Mitchell6024/quickb · Datasets at Hugging Face

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23930e90-c179-45ae-948b-c77b72f65fe6	Additionally, Loan Guaranty training resources are available through the VA Home Loan website at https://www.benefits.va.gov/homeloans/index.asp. c.	VA_Guidelines.txt
e9ded332-40a6-46d4-b57e-a409716bb5b9	Electronic The Lender’s Handbook, Servicing Guide, VA circulars, and other information Documents are all available through the Lenders, Servicers, and Real Estate Professionals and Files pages on the VA Home Loan website at https://www.benefits.va.gov/homeloans/index.asp. d.	VA_Guidelines.txt
a16d182e-a52a-4bd2-a050-a3c00bff84b5	Receipt of It is essential that lenders inform the appropriate VA office whenever they VA Mailings have point of contact, address, or email changes. Informational mailings are sent to the address associated with a lender’s VA ID number. e.	VA_Guidelines.txt
46e8d463-4bf5-4e50-980b-afa872be79b9	VA Offices of Contact the RLC with jurisdiction over the lender’s home office to request Jurisdiction any information not found in the VA Lender’s Handbook, or to discuss a particular loan. Continued on next page 1-38 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 13. Calculation of Adjusted Net Worth Change Date February 1, 2019 This chapter has been revised in its entirety. a.	VA_Guidelines.txt
d77d1b12-97b9-46e0-86e8-cf368e671b64	Method Net worth for VA purposes is determined by 38 C. F. R. §36.4352(b)(4)(ii). b. CPA Adjusted net worth must be calculated by a CPA using an audited and Requirement certified balance sheet from the lender’s latest financial statement, per the above regulation. c.	VA_Guidelines.txt
cbe20acb-cfdb-4fe4-87ad-41a2defdd1c3	Calculation Adjusted net worth is total assets, minus total liabilities, minus the following unacceptable assets: Any assets of the lender pledged to secure obligations of another person or entity.	VA_Guidelines.txt
6c16ae9f-a57d-4b31-8d6a-ba9fd0a13a79	Any asset due from either officers or stockholders of the lender or related entities, in which the lender’s officers or stockholders have a personal interest, unrelated to their position as an officer or stockholder.	VA_Guidelines.txt
b2c38f3a-8969-4c87-bf77-d94a7cd51536	Personal interest indicates a relationship between the lender and a person or entity in which that specified person has a financial interest in or is employed in a management position by the lender. Any investment in related entities in which the lender’s officers or stockholders (or their family members) have a personal interest unrelated to their position as an officer or stockholder.	VA_Guidelines.txt
77da27f5-6790-46e7-b76d-4c65693501d4	That portion of an investment in joint ventures, subsidiaries, affiliates and/or other related entities, which is carried at a value greater than equity, as adjusted (“equity, as adjusted” means the book value of the related entity reduced by the amount of unacceptable assets carried by the related entity).	VA_Guidelines.txt
2782edd7-19f7-4695-a829-73f4074bb0e0	All intangibles, such as goodwill, covenants not to compete, franchisee fees, organization costs, and so on, except unamortized servicing costs carried at a value established by an arm’s-length transaction and presented in accordance with generally-accepted accounting principles.	VA_Guidelines.txt
2f458538-67b4-4646-815a-c22e941c2506	That portion of an asset not readily marketable and for which appraised values are very subjective carried at a value in excess of a substantially discounted appraised value. Assets such as antiques, art work, and gemstones are subject to this provision and should be carried at the lower of cost or market.	VA_Guidelines.txt
6837d753-36c5-4a3e-860d-0f7471caffb4	Any asset that is principally used for the personal enjoyment of an officer or stockholder and not for normal business purposes. 1-40 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 13. Calculation of Adjusted Net Worth Change Date February 1, 2019 This chapter has been revised in its entirety. a. Method Net worth for VA purposes is determined by 38 C. F. R. §36.4352(b)(4)(ii). b.	VA_Guidelines.txt
f190712e-ce7d-4e79-be07-d9fcf62b197f	F. R. §36.4352(b)(4)(ii). b. CPA Adjusted net worth must be calculated by a CPA using an audited and Requirement certified balance sheet from the lender’s latest financial statement, per the above regulation. c.	VA_Guidelines.txt
631b78f6-4d98-4571-87cb-ac4a9ec97267	Calculation Adjusted net worth is total assets, minus total liabilities, minus the following unacceptable assets: Any assets of the lender pledged to secure obligations of another person or entity.	VA_Guidelines.txt
1b0c4170-ac2a-4d3e-8afc-221b05047792	Any asset due from either officers or stockholders of the lender or related entities, in which the lender’s officers or stockholders have a personal interest, unrelated to their position as an officer or stockholder.	VA_Guidelines.txt
0605725d-1364-4fc6-a5dc-287d2038cfea	Personal interest indicates a relationship between the lender and a person or entity in which that specified person has a financial interest in or is employed in a management position by the lender. Any investment in related entities in which the lender’s officers or stockholders (or their family members) have a personal interest unrelated to their position as an officer or stockholder.	VA_Guidelines.txt
3323a0e9-621e-4d6f-afc1-d130f4b07d90	That portion of an investment in joint ventures, subsidiaries, affiliates and/or other related entities, which is carried at a value greater than equity, as adjusted (“equity, as adjusted” means the book value of the related entity reduced by the amount of unacceptable assets carried by the related entity).	VA_Guidelines.txt
d5ce9836-b7e6-4a9b-baa5-7a0332d75d67	All intangibles, such as goodwill, covenants not to compete, franchisee fees, organization costs, and so on, except unamortized servicing costs carried at a value established by an arm’s-length transaction and presented in accordance with generally-accepted accounting principles.	VA_Guidelines.txt
9e2b40ca-c7fb-4807-a55e-feeca5bdef23	That portion of an asset not readily marketable and for which appraised values are very subjective carried at a value in excess of a substantially discounted appraised value. Assets such as antiques, art work, and gemstones are subject to this provision and should be carried at the lower of cost or market.	VA_Guidelines.txt
a569973e-867f-45cd-91d7-fb8e915f694c	Any asset that is principally used for the personal enjoyment of an officer or stockholder and not for normal business purposes. 1-40 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 14. Elements of a Quality Control Plan Change Date February 1, 2019 This chapter has been revised in its entirety. a.	VA_Guidelines.txt
08b1075b-205e-475e-a30a-4e4d347d6f7c	Purpose A quality control (QC) plan must be submitted with every non-supervised lender’s application for automatic authority. This exhibit outlines the criteria which the QC plan must satisfy. Although supervised lenders are not required to submit a QC plan with their application, VA will review the QC plan when VA performs a lender audit. b.	VA_Guidelines.txt
ee1ed4fc-ce79-456f-863e-a7473b52553d	Audit The QC plan must provide for: Program a program of internal or external audit of the lender’s compliance with VA loan processing and underwriting requirements, or independent review by management personnel knowledgeable of such requirements who have no direct loan processing or underwriting responsibilities. c.	VA_Guidelines.txt
348b8843-cabd-4695-9b84-30006fc19c48	Adequate The QC plan must provide: Scope Audits or reviews are not less than ten percent of all VA-guaranteed mortgages originated by the lender monthly, including its branches and authorized agents except that lenders making more than 140 VA mortgages monthly may use statistical sampling methods in lieu of the ten percent.	VA_Guidelines.txt
4e0ac5f4-c3f7-45be-8816-ae7a26043213	Loans processed by all loan officers and underwriters and a random selection which includes loans from all branch offices and authorized agents. Procedures for expanding scope when fraudulent activity or patterns of deficiencies are identified. For lenders participating in LAPP, that reviews include the QC procedures.	VA_Guidelines.txt
