking a word and inserting another is recorded only where it changes what somebody must do, so the substitution of loan and housing loan for obligation, the change of a dash to a colon, and the correction of a misspelling of forbearance are not recorded as changes of their own.
The section works by amending sections 3732 and 3720 of title 38, United States Code, and neither statute is indexed here, so nothing recorded says what either provided before this Act or reads as now. Section 511 of title 38 is cited and not indexed.
