Page:United States Statutes at Large Volume 74.djvu/572

 532

PUBLIC LAW 86-665-JULY 14, 1960

[74 S T A T.

SEC. 4. (a) Section 1823(a) of title 38, United States Code, is amended by striking out "1960" each place it appears and inserting in lieu thereof "1962". (b) Section 1823(c) of title 38, United States Code, is amended by striking out "1961" and inserting in lieu thereof "1963". SEC. 5. Section 1804(c) of title 38, United States Code, is amended by adding the following at the end thereof: "Notwithstanding the foregoing requirements of this subsection, the provisions for certification by the veteran at the time he applies for the loan and at the time the loan is closed shall be considered to be satisfied if the Administrator finds that (1) in the case of a loan for repair, alteration, or improvement the veteran in fact did occupy the property at such times, or (2) in the case of a loan for construction or purchase the veteran intended to occupy the property as his home at such times and he did in fact so occupy it when, or within a reasonable time after, the loan was closed." SEC. 6. (a) Chapter 37 of title 38, United States Code, is amended by adding after section 1805 thereof a new section as follows: "§ 1806. Escrow of deposits and downpayments " (a) Any deposit or downpayment made by ^ eligible veteran in connection with the purchase of proposed or newly constructed and previously unoccupied residential property in a project on which the Administrator has issued a Certificate of Reasonable Value, which purchase is to be financed with a loan guaranteed, insured, or made under the provisions of this chapter, shall be deposited forthwith by the seller, or the agent of the seller, receiving such deposit or payment, in a trust account to safeguard such deposit or payment from the claims of creditors of the seller. The failure of the seller or his agent to create such trust account and to maintain it until the deposit or payment has been disbursed for the benefit of the veteran purchaser at settlement or, if the transaction does not materialize, is otherwise disposed of in accordance with the terms of the contract, may constitute an unfair marketing practice within the meaning of section 1804(b) of this chapter. "(b) If an eligible veteran contracts for the construction of a property in a project on which the Administrator has issued a Certificate of Reasonable Value and such construction is to be financed with the assistance of a construction loan to be guaranteed, insured, or made under the provisions of this chapter, it may be considered an unfair marketing practice under section 1804(b) of this chapter if any deposit or downpayment of the veteran is not maintained in a special trust account by the recipient until it is either (1) applied on behalf of the veteran to the cost of the land or to the cost of construction or (2), if the transaction does not materialize, is otherwise disposed of in accordance with the terms of the contract." (b) The analysis of chapter 37 of title 38, United States Code, is amended by adding after "1805. Warranties."

the following: "1806. Escrow of deposits and downpayments."

SEC. 7. (a) Chapter 37 of title 38, United States Code, is amended by renumbering section 1824 as section 1825 and inserting a new section 1824 to read as follows:

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