04168f13-1316-4d56-bc4c-d82ee187db41	Procedures for validating third party verification data obtained through Automated Underwriting Systems (AUS). For each branch office that originates VA loans, an on-site branch office review should be conducted at least once annually. Continued on next page 1-41 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 14. Elements of a Quality Control Plan, continued d.	VA_Guidelines.txt
7d902dea-f261-4288-bea4-2304cd7daa3c	Elements of a Quality Control Plan, continued d. Management The QC plan must provide for written notification of deficiencies cited as a Notification result of audits or reviews at least quarterly to the lender’s senior management. ________________________________________________________________ e.	VA_Guidelines.txt
4ac8ceac-556d-4c7f-8efa-8bf80cd0265c	Corrective The QC plan must require that: Action by Management prompt and effective corrective action by senior management on all deficiencies identified by either the lender or VA. maintenance of documentation of deficiencies and corrective actions taken. Where patterns of deficiencies have been identified, corrective instructions be provided to all relevant employees. f.	VA_Guidelines.txt
faa797f3-abfc-4788-be9a-22490a318700	Deficiencies The QC plan must: Reported to VA Require prompt reporting of any violation of law or regulation, false statements or program abuses by the lender, its employees or any other party to the transaction to the VA office of jurisdiction, and Provide for furnishing audit or review findings to VA on demand. g.	VA_Guidelines.txt
ea6dac9f-55da-4a72-87e5-0437f6e1332c	Current VA The QC plan must ensure that: Underwriting Policies and The lender’s procedures are revised in a timely manner to accurately reflect Procedures changes in VA requirements.	VA_Guidelines.txt
7038c2c7-d49a-484c-bfd6-7f9c7af39549	Maintained Each of the lender’s offices, including its approved agent(s) and branches, maintains copies of all VA publications, including regulations, handbooks, and releases, which are relevant to the lender’s VA loan origination activities. They must be accessible to all employees, periodically reviewed with appropriate staff, and kept current. h.	VA_Guidelines.txt
98f9525f-e994-42cb-9208-a8452bf43c76	Only The QC plan must ensure that all loans submitted by the lender to VA for Authorized guaranty are processed by employees of the lender or its authorized agent(s). Persons Process Loans Continued on next page 1-42 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 14. Elements of a Quality Control Plan, continued i.	VA_Guidelines.txt
955927c1-97db-4dd2-8334-f45189c1bbb4	Elements of a Quality Control Plan, continued i. Funding Fees The QC plan must ensure that VA funding fees are remitted within 15 days Paid from the date of loan closing and late charges and interest penalties are promptly submitted. j.	VA_Guidelines.txt
852c94b6-b814-4bed-ab66-6fdc3b65892b	Escrow Fund The QC plan must ensure that escrow funds received from borrowers are not Management excessive and are not used for any purposes other than that for which they are received. k. Debarred The QC plan must ensure that the lender does not employ for VA loan Persons Not origination, or underwriting, any individual who is debarred or suspended. Employed l.	VA_Guidelines.txt
6926537e-404f-4e4d-9597-4d957780e21c	Employed l. Review of The QC plan must provide for the following on loans selected for review: Loans Review of loans within 90 days of loan closing. Written re-verification of borrower’s employment, deposits, and all sources of funds. Reordering of a new credit report from another credit source.	VA_Guidelines.txt
d69b0ae7-706d-4821-b84e-b467e4e9526e	Note: Report may be a Residential Mortgage Credit Report (RMCR) or an in-file report which merges the records of the three national repositories of credit files, commonly known as a 3-file merge.	VA_Guidelines.txt
814f4d79-3dd9-4896-94a1-5246b818a33b	The reviewer determines whether underwriting conclusions and lender documentation are overall complete and accurate per the table below: Step Action 1 Does each loan file contain all required loan processing, underwriting and legal documents	VA_Guidelines.txt
805c099d-ba38-4b7b-9577-460089a72ef2	? 2 Were all relevant loan documents not pre-signed in blank by the borrower or employee(s) of the lender, and were all corrections initialed by the borrower or employee(s) of the lender? 3 Were verifications of employment, verifications of deposit, and the credit report not handled by the borrower or any interested third party	VA_Guidelines.txt
1bf0fd1c-85d5-449f-ba02-46ad01d731a8	? 4 Do credit reports conform to RMCR standards, if used, and if more than one credit report was ordered, were all credit reports submitted with the loan package to VA?	VA_Guidelines.txt
c8045d79-52f8-47bc-9e5f-de602f75b726	Continued on next page 1-43 1-43 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 14. Elements of a Quality Control Plan, continued l. Review of Step Action Loans, 5 Is there a correlation of each outstanding liability and each asset of the continued borrower and co-borrower used to qualify for the loan to those listed on the initial loan application?	VA_Guidelines.txt
022bcc6e-cc9a-4e85-bd83-c59d8e2ae99f	Note: If discrepancies exist, the loan file must show they have been explained or otherwise resolved. 6 Were any outstanding judgments appearing on the credit report listed on the application with an accompanying explanation and documentation?	VA_Guidelines.txt
f942235b-6840-4c3e-9f3a-95459e3d3ce8	Note: When there is a delinquency or judgment involving debt to the Federal Government, evidence must be provided showing the delinquent account was brought current or satisfactory arrangements were made between the borrower and the Federal agency owed, or the judgment was paid or otherwise satisfied. 7 Does the loan file contain required tax returns?	VA_Guidelines.txt
f1a2a126-3eb4-4dda-bb98-d92c3b74d3a5	Note: If the borrower is self-employed, the loan file must include 2 years of tax returns and a profit and loss statement for year-to-date since the end of the last fiscal year, and a current balance sheet showing all assets and liabilities	VA_Guidelines.txt
8e4fe1d1-b40e-4cba-9630-764647b22115	. 8 Was the Closing Disclosure accurately prepared and properly certified? 9 Were fees charged to the Veteran appropriate and accurate? 10 Was the loan properly documented and submitted in accordance with VA standardized loan file set-up procedure? 11 Was the loan current at the time it was submitted to VA for guaranty	VA_Guidelines.txt
ef41e879-e6f4-4672-a3ee-6654395b9cbd	? 12 Did the borrower transfer the property at the time of closing or soon after, indicating possible misuse of the Veteran’s loan entitlement? 13 Were all conflicting information or discrepancies resolved and properly documented in writing prior to submission of the loan to VA for guaranty? 1-44 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 15	VA_Guidelines.txt
a411d55a-d50b-461b-9dfe-0e69d4c5f917	.	VA_Guidelines.txt
4a5b4274-0bdb-4fe2-9ff5-cf9923967c4f	Application Checklist for Authority to Close Loans on an Automatic Basis, continued a.	VA_Guidelines.txt
f5880969-4397-449e-a3c5-12214b34b7e6	Checklist, Agent Experience continued Documentation A copy of the VA letter approving the firm as an agent for the sponsoring lender; a letter from a senior officer of the lender indicating the number of VA loans submitted and compliance with VA requirements and procedures; and a copy of the corporate resolution.	VA_Guidelines.txt
0b533bea-2bd7-49f3-a75d-597b0f0715c8	Experience requirement Firm actively operating as an agent for an automatic lender for 2 years, and originated a minimum of ten VA loans; or, Firm actively operating as an agent for an automatic lender for less than 2 years, and originated a minimum of 25 VA loans	VA_Guidelines.txt
08384a64-42d3-4b51-b2d6-10133b341264	. 2) Underwriter(s) Documentation VA Form 26-8736a completed by a senior officer outlining the underwriter’s specific experience with VA loans.	VA_Guidelines.txt
