§2873 — Title 10 Armed Forces | U.S. Code

§2873 Direct Loans and Loan Guarantees

Title 10 › Subtitle Subtitle A— General Military Law › Part IV— SERVICE, SUPPLY, AND PROPERTY › Chapter 169— MILITARY CONSTRUCTION AND MILITARY FAMILY HOUSING › Subchapter IV— ALTERNATIVE AUTHORITY FOR ACQUISITION AND IMPROVEMENT OF MILITARY HOUSING › § 2873

Last updated Apr 3, 2026|Official source

Summary

Allows the appropriate Secretary to lend money or back loans for eligible groups to buy or build housing for military families or for service members without dependents. The Secretary must set loan rules to protect the United States, including how and when loans are repaid and what happens if a borrower defaults. A guarantee can cover no more than the lesser of 80 percent of the project's value or the loan’s unpaid principal. Loans and guarantees can only be made if budget authority to cover their cost is provided in advance (see section 502(5) of the Federal Credit Reform Act of 1990, 2 U.S.C. 661a(5)). If provided, a financing account (section 502(7), 2 U.S.C. 661a(7)) may be used to handle payments and claims.

Title 10, §2873

Armed Forces — Source: USLM XML via OLRC

(a)(1)Subject to subsection (c), the Secretary concerned may make direct loans to an eligible entity in order to provide funds to the eligible entity for the acquisition or construction of housing units that the Secretary determines are suitable for use as military family housing or as military unaccompanied housing.

(2)The Secretary concerned shall establish such terms and conditions with respect to loans made under this subsection as the Secretary considers appropriate to protect the interests of the United States, including the period and frequency for repayment of such loans and the obligations of the obligors on such loans upon default.

(b)(1)Subject to subsection (c), the Secretary concerned may guarantee a loan made to an eligible entity if the proceeds of the loan are to be used by the eligible entity to acquire, or construct housing units that the Secretary determines are suitable for use as military family housing or as military unaccompanied housing.

(2)The amount of a guarantee on a loan that may be provided under paragraph (1) may not exceed the amount equal to the lesser of—

(A)the amount equal to 80 percent of the value of the project; or

(B)the amount of the outstanding principal of the loan.

(3)The Secretary concerned shall establish such terms and conditions with respect to guarantees of loans under this subsection as the Secretary considers appropriate to protect the interests of the United States, including the rights and obligations of obligors of such loans and the rights and obligations of the United States with respect to such guarantees.

(c)Direct loans and loan guarantees may be made under this section only to the extent that appropriations of budget authority to cover their cost (as defined in section 502(5) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))) are made in advance, or authority is otherwise provided in appropriation Acts. If such appropriation or other authority is provided, there may be established a financing account (as defined in section 502(7) of such Act (2 U.S.C. 661a(7))), which shall be available for the disbursement of direct loans or payment of claims for payment on loan guarantees under this section and for all other cash flows to and from the Government as a result of direct loans and guarantees made under this section.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1999—Subsec. (a)(1). Pub. L. 106–65, § 2803(c)(1), substituted “an eligible entity” for “persons in the private sector” and “the eligible entity” for “such persons”. Subsec. (b)(1). Pub. L. 106–65, § 2803(c)(2), substituted “an eligible entity” for “any person in the private sector” and “the eligible entity” for “the person”.