source:
  type: regulation
  id: va-38usc-3706
  authority: VA Home Loan Guaranty (38 U.S.C. ch. 37) § 3706 — Escrow of deposits and downpayments
  description: 'VA Home Loan Guaranty (38 U.S.C. ch. 37), §3706 Escrow of deposits and downpayments. Captured section-complete
    from Cornell LII (verbatim).

    '
obligations:
- id: va-38usc-3706-a
  canonical_id: va-38usc-3706-a
  section: 38 U.S.C. §3706(a)
  description: 'Escrow of deposits and downpayments — (a): (a) Any deposit or downpayment made by an eligible veteran
    in connection with the purchase of proposed or newly constructed and previously unoccupied residential property
    in a project on which the Secretary has issued a Certificate of Reasonable Value, which purchase is to be financed
    with a loan gu…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  - usc-statute
  primary_source:
    tier: 1
    authority: VA Home Loan Guaranty (38 U.S.C. ch. 37) § 3706
    source_class: usc-statute-lii
    source_url: https://www.law.cornell.edu/uscode/text/38/3706
    snapshot_id: 0bef5766b5ea2745
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:11df74c3bfa071deb9189b95facd62a5fd95a511b443a2a5aa7fdc767a159bee
    paragraph_quote: (a) Any deposit or downpayment made by an eligible veteran in connection with the purchase
      of proposed or newly constructed and previously unoccupied residential property in a project on which the
      Secretary 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 the seller’s 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
      3704(b) of this title .
    drafter_attestation: Verbatim slice of 38 U.S.C. §3706 subsection (a) from Cornell LII snapshot 0bef5766b5ea2745;
      body isolated between nav and Editorial/Statutory Notes; substring-verified.
  judgment: false
- id: va-38usc-3706-b
  canonical_id: va-38usc-3706-b
  section: 38 U.S.C. §3706(b)
  description: 'Escrow of deposits and downpayments — (b): (b) If an eligible veteran contracts for the construction
    of a property in a project on which the Secretary 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 …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  - usc-statute
  primary_source:
    tier: 1
    authority: VA Home Loan Guaranty (38 U.S.C. ch. 37) § 3706
    source_class: usc-statute-lii
    source_url: https://www.law.cornell.edu/uscode/text/38/3706
    snapshot_id: 0bef5766b5ea2745
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:11df74c3bfa071deb9189b95facd62a5fd95a511b443a2a5aa7fdc767a159bee
    paragraph_quote: (b) If an eligible veteran contracts for the construction of a property in a project on which
      the Secretary 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 3704(b) of this title 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. (Added Pub. L.
      86–665, § 6(a) , July 14, 1960 , 74 Stat. 532 , § 1806; amended Pub. L. 94–324, § 7(10) , June 30, 1976 ,
      90 Stat. 721 ; Pub. L. 101–237, title III, § 313(b)(1) , Dec. 18, 1989 , 103 Stat. 2077 ; renumbered § 3706
      and amended Pub. L. 102–83, § 5(a) , (c)(1), Aug. 6, 1991 , 105 Stat. 406 ; Pub. L. 103–446, title XII, §
      1201(e)(13) , Nov. 2, 1994 , 108 Stat. 4685 .)
    drafter_attestation: Verbatim slice of 38 U.S.C. §3706 subsection (b) from Cornell LII snapshot 0bef5766b5ea2745;
      body isolated between nav and Editorial/Statutory Notes; substring-verified.
  judgment: false