738a8991-bf63-4d8d-97b4-98dbcc442deb	If the underwriter is not located in the home office, provide certification from a senior officer that the underwriter is supervised by an individual other than a branch manager or other person with production responsibilities must be provided.	VA_Guidelines.txt
7d246929-773a-420c-8b5e-0c9829724fe3	Experience Requirement Minimum 3 years of experience in processing, pre-underwriting or underwriting mortgage loans, and at least 1 recent year of this experience making underwriting decisions on VA loans (recent = within the past three years); or, Accredited Residential Underwriter (ARU) by the Mortgage Bankers Association	VA_Guidelines.txt
13bdcb24-a673-4696-8070-bc50d262ea23	. 3) Working Capital or Net Worth A minimum of $50,000 in working capital must be demonstrated; or Lender has $250,000 net worth and reported by CPA in annual financial statements (see Topic 14 of this chapter).	VA_Guidelines.txt
b00c2ab7-36bd-47e4-b5c2-ca0638a94645	Continued on next page 1-46 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 15. Application Checklist for Authority to Close Loans on an Automatic Basis, continued a.	VA_Guidelines.txt
3bc2f96a-b8e9-41ad-83f1-64dbe2647078	Checklist, 4) Financial Statements audited and certified by a CPA and current to continued within 6 months of the application date	VA_Guidelines.txt
d70049cd-5d92-4211-bc3a-49af631ae033	. 5) Line of Credit of at Least $1 Million Dollars 6) Two Permanent Investors with addresses, telephone numbers and name(s) of contact person(s) 7) Quality Control Plan That Meets VA Requirements (see Topic 14 of this chapter) 8) Designated Liaison Officer 9) Corporate Resolutions and Delinquency Data for Affiliates 10) List of Branch Offices or Corporate Resolutions for Agents 11) Application Fee	VA_Guidelines.txt
1d3b65b7-9b54-4ac5-8858-895ce6865574	Resolutions for Agents 11) Application Fee Submitted 1-47 CHAPTER 2: VETERAN’S ELIGIBILITY AND ENTITLEMENT Overview Topic Title Page 1 How to Establish the Applicant’s Eligibility for a VA Loan 2-2 2 What the Certificate of Eligibility Tells the Lender 2-4 3 How to Apply for a Certificate of Eligibility 2-7 4 Proof of Service Requirements 2-8 5 Basic Eligibility Requirements 2-10 6 Restoration of	VA_Guidelines.txt
7f0b052b-cb1d-4a42-8f33-0522b49dc400	Eligibility Requirements 2-10 6 Restoration of Previously Used Entitlement 2-13 7 Misuse of Veteran’s Entitlement 2-14 2-1 VA Lenders Handbook M26-7 Chapter 2: Veteran’s Eligibility and Entitlement Topic 1: How to Establish the Applicant’s Eligibility for a VA Loan Change Date: March 28, 2019 · This chapter has been revised in its entirety	VA_Guidelines.txt
65c28450-cf8a-4e59-8cf6-3738648e2b8e	. a.	VA_Guidelines.txt
e95697a2-8deb-4f68-a108-315a23fda912	What is Eligibility Eligibility means the Veteran meets the basic criteria of length of service (LOS) and character of service (COS) for the home loan benefit. Entitlement is the amount a Veteran has available for a guaranty on a loan. An eligible Veteran must still meet credit and income standards in order to qualify for a VA-guaranteed loan. b.	VA_Guidelines.txt
d12a7a90-1fb3-452b-ad5b-1b85dedfb3a0	The Lender’s Role The Certificate of Eligibility (COE) issued in WebLGY is the proof of eligibility for the lender. The lender must ensure the applicant is an eligible Veteran before an appraisal is ordered, the loan cannot be processed or closed. Lenders should never close a loan before they establish eligibility. VA cannot guarantee a loan for an ineligible Veteran.	VA_Guidelines.txt
6fd2538e-a7bf-4906-8014-77451b5d6e84	Once a COE is issued there may be conditions on the COE which must be met in order to receive a guaranty. The conditions that could appear on the COE are: · Active Duty Service Member (ADSM) - Valid unless discharged or released subsequent to date of this certificate. A certification of continuous active duty as of date of note is required.	VA_Guidelines.txt
5e416c82-c650-4cc7-9916-711d9392a315	This COE is not valid if the ADSM was discharged after the date of the certificate. In this instance, a new COE must be obtained. · Funding Fee – Please fax a copy of VA Form 26-8937 to the Regional Loan Center (RLC) of Jurisdiction. Please have the lender contact the RLC for loan processing. · Funding Fee – Veteran is not exempt from funding fee due to non service-connected pension.	VA_Guidelines.txt
23c50592-e997-4557-b8ab-63707552cdb4	Loan application will require prior approval processing by VA. · Reserve or National Guard Member – Valid unless discharged or released subsequent to the date of this certificate.	VA_Guidelines.txt
c61c20b9-65ca-464c-a5cc-b9e0c65a57b0	A certification of continuous service in the Selected Reserve or National Guard as of the date of the note is required. · Reserve/National Guard Funding Fee – Entitlement is based on service in the Selected Reserve and/or National Guard so an increased funding fee is required	VA_Guidelines.txt
8bc906cc-8192-464a-b3ef-b0c0e4ff33e1	. · Refinance Restoration – Restored entitlement previously used or charged for a VA Loan Identification Number (LIN) as shown here is available only for use in connection with the property which secured that loan. · One-Time Restoration – Entitlement previously used for a VA LIN has been restored without disposal of the property, under provision of 38 U.	VA_Guidelines.txt
7e1b3af6-f54f-4f4a-8679-30b5dc943d9c	S. C. 3702 (b)(4). Any future restoration requires disposal of all property obtained with a VA loan. · Subsequent Use Funding Fee – Entitlement code of “5” indicates previously used entitlement has been restored. The Veteran must pay a subsequent use funding fee on any future loan unless the Veteran is exempt.	VA_Guidelines.txt
401b2f40-9796-49fe-8ce5-f04856d37fb5	Continued on next page 2-2 VA Lenders Handbook M26-7 Chapter 2: Veteran’s Eligibility and Entitlement Topic 1: How to Establish the Applicant’s Eligibility for a VA Loan, continued b.	VA_Guidelines.txt
90d51cdf-2b4b-4b9c-803b-83c39ab3cd59	The Lender’s Role, continued · Surviving Spouse – Eligibility of the surviving spouse and the validity of guaranty entitlement hereby evidenced will be null and void if any change in marital status occurs, subsequent to the date of this COE and prior to the date a loan to the widow or widower is closed, unless the lender making the loan was not aware of any change in marital status and obtained	VA_Guidelines.txt
2c948bef-e3b8-496a-83c5-2e5edd609b6b	of any change in marital status and obtained on the date the loan closed an affidavit from the surviving spouse in the form prescribed by the Secretary	VA_Guidelines.txt
317e05fc-8281-4169-a50e-ad7c06c98069	. · Prisoner of War/Missing in Action (POW/MIA) – This certificate evidences eligibility under 38 U.	VA_Guidelines.txt
5934d0fe-c78f-49e5-9cf2-8174b92cd288	S. C 3701 (b)(3) of the individual named as the spouse of a Servicemember missing in action or prisoner of war. Any unused entitlement will terminate automatically upon the receipt of official notice that the Servicemember is no longer in a category specified in 38 U. S.	VA_Guidelines.txt
e48a5314-2b08-4b26-a0ea-67624eb8e5db	S. C. 3701 (b)(3) or upon dissolution of marriage. · Paid-in-Full Loan – Entitlement charged on a paid-in-full loan cannot be restored until the Veteran applies for restoration of entitlement.	VA_Guidelines.txt
4fad677f-d065-4a1f-9134-375f555a2963	The lender shall submit the application electronically through VA’s Automated Certificate of Eligibility (ACE) online application. · Foreclosed Loan – Entitlement charged on a foreclosed loan cannot be restored until VA’s loss on the loan has been fully repaid. Information about repayment of the loss may be obtained by contacting an RLC.	VA_Guidelines.txt
c9019b72-f794-4801-88ae-7d8125beb983	Although this chapter discusses some of the basic eligibility criteria, it is not intended to provide a lender with all the knowledge necessary to make an eligibility determination; consequently, all the various exceptions and nuances of eligibility are not included. Appendix 1-A at the end of this chapter provides a quick reference and overview of basic eligibility criteria.	VA_Guidelines.txt
ad2f4061-5e37-4af1-a488-9ecdb5e6823b	Lenders must use VA’s ACE online application to obtain the COE. Go to VA’s Information Portal (VIP) and select WebLGY from the applications toolbar; then select Eligibility and follow the prompts. In many cases, a COE can be generated in seconds. If not, lenders should select the link to submit an electronic application.	VA_Guidelines.txt
