An Act to amend the Servicemen's Readjustment Act of 1944 to extend the authority of the Administrator of ""Veterans' Affairs to make direct loans, and to authorize the Administrator to make additional types of direct loans thereunder, and for other purposes
PL 84-88 (S.654), enacted 06/21/1955

fi9 S T A T . 1 
PUBLIC LAW 88-JUNE 21, 1955 
167 
works in the Lighthouse Service, and for other purposes", approved 
June 20, 1918, as amended (33 U. S. C, sec. 763), is amended by 
striking out "who shall have reached the age of sixty-five years, after 
having been thirty years in the active service of the Government," 
and inserting in lieu thereof the following: "who (1) shall have 
reached the age of sixty years, after having been thirty years in the 
active service of the Government, or (2) shall have reached the age 
of sixty-two years, after having been twenty-five years in the active 
service of the Government,". 
SP:C. 2. This Act shall take effect on the first day of the second month 
beginning after tlie date of enactment of this Act. 
Approved June 21, 1955. 
40 Stat. 608. 
Effective date. 
Public Law 
CHAPTER 171 
AN ACT 
To amend the Servicemen's Readjustment Act of 1944 to extend the authority 
of the Administrator of "Veterans' Affairs to make direct loans, and to authorize 
the Administrator to make additional types of direct loans thereunder, and for 
other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of Arnerica in Congress assembled, That subsection (a) 
of section 512 of the Servicemen's Readjustment Act of 1944 (38 
U. S. C, sec. 6941) is hereby amended to read as follows: 
"SEC. 512. (a) (1) Upon application by a veteran eligible for the 
benefits of this title, the Administrator is authorized and directed to 
make, or enter into a commitment to make, the veteran a loan for any 
of the following purposes: 
"(A) To purchase or construct a dwelling to be owned and 
occupied by him as a home; 
"(B) To purchase a farm on which there is a farm residence to 
be occupied by the veteran as his home; 
"(C) To construct on land owned by the veteran a farm 
residence to be occupied by him as his home; or 
"(D) To repair, alter, or improve a farm residence or other 
dwelling owned by the veteran and occupied by him as his home; 
if the Administrator finds that in the area in which the dwelling, farm, 
or farm residence is located or is to be constructed, private capital is 
not available for the financing of the purchase or construction of dwell-
ings, the purchase of farms with farm residences, or the construction, 
repair, alteration, or improvement of farm residences or other dwell-
ings, as the case may be, by veterans under this title. 
In case there 
is an indebtedness which is secured by a lien against land owned by 
the veteran, the proceeds of a loan made under this section for the 
construction of a dwelling or farm residence on such land may be 
expended also to liquidate such lien, but only if the reasonable value 
of the land is equal to or in excess of the amount of the lien. 
" (2) No loan shall be made under this section to a veteran unless he 
shows to the satisfaction of the Administrator— 
"(A) that he is a satisfactory credit risk; 
"(B) that the payments to be required under the proposed loan 
bear a proper relation to the veteran's present and anticipated 
income and expenses; 
"(C) that he is unable to obtain from private lending sources 
in such area at an interest rate not in excess of the rate authorized 
June 21. 1955 
[S. 6^4] 
Veterans' loans. 
64 Stat. 75. 
Purposes. 
Conditions. 
168 
PUBLIC LAW 88-JUNE 21, 1955 
[69 ST A T , 
50 Stat. 5 22; 63 
Stat. 413. 
7 use 1000; 42 
use 144 1 note. 
64 Stat. 76. 
38 use 6947 (b). 
Prior e o m m i t -
ments. 
Repayment. 
Applicability. 
Limitation. 
68 Stat. 757. 
38 u s e 694/. 
68 Stat. 757. 
38 use 694m(a). 
68 Stat. 757. 
38 use 694m (c). 
66 Stat. 64; 68 
Stat. 757. 
38 use 694m(d), 
Effective date. 
for ojiiaranteed liome loans a loan for such purpose for which he is 
qualified under section 501 of this title; and 
"(D) that he is unable to obtain a loan for such purpose from 
the Secretary of Agriculture under the Bankhead-Jones Farm 
Tenant Act, as amended, or under the Plousing Act of 1949." 
SEC. 2. (a) Subsection (b) of such section is hereby amended by 
striking out clauses (A) and (B) and inserting in lieu thereof the 
following: 
"(A) the original principal amount of any such loan shall not 
exceed an amount w^hich bears the same ratio to $10,000 as the 
amount of guaranty to which the veteran is entitled under section 
501 at the time the loan is made bears to $7,500; 
"(B) the guaranty entitlement of the veteran shall be charged 
with an amount which bears the same ratio to $7,500 as the amount 
of the loan bears to $10,000;". 
(b) The amendments made by this section shall not apply with 
respect to loans or commitments made under such section 512 prior to 
the date of enactment of this section. 
SEC. 3. Subsection (d) of such section is hereby amended by striking 
out "section 501 (b)" and inserting in lieu thereof "section 501". 
SEC. 4. (a) Subsection (e) of such section is hereby amended to read 
as follows: 
"(e) Loans made under this section shall be repaid in monthly 
installments; except that in the case of loans made for any of the 
purposes described in clause (B), (C), or (D) of paragraph (1) of 
subsection (a), the Administrator may provide that such loans shall 
be repaid in quarterly, semianmial, or annual installments." 
(b) The amendment made by this section shall apply only with 
respect to direct loans held by the Administrator on the date of enact-
ment of this Act and direct loans made by the Administrator on or 
after such date. 
SEC. 5. Such section is hereby further amended by adding at the end 
thereof the following: 
"(f) No veteran may obtain loans under this section aggregating 
more than $10,000." 
SEC. 6. (a) Clause (C) of subsection (b) of such section is hereby 
amended by striking out "June 30, 1955" and inserting in lieu thereof 
"elune 30, 1957". 
(b) Subsection (a) of section 513 of such Act is hereby amended by 
striking out "June 30, 1955" and inserting in lieu thereof "June 30, 
1957". 
(c) Subsection (c) of such section 513 is hereby amended by striking 
out "June 30,1956" and inserting in lieu thereof "June 30,1958". 
(d) The first sentence of subsection (d) of such section 513 is hereby 
amended by striking out all beginning with "June 30,1955" and insert-
ing in lieu thereof "June 30, 1957, such additional sums (not in excess 
of $150,000,000 in any one fiscal year) as the Administrator may 
request, except that the aggregate so advanced in any one quarter 
annual period shall not exceed the sum of $50,000,000 less that amount 
which had been returned to the revolving fund during the preceding 
quarter annual period from the sale of loans pursuant to section 512 (d) 
of this title.". 
(e) The amendments made by this section shall take effect as of 
June 30, 1955. 
Approved June 21, 1955.