d6694c2c-3064-4b2e-9f39-136bc234d938	This method allows lenders to upload supporting documentation and submit an application electronically to be processed by one of the RLCs. A Veteran can apply for a COE through eBenefits at http://www.ebenefits.va.gov or, if necessary, by completing VA Form 26-1880, Request for a Certificate of Eligibility and mailing it to the listed RLC. Simultaneous applications may delay COE processing.	VA_Guidelines.txt
6a42e2de-7638-4122-9889-87d48834345d	To ensure quicker responses, it is preferable to apply online. c. IRRRL Eligibility Determination VA systems will not generate a VA case number for an Interest Rate Reduction Refinancing Loan (IRRRL) if there is no record of an active VA loan.	VA_Guidelines.txt
d42aa43e-61aa-4ad9-b34b-120eabf6ba44	This means if a lender successfully obtains a case number for an IRRRL, a COE is not required. 2-3 VA Lenders Handbook M26-7 Chapter 2: Veteran’s Eligibility and Entitlement Topic 2: What the Certificate of Eligibility Tells the Lender Change Date: March 28, 2019 · This chapter has been revised in its entirety. a.	VA_Guidelines.txt
0ffabeaf-9984-4689-ab97-a3d122aa7cde	Eligibility The lender may rely on a COE as proof the Veteran is eligible for the home loan benefit. Although eligible for the home loan benefit, Veterans must still qualify based on income and credit before loan approval is granted. b. Amount of Entitlement Entitlement is the amount available for use on a loan. The amount of basic entitlement is $36,000.	VA_Guidelines.txt
1621efde-6089-4959-8f8d-4e138d4204c2	The amount of basic entitlement is $36,000. This may be reduced if a Veteran has used entitlement before which has not been restored. The amount of basic entitlement will be displayed near the center of the COE. For example it may say: “THIS VETERAN’S BASIC ENTITLEMENT IS $______.	VA_Guidelines.txt
5ead9918-6040-4532-9f92-d12a4736ed4e	TOTAL ENTITLEMENT CHARGED TO PREVIOUS VA LOANS IS $______.” For loans greater than $144,000, bonus entitlement may be available. For loans greater than $144,000, but less than $484,350, the entitlement is 25 percent. For loans greater than $484,350, the maximum entitlement is 25 percent of the loan limit, which can vary by county.	VA_Guidelines.txt
785a5e4f-b84a-4892-87de-c74fdac5b275	For a list of loan limits by county, visit http://www.benefits.va.gov/homeloans/lenders.asp. Please note county limits can change yearly. VA will post the limits for each year on our website as they change. The Veteran may have entitlement for loans greater than $144,000, the COE does not reflect the bonus entitlement.	VA_Guidelines.txt
1ee092d9-cc00-4d66-9d98-2fbdf9e46710	Instead, an asterisk by the word “available” refers to a note, which explains the possibility of additional entitlement. If the Veteran previously used entitlement, which has not been restored, available entitlement is reduced by the amount used on the prior loan(s).	VA_Guidelines.txt
076905e6-3564-4bf5-a1ef-8231e66c9934	The lender has three options in this situation: · Make the loan knowing that VA’s guaranty is limited to the amount of available entitlement, or · Have the Veteran apply for restoration of previously used entitlement, or · The Veteran may provide a downpayment in conjunction with their remaining entitlement.	VA_Guidelines.txt
2bd96758-d758-44fc-b584-2a59a529edd4	Continued on next page 2-4 VA Lenders Handbook M26-7 Chapter 2: Veteran’s Eligibility and Entitlement Topic 2: What the Certificate of Eligibility Tells the Lender, continued c. Funding Fee Field and Conditions on the COE The “funding fee” field appears near the top of the COE.	VA_Guidelines.txt
511a3c3e-25f4-4242-a487-104c4a644655	The exemption status, either “exempt”, “non-exempt” or “contact RLC” will appear to the right of this field: · Exempt status indicates a Veteran is exempt from paying the funding fee. · Non-exempt status indicates a Veteran is not exempt from paying the funding fee	VA_Guidelines.txt
da1f39e0-d9d7-4658-8fa9-bafcd1c6c4e9	. · Contact RLC indicates a system-generated determination is not available, or any loan may need to be submitted to VA as prior approval.	VA_Guidelines.txt
4508d6c7-40db-480a-904d-9519a802e2af	Lenders must be sure to comply with all “conditions” appearing near the middle portion of the COE: · For COEs with “exempt” status, the following “conditions” may appear: □ Funding Fee – Veteran is exempt from the funding fee due to receipt of service- connected disability compensation of $______monthly	VA_Guidelines.txt
c69effcb-8481-4d4f-8dc4-489db7de3d7f	. □ Funding Fee – Veteran is exempt from the funding fee due to receipt of service- connected disability compensation.	VA_Guidelines.txt
f0bf7251-8e0c-4440-8486-19b6b8dd7c96	Monthly compensation rate has not been determined to date. □ Funding Fee – Please fax a copy of VA Form 26-8937 to the VA RLC of jurisdiction. □ Funding Fee – Please have the lender contact the VA RLC for loan processing.	VA_Guidelines.txt
da102462-f46f-41ad-bd58-1636fa6a14e5	Please fax a copy of VA Form 26-8937 to the RLC of jurisdiction. · For COEs with a “non-exempt” status, the following “conditions” may appear: □ Funding Fee – Veteran is not exempt from the funding fee. □ Funding Fee – Veteran is not exempt from the funding fee due to receipt of non- service-connected pension.	VA_Guidelines.txt
87b9c95c-2da6-4492-a315-29ae6174665a	Loan application will require prior approval processing by VA. · For COEs with “contact RLC” status, the following “condition” will appear: □ Funding Fee – Please fax a copy of VA Form 26-8937 to the RLC of jurisdiction of where the property is located. d. IRRRL Exemption Status The funding fee exemption status on IRRRLs is displayed in WebLGY at the time the case number is ordered. e.	VA_Guidelines.txt
429b3718-5e6a-43a4-b47a-7e7c44286e1a	Exempt Status and Verified Income Lenders may rely on the “exempt” status appearing next to the “funding fee” field for verification of the funding fee exemption. If the dollar amount is different than what is shown on the COE, use the most recent bank statement or award disability award letter for verification.	VA_Guidelines.txt
898cc1bd-28c8-4baa-ac94-6193b0228896	Additionally, on COEs with an “exempt” status, lenders may treat any service- connected disability income amount appearing in the “condition” section of the COE as verified income. There is no need to fax in VA Form 26-8937 to confirm the status or amount showing on the COE.	VA_Guidelines.txt
48115073-9a3a-42b5-8429-5aebbefb52a2	Continued on next page 2-5 VA Lenders Handbook M26-7 Chapter 2: Veteran’s Eligibility and Entitlement Topic 2: What the Certificate of Eligibility Tells the Lender, continued c. Funding Fee Field and Conditions on the COE The “funding fee” field appears near the top of the COE.	VA_Guidelines.txt
13212445-70aa-4f73-b9b4-15067f3eb8e9	The exemption status, either “exempt”, “non-exempt” or “contact RLC” will appear to the right of this field: · Exempt status indicates a Veteran is exempt from paying the funding fee. · Non-exempt status indicates a Veteran is not exempt from paying the funding fee	VA_Guidelines.txt
34a47260-fa7c-4db5-a97b-dcdfea7c2d11	. · Contact RLC indicates a system-generated determination is not available, or any loan may need to be submitted to VA as prior approval.	VA_Guidelines.txt
917010db-69fb-419e-9cb2-9b9e1c730ee1	Lenders must be sure to comply with all “conditions” appearing near the middle portion of the COE: · For COEs with “exempt” status, the following “conditions” may appear: □ Funding Fee – Veteran is exempt from the funding fee due to receipt of service- connected disability compensation of $______monthly	VA_Guidelines.txt
6a3a5f19-5352-4c8e-bc35-5fef76a45bc2	. □ Funding Fee – Veteran is exempt from the funding fee due to receipt of service- connected disability compensation.	VA_Guidelines.txt
33786b2b-cfbe-47fe-bb80-88c07c4bedf3	Monthly compensation rate has not been determined to date. □ Funding Fee – Please fax a copy of VA Form 26-8937 to the VA RLC of jurisdiction. □ Funding Fee – Please have the lender contact the VA RLC for loan processing.	VA_Guidelines.txt

23930e90-c179-45ae-948b-c77b72f65fe6

Additionally, Loan Guaranty training resources are available through the VA Home Loan website at https://www.benefits.va.gov/homeloans/index.asp. c.

VA_Guidelines.txt

e9ded332-40a6-46d4-b57e-a409716bb5b9

Electronic The Lender’s Handbook, Servicing Guide, VA circulars, and other information Documents are all available through the Lenders, Servicers, and Real Estate Professionals and Files pages on the VA Home Loan website at https://www.benefits.va.gov/homeloans/index.asp. d.

VA_Guidelines.txt

a16d182e-a52a-4bd2-a050-a3c00bff84b5

Receipt of It is essential that lenders inform the appropriate VA office whenever they VA Mailings have point of contact, address, or email changes. Informational mailings are sent to the address associated with a lender’s VA ID number. e.

VA_Guidelines.txt

46e8d463-4bf5-4e50-980b-afa872be79b9

VA Offices of Contact the RLC with jurisdiction over the lender’s home office to request Jurisdiction any information not found in the VA Lender’s Handbook, or to discuss a particular loan. Continued on next page 1-38 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 13. Calculation of Adjusted Net Worth Change Date February 1, 2019 This chapter has been revised in its entirety. a.

VA_Guidelines.txt

d77d1b12-97b9-46e0-86e8-cf368e671b64

Method Net worth for VA purposes is determined by 38 C. F. R. §36.4352(b)(4)(ii). b. CPA Adjusted net worth must be calculated by a CPA using an audited and Requirement certified balance sheet from the lender’s latest financial statement, per the above regulation. c.

VA_Guidelines.txt

cbe20acb-cfdb-4fe4-87ad-41a2defdd1c3

Calculation Adjusted net worth is total assets, minus total liabilities, minus the following unacceptable assets: Any assets of the lender pledged to secure obligations of another person or entity.

VA_Guidelines.txt

6c16ae9f-a57d-4b31-8d6a-ba9fd0a13a79

Any asset due from either officers or stockholders of the lender or related entities, in which the lender’s officers or stockholders have a personal interest, unrelated to their position as an officer or stockholder.

VA_Guidelines.txt

b2c38f3a-8969-4c87-bf77-d94a7cd51536

Personal interest indicates a relationship between the lender and a person or entity in which that specified person has a financial interest in or is employed in a management position by the lender. Any investment in related entities in which the lender’s officers or stockholders (or their family members) have a personal interest unrelated to their position as an officer or stockholder.

VA_Guidelines.txt

77da27f5-6790-46e7-b76d-4c65693501d4

That portion of an investment in joint ventures, subsidiaries, affiliates and/or other related entities, which is carried at a value greater than equity, as adjusted (“equity, as adjusted” means the book value of the related entity reduced by the amount of unacceptable assets carried by the related entity).

VA_Guidelines.txt

2782edd7-19f7-4695-a829-73f4074bb0e0

All intangibles, such as goodwill, covenants not to compete, franchisee fees, organization costs, and so on, except unamortized servicing costs carried at a value established by an arm’s-length transaction and presented in accordance with generally-accepted accounting principles.

VA_Guidelines.txt

2f458538-67b4-4646-815a-c22e941c2506

That portion of an asset not readily marketable and for which appraised values are very subjective carried at a value in excess of a substantially discounted appraised value. Assets such as antiques, art work, and gemstones are subject to this provision and should be carried at the lower of cost or market.

VA_Guidelines.txt

6837d753-36c5-4a3e-860d-0f7471caffb4

Any asset that is principally used for the personal enjoyment of an officer or stockholder and not for normal business purposes. 1-40 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 13. Calculation of Adjusted Net Worth Change Date February 1, 2019 This chapter has been revised in its entirety. a. Method Net worth for VA purposes is determined by 38 C. F. R. §36.4352(b)(4)(ii). b.

VA_Guidelines.txt

f190712e-ce7d-4e79-be07-d9fcf62b197f

F. R. §36.4352(b)(4)(ii). b. CPA Adjusted net worth must be calculated by a CPA using an audited and Requirement certified balance sheet from the lender’s latest financial statement, per the above regulation. c.

VA_Guidelines.txt

631b78f6-4d98-4571-87cb-ac4a9ec97267

Calculation Adjusted net worth is total assets, minus total liabilities, minus the following unacceptable assets: Any assets of the lender pledged to secure obligations of another person or entity.

VA_Guidelines.txt

1b0c4170-ac2a-4d3e-8afc-221b05047792

Any asset due from either officers or stockholders of the lender or related entities, in which the lender’s officers or stockholders have a personal interest, unrelated to their position as an officer or stockholder.

VA_Guidelines.txt

0605725d-1364-4fc6-a5dc-287d2038cfea

Personal interest indicates a relationship between the lender and a person or entity in which that specified person has a financial interest in or is employed in a management position by the lender. Any investment in related entities in which the lender’s officers or stockholders (or their family members) have a personal interest unrelated to their position as an officer or stockholder.

VA_Guidelines.txt

3323a0e9-621e-4d6f-afc1-d130f4b07d90

That portion of an investment in joint ventures, subsidiaries, affiliates and/or other related entities, which is carried at a value greater than equity, as adjusted (“equity, as adjusted” means the book value of the related entity reduced by the amount of unacceptable assets carried by the related entity).

VA_Guidelines.txt

d5ce9836-b7e6-4a9b-baa5-7a0332d75d67

All intangibles, such as goodwill, covenants not to compete, franchisee fees, organization costs, and so on, except unamortized servicing costs carried at a value established by an arm’s-length transaction and presented in accordance with generally-accepted accounting principles.

VA_Guidelines.txt

9e2b40ca-c7fb-4807-a55e-feeca5bdef23

That portion of an asset not readily marketable and for which appraised values are very subjective carried at a value in excess of a substantially discounted appraised value. Assets such as antiques, art work, and gemstones are subject to this provision and should be carried at the lower of cost or market.

VA_Guidelines.txt

a569973e-867f-45cd-91d7-fb8e915f694c

Any asset that is principally used for the personal enjoyment of an officer or stockholder and not for normal business purposes. 1-40 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 14. Elements of a Quality Control Plan Change Date February 1, 2019 This chapter has been revised in its entirety. a.

VA_Guidelines.txt

08b1075b-205e-475e-a30a-4e4d347d6f7c

Purpose A quality control (QC) plan must be submitted with every non-supervised lender’s application for automatic authority. This exhibit outlines the criteria which the QC plan must satisfy. Although supervised lenders are not required to submit a QC plan with their application, VA will review the QC plan when VA performs a lender audit. b.

VA_Guidelines.txt

ee1ed4fc-ce79-456f-863e-a7473b52553d

Audit The QC plan must provide for: Program a program of internal or external audit of the lender’s compliance with VA loan processing and underwriting requirements, or independent review by management personnel knowledgeable of such requirements who have no direct loan processing or underwriting responsibilities. c.

VA_Guidelines.txt

348b8843-cabd-4695-9b84-30006fc19c48

Adequate The QC plan must provide: Scope Audits or reviews are not less than ten percent of all VA-guaranteed mortgages originated by the lender monthly, including its branches and authorized agents except that lenders making more than 140 VA mortgages monthly may use statistical sampling methods in lieu of the ten percent.

VA_Guidelines.txt

4e0ac5f4-c3f7-45be-8816-ae7a26043213

Loans processed by all loan officers and underwriters and a random selection which includes loans from all branch offices and authorized agents. Procedures for expanding scope when fraudulent activity or patterns of deficiencies are identified. For lenders participating in LAPP, that reviews include the QC procedures.

VA_Guidelines.txt

04168f13-1316-4d56-bc4c-d82ee187db41

Procedures for validating third party verification data obtained through Automated Underwriting Systems (AUS). For each branch office that originates VA loans, an on-site branch office review should be conducted at least once annually. Continued on next page 1-41 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 14. Elements of a Quality Control Plan, continued d.

VA_Guidelines.txt

7d902dea-f261-4288-bea4-2304cd7daa3c

Elements of a Quality Control Plan, continued d. Management The QC plan must provide for written notification of deficiencies cited as a Notification result of audits or reviews at least quarterly to the lender’s senior management. ________________________________________________________________ e.

VA_Guidelines.txt

4ac8ceac-556d-4c7f-8efa-8bf80cd0265c

Corrective The QC plan must require that: Action by Management prompt and effective corrective action by senior management on all deficiencies identified by either the lender or VA. maintenance of documentation of deficiencies and corrective actions taken. Where patterns of deficiencies have been identified, corrective instructions be provided to all relevant employees. f.

VA_Guidelines.txt

faa797f3-abfc-4788-be9a-22490a318700

Deficiencies The QC plan must: Reported to VA Require prompt reporting of any violation of law or regulation, false statements or program abuses by the lender, its employees or any other party to the transaction to the VA office of jurisdiction, and Provide for furnishing audit or review findings to VA on demand. g.

VA_Guidelines.txt

ea6dac9f-55da-4a72-87e5-0437f6e1332c

Current VA The QC plan must ensure that: Underwriting Policies and The lender’s procedures are revised in a timely manner to accurately reflect Procedures changes in VA requirements.

VA_Guidelines.txt

7038c2c7-d49a-484c-bfd6-7f9c7af39549

Maintained Each of the lender’s offices, including its approved agent(s) and branches, maintains copies of all VA publications, including regulations, handbooks, and releases, which are relevant to the lender’s VA loan origination activities. They must be accessible to all employees, periodically reviewed with appropriate staff, and kept current. h.

VA_Guidelines.txt

98f9525f-e994-42cb-9208-a8452bf43c76

Only The QC plan must ensure that all loans submitted by the lender to VA for Authorized guaranty are processed by employees of the lender or its authorized agent(s). Persons Process Loans Continued on next page 1-42 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 14. Elements of a Quality Control Plan, continued i.

VA_Guidelines.txt

955927c1-97db-4dd2-8334-f45189c1bbb4

Elements of a Quality Control Plan, continued i. Funding Fees The QC plan must ensure that VA funding fees are remitted within 15 days Paid from the date of loan closing and late charges and interest penalties are promptly submitted. j.

VA_Guidelines.txt

852c94b6-b814-4bed-ab66-6fdc3b65892b

Escrow Fund The QC plan must ensure that escrow funds received from borrowers are not Management excessive and are not used for any purposes other than that for which they are received. k. Debarred The QC plan must ensure that the lender does not employ for VA loan Persons Not origination, or underwriting, any individual who is debarred or suspended. Employed l.

VA_Guidelines.txt

6926537e-404f-4e4d-9597-4d957780e21c

Employed l. Review of The QC plan must provide for the following on loans selected for review: Loans Review of loans within 90 days of loan closing. Written re-verification of borrower’s employment, deposits, and all sources of funds. Reordering of a new credit report from another credit source.

VA_Guidelines.txt

d69b0ae7-706d-4821-b84e-b467e4e9526e

Note: Report may be a Residential Mortgage Credit Report (RMCR) or an in-file report which merges the records of the three national repositories of credit files, commonly known as a 3-file merge.

VA_Guidelines.txt

814f4d79-3dd9-4896-94a1-5246b818a33b

The reviewer determines whether underwriting conclusions and lender documentation are overall complete and accurate per the table below: Step Action 1 Does each loan file contain all required loan processing, underwriting and legal documents

VA_Guidelines.txt

805c099d-ba38-4b7b-9577-460089a72ef2

? 2 Were all relevant loan documents not pre-signed in blank by the borrower or employee(s) of the lender, and were all corrections initialed by the borrower or employee(s) of the lender? 3 Were verifications of employment, verifications of deposit, and the credit report not handled by the borrower or any interested third party

VA_Guidelines.txt

1bf0fd1c-85d5-449f-ba02-46ad01d731a8

? 4 Do credit reports conform to RMCR standards, if used, and if more than one credit report was ordered, were all credit reports submitted with the loan package to VA?

VA_Guidelines.txt

c8045d79-52f8-47bc-9e5f-de602f75b726

Continued on next page 1-43 1-43 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 14. Elements of a Quality Control Plan, continued l. Review of Step Action Loans, 5 Is there a correlation of each outstanding liability and each asset of the continued borrower and co-borrower used to qualify for the loan to those listed on the initial loan application?

VA_Guidelines.txt

022bcc6e-cc9a-4e85-bd83-c59d8e2ae99f

Note: If discrepancies exist, the loan file must show they have been explained or otherwise resolved. 6 Were any outstanding judgments appearing on the credit report listed on the application with an accompanying explanation and documentation?

VA_Guidelines.txt

f942235b-6840-4c3e-9f3a-95459e3d3ce8

Note: When there is a delinquency or judgment involving debt to the Federal Government, evidence must be provided showing the delinquent account was brought current or satisfactory arrangements were made between the borrower and the Federal agency owed, or the judgment was paid or otherwise satisfied. 7 Does the loan file contain required tax returns?

VA_Guidelines.txt

f1a2a126-3eb4-4dda-bb98-d92c3b74d3a5

Note: If the borrower is self-employed, the loan file must include 2 years of tax returns and a profit and loss statement for year-to-date since the end of the last fiscal year, and a current balance sheet showing all assets and liabilities

VA_Guidelines.txt

8e4fe1d1-b40e-4cba-9630-764647b22115

. 8 Was the Closing Disclosure accurately prepared and properly certified? 9 Were fees charged to the Veteran appropriate and accurate? 10 Was the loan properly documented and submitted in accordance with VA standardized loan file set-up procedure? 11 Was the loan current at the time it was submitted to VA for guaranty

VA_Guidelines.txt

ef41e879-e6f4-4672-a3ee-6654395b9cbd

? 12 Did the borrower transfer the property at the time of closing or soon after, indicating possible misuse of the Veteran’s loan entitlement? 13 Were all conflicting information or discrepancies resolved and properly documented in writing prior to submission of the loan to VA for guaranty? 1-44 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 15

VA_Guidelines.txt

a411d55a-d50b-461b-9dfe-0e69d4c5f917

.

VA_Guidelines.txt

4a5b4274-0bdb-4fe2-9ff5-cf9923967c4f

Application Checklist for Authority to Close Loans on an Automatic Basis, continued a.

VA_Guidelines.txt

f5880969-4397-449e-a3c5-12214b34b7e6

Checklist, Agent Experience continued Documentation A copy of the VA letter approving the firm as an agent for the sponsoring lender; a letter from a senior officer of the lender indicating the number of VA loans submitted and compliance with VA requirements and procedures; and a copy of the corporate resolution.

VA_Guidelines.txt

0b533bea-2bd7-49f3-a75d-597b0f0715c8

Experience requirement Firm actively operating as an agent for an automatic lender for 2 years, and originated a minimum of ten VA loans; or, Firm actively operating as an agent for an automatic lender for less than 2 years, and originated a minimum of 25 VA loans

VA_Guidelines.txt

08384a64-42d3-4b51-b2d6-10133b341264

. 2) Underwriter(s) Documentation VA Form 26-8736a completed by a senior officer outlining the underwriter’s specific experience with VA loans.

VA_Guidelines.txt

738a8991-bf63-4d8d-97b4-98dbcc442deb

If the underwriter is not located in the home office, provide certification from a senior officer that the underwriter is supervised by an individual other than a branch manager or other person with production responsibilities must be provided.

VA_Guidelines.txt

7d246929-773a-420c-8b5e-0c9829724fe3

Experience Requirement Minimum 3 years of experience in processing, pre-underwriting or underwriting mortgage loans, and at least 1 recent year of this experience making underwriting decisions on VA loans (recent = within the past three years); or, Accredited Residential Underwriter (ARU) by the Mortgage Bankers Association

VA_Guidelines.txt

13bdcb24-a673-4696-8070-bc50d262ea23

. 3) Working Capital or Net Worth A minimum of $50,000 in working capital must be demonstrated; or Lender has $250,000 net worth and reported by CPA in annual financial statements (see Topic 14 of this chapter).

VA_Guidelines.txt

b00c2ab7-36bd-47e4-b5c2-ca0638a94645

Continued on next page 1-46 VA Pamphlet 26-7, Revised Chapter 1: Lender Approval Guidelines 15. Application Checklist for Authority to Close Loans on an Automatic Basis, continued a.

VA_Guidelines.txt

3bc2f96a-b8e9-41ad-83f1-64dbe2647078

Checklist, 4) Financial Statements audited and certified by a CPA and current to continued within 6 months of the application date

VA_Guidelines.txt

d70049cd-5d92-4211-bc3a-49af631ae033

. 5) Line of Credit of at Least $1 Million Dollars 6) Two Permanent Investors with addresses, telephone numbers and name(s) of contact person(s) 7) Quality Control Plan That Meets VA Requirements (see Topic 14 of this chapter) 8) Designated Liaison Officer 9) Corporate Resolutions and Delinquency Data for Affiliates 10) List of Branch Offices or Corporate Resolutions for Agents 11) Application Fee

VA_Guidelines.txt

1d3b65b7-9b54-4ac5-8858-895ce6865574

Resolutions for Agents 11) Application Fee Submitted 1-47 CHAPTER 2: VETERAN’S ELIGIBILITY AND ENTITLEMENT Overview Topic Title Page 1 How to Establish the Applicant’s Eligibility for a VA Loan 2-2 2 What the Certificate of Eligibility Tells the Lender 2-4 3 How to Apply for a Certificate of Eligibility 2-7 4 Proof of Service Requirements 2-8 5 Basic Eligibility Requirements 2-10 6 Restoration of

VA_Guidelines.txt

7f0b052b-cb1d-4a42-8f33-0522b49dc400

Eligibility Requirements 2-10 6 Restoration of Previously Used Entitlement 2-13 7 Misuse of Veteran’s Entitlement 2-14 2-1 VA Lenders Handbook M26-7 Chapter 2: Veteran’s Eligibility and Entitlement Topic 1: How to Establish the Applicant’s Eligibility for a VA Loan Change Date: March 28, 2019 · This chapter has been revised in its entirety

VA_Guidelines.txt

65c28450-cf8a-4e59-8cf6-3738648e2b8e

. a.

VA_Guidelines.txt

e95697a2-8deb-4f68-a108-315a23fda912

What is Eligibility Eligibility means the Veteran meets the basic criteria of length of service (LOS) and character of service (COS) for the home loan benefit. Entitlement is the amount a Veteran has available for a guaranty on a loan. An eligible Veteran must still meet credit and income standards in order to qualify for a VA-guaranteed loan. b.

VA_Guidelines.txt

d12a7a90-1fb3-452b-ad5b-1b85dedfb3a0

The Lender’s Role The Certificate of Eligibility (COE) issued in WebLGY is the proof of eligibility for the lender. The lender must ensure the applicant is an eligible Veteran before an appraisal is ordered, the loan cannot be processed or closed. Lenders should never close a loan before they establish eligibility. VA cannot guarantee a loan for an ineligible Veteran.

VA_Guidelines.txt

6fd2538e-a7bf-4906-8014-77451b5d6e84

Once a COE is issued there may be conditions on the COE which must be met in order to receive a guaranty. The conditions that could appear on the COE are: · Active Duty Service Member (ADSM) - Valid unless discharged or released subsequent to date of this certificate. A certification of continuous active duty as of date of note is required.

VA_Guidelines.txt

5e416c82-c650-4cc7-9916-711d9392a315

This COE is not valid if the ADSM was discharged after the date of the certificate. In this instance, a new COE must be obtained. · Funding Fee – Please fax a copy of VA Form 26-8937 to the Regional Loan Center (RLC) of Jurisdiction. Please have the lender contact the RLC for loan processing. · Funding Fee – Veteran is not exempt from funding fee due to non service-connected pension.

VA_Guidelines.txt

23c50592-e997-4557-b8ab-63707552cdb4

Loan application will require prior approval processing by VA. · Reserve or National Guard Member – Valid unless discharged or released subsequent to the date of this certificate.

VA_Guidelines.txt

c61c20b9-65ca-464c-a5cc-b9e0c65a57b0

A certification of continuous service in the Selected Reserve or National Guard as of the date of the note is required. · Reserve/National Guard Funding Fee – Entitlement is based on service in the Selected Reserve and/or National Guard so an increased funding fee is required

VA_Guidelines.txt

8bc906cc-8192-464a-b3ef-b0c0e4ff33e1

. · Refinance Restoration – Restored entitlement previously used or charged for a VA Loan Identification Number (LIN) as shown here is available only for use in connection with the property which secured that loan. · One-Time Restoration – Entitlement previously used for a VA LIN has been restored without disposal of the property, under provision of 38 U.

VA_Guidelines.txt

7e1b3af6-f54f-4f4a-8679-30b5dc943d9c

S. C. 3702 (b)(4). Any future restoration requires disposal of all property obtained with a VA loan. · Subsequent Use Funding Fee – Entitlement code of “5” indicates previously used entitlement has been restored. The Veteran must pay a subsequent use funding fee on any future loan unless the Veteran is exempt.

VA_Guidelines.txt

401b2f40-9796-49fe-8ce5-f04856d37fb5

Continued on next page 2-2 VA Lenders Handbook M26-7 Chapter 2: Veteran’s Eligibility and Entitlement Topic 1: How to Establish the Applicant’s Eligibility for a VA Loan, continued b.

VA_Guidelines.txt

90d51cdf-2b4b-4b9c-803b-83c39ab3cd59

The Lender’s Role, continued · Surviving Spouse – Eligibility of the surviving spouse and the validity of guaranty entitlement hereby evidenced will be null and void if any change in marital status occurs, subsequent to the date of this COE and prior to the date a loan to the widow or widower is closed, unless the lender making the loan was not aware of any change in marital status and obtained

VA_Guidelines.txt

2c948bef-e3b8-496a-83c5-2e5edd609b6b

of any change in marital status and obtained on the date the loan closed an affidavit from the surviving spouse in the form prescribed by the Secretary

VA_Guidelines.txt

317e05fc-8281-4169-a50e-ad7c06c98069

. · Prisoner of War/Missing in Action (POW/MIA) – This certificate evidences eligibility under 38 U.

VA_Guidelines.txt

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S. C 3701 (b)(3) of the individual named as the spouse of a Servicemember missing in action or prisoner of war. Any unused entitlement will terminate automatically upon the receipt of official notice that the Servicemember is no longer in a category specified in 38 U. S.

VA_Guidelines.txt

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S. C. 3701 (b)(3) or upon dissolution of marriage. · Paid-in-Full Loan – Entitlement charged on a paid-in-full loan cannot be restored until the Veteran applies for restoration of entitlement.

VA_Guidelines.txt

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The lender shall submit the application electronically through VA’s Automated Certificate of Eligibility (ACE) online application. · Foreclosed Loan – Entitlement charged on a foreclosed loan cannot be restored until VA’s loss on the loan has been fully repaid. Information about repayment of the loss may be obtained by contacting an RLC.

VA_Guidelines.txt

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Although this chapter discusses some of the basic eligibility criteria, it is not intended to provide a lender with all the knowledge necessary to make an eligibility determination; consequently, all the various exceptions and nuances of eligibility are not included. Appendix 1-A at the end of this chapter provides a quick reference and overview of basic eligibility criteria.

VA_Guidelines.txt

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Lenders must use VA’s ACE online application to obtain the COE. Go to VA’s Information Portal (VIP) and select WebLGY from the applications toolbar; then select Eligibility and follow the prompts. In many cases, a COE can be generated in seconds. If not, lenders should select the link to submit an electronic application.

VA_Guidelines.txt

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This method allows lenders to upload supporting documentation and submit an application electronically to be processed by one of the RLCs. A Veteran can apply for a COE through eBenefits at http://www.ebenefits.va.gov or, if necessary, by completing VA Form 26-1880, Request for a Certificate of Eligibility and mailing it to the listed RLC. Simultaneous applications may delay COE processing.

VA_Guidelines.txt

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To ensure quicker responses, it is preferable to apply online. c. IRRRL Eligibility Determination VA systems will not generate a VA case number for an Interest Rate Reduction Refinancing Loan (IRRRL) if there is no record of an active VA loan.

VA_Guidelines.txt

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This means if a lender successfully obtains a case number for an IRRRL, a COE is not required. 2-3 VA Lenders Handbook M26-7 Chapter 2: Veteran’s Eligibility and Entitlement Topic 2: What the Certificate of Eligibility Tells the Lender Change Date: March 28, 2019 · This chapter has been revised in its entirety. a.

VA_Guidelines.txt

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Eligibility The lender may rely on a COE as proof the Veteran is eligible for the home loan benefit. Although eligible for the home loan benefit, Veterans must still qualify based on income and credit before loan approval is granted. b. Amount of Entitlement Entitlement is the amount available for use on a loan. The amount of basic entitlement is $36,000.

VA_Guidelines.txt

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The amount of basic entitlement is $36,000. This may be reduced if a Veteran has used entitlement before which has not been restored. The amount of basic entitlement will be displayed near the center of the COE. For example it may say: “THIS VETERAN’S BASIC ENTITLEMENT IS $______.

VA_Guidelines.txt

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TOTAL ENTITLEMENT CHARGED TO PREVIOUS VA LOANS IS $______.” For loans greater than $144,000, bonus entitlement may be available. For loans greater than $144,000, but less than $484,350, the entitlement is 25 percent. For loans greater than $484,350, the maximum entitlement is 25 percent of the loan limit, which can vary by county.

VA_Guidelines.txt

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For a list of loan limits by county, visit http://www.benefits.va.gov/homeloans/lenders.asp. Please note county limits can change yearly. VA will post the limits for each year on our website as they change. The Veteran may have entitlement for loans greater than $144,000, the COE does not reflect the bonus entitlement.

VA_Guidelines.txt

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Instead, an asterisk by the word “available” refers to a note, which explains the possibility of additional entitlement. If the Veteran previously used entitlement, which has not been restored, available entitlement is reduced by the amount used on the prior loan(s).

VA_Guidelines.txt

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The lender has three options in this situation: · Make the loan knowing that VA’s guaranty is limited to the amount of available entitlement, or · Have the Veteran apply for restoration of previously used entitlement, or · The Veteran may provide a downpayment in conjunction with their remaining entitlement.

VA_Guidelines.txt

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Continued on next page 2-4 VA Lenders Handbook M26-7 Chapter 2: Veteran’s Eligibility and Entitlement Topic 2: What the Certificate of Eligibility Tells the Lender, continued c. Funding Fee Field and Conditions on the COE The “funding fee” field appears near the top of the COE.

VA_Guidelines.txt

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The exemption status, either “exempt”, “non-exempt” or “contact RLC” will appear to the right of this field: · Exempt status indicates a Veteran is exempt from paying the funding fee. · Non-exempt status indicates a Veteran is not exempt from paying the funding fee

VA_Guidelines.txt

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. · Contact RLC indicates a system-generated determination is not available, or any loan may need to be submitted to VA as prior approval.

VA_Guidelines.txt

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Lenders must be sure to comply with all “conditions” appearing near the middle portion of the COE: · For COEs with “exempt” status, the following “conditions” may appear: □ Funding Fee – Veteran is exempt from the funding fee due to receipt of service- connected disability compensation of $______monthly

VA_Guidelines.txt

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. □ Funding Fee – Veteran is exempt from the funding fee due to receipt of service- connected disability compensation.

VA_Guidelines.txt

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Monthly compensation rate has not been determined to date. □ Funding Fee – Please fax a copy of VA Form 26-8937 to the VA RLC of jurisdiction. □ Funding Fee – Please have the lender contact the VA RLC for loan processing.

VA_Guidelines.txt

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Please fax a copy of VA Form 26-8937 to the RLC of jurisdiction. · For COEs with a “non-exempt” status, the following “conditions” may appear: □ Funding Fee – Veteran is not exempt from the funding fee. □ Funding Fee – Veteran is not exempt from the funding fee due to receipt of non- service-connected pension.

VA_Guidelines.txt

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Loan application will require prior approval processing by VA. · For COEs with “contact RLC” status, the following “condition” will appear: □ Funding Fee – Please fax a copy of VA Form 26-8937 to the RLC of jurisdiction of where the property is located. d. IRRRL Exemption Status The funding fee exemption status on IRRRLs is displayed in WebLGY at the time the case number is ordered. e.

VA_Guidelines.txt

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Exempt Status and Verified Income Lenders may rely on the “exempt” status appearing next to the “funding fee” field for verification of the funding fee exemption. If the dollar amount is different than what is shown on the COE, use the most recent bank statement or award disability award letter for verification.

VA_Guidelines.txt

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Additionally, on COEs with an “exempt” status, lenders may treat any service- connected disability income amount appearing in the “condition” section of the COE as verified income. There is no need to fax in VA Form 26-8937 to confirm the status or amount showing on the COE.

VA_Guidelines.txt

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Continued on next page 2-5 VA Lenders Handbook M26-7 Chapter 2: Veteran’s Eligibility and Entitlement Topic 2: What the Certificate of Eligibility Tells the Lender, continued c. Funding Fee Field and Conditions on the COE The “funding fee” field appears near the top of the COE.

VA_Guidelines.txt

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The exemption status, either “exempt”, “non-exempt” or “contact RLC” will appear to the right of this field: · Exempt status indicates a Veteran is exempt from paying the funding fee. · Non-exempt status indicates a Veteran is not exempt from paying the funding fee

VA_Guidelines.txt

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. · Contact RLC indicates a system-generated determination is not available, or any loan may need to be submitted to VA as prior approval.

VA_Guidelines.txt

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Lenders must be sure to comply with all “conditions” appearing near the middle portion of the COE: · For COEs with “exempt” status, the following “conditions” may appear: □ Funding Fee – Veteran is exempt from the funding fee due to receipt of service- connected disability compensation of $______monthly

VA_Guidelines.txt

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. □ Funding Fee – Veteran is exempt from the funding fee due to receipt of service- connected disability compensation.

VA_Guidelines.txt

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Monthly compensation rate has not been determined to date. □ Funding Fee – Please fax a copy of VA Form 26-8937 to the VA RLC of jurisdiction. □ Funding Fee – Please have the lender contact the VA RLC for loan processing.

VA_Guidelines.txt