Mitchell6024/quickb · Datasets at Hugging Face

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d8486c9e-a8c5-4629-b4b7-1986a3c253d6	Continued on next page 4 38 USC § 3710(b)(8) 5 38 USC § 3710(e)(1)(C) 6 38 USC § 3710(d)(2) 7 38 USC § 3729 3-7 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 3: Maximum Loan Amount, continued Table 2: VA Maximum Loan Amount Table, continued Exception Maximum Loan Other loans to refinance: The lesser of: · an installment land sales (1) VA reasonable value, or contract, or (2)	VA_Guidelines.txt
9dc13896-dd21-470c-b5b8-d9e057ff8ef6	(1) VA reasonable value, or contract, or (2) the sum of the outstanding balance of the loan · a loan assumed by the plus allowable closing costs and discounts plus Veteran at an interest rate the cost of any energy efficiency higher than that for the improvements up to $6,000	VA_Guidelines.txt
3b881cff-0184-4c64-85be-0e16780b5feb	. proposed refinancing loan. (+) plus the VA funding fee (unless the borrower is exempt).	VA_Guidelines.txt
63761292-3b7e-49b2-b47f-166c804c7433	Graduated Payment Mortgage The VA reasonable value, (GPM) loan on existing property. (-) minus the highest amount of negative amortization, (+) plus the cost of any energy efficiency improvements up to $6,000, (+) plus VA funding fee (unless the borrower is exempt). See chapter 7 for additional information.	VA_Guidelines.txt
685675e0-f069-49ed-9225-518cde4212c7	See chapter 7 for additional information. GPM loan on new home 97.5 percent lesser of: (1) the VA reasonable value, or (2) the purchase price plus the cost of any energy efficiency improvements up to $6,000. (+) plus the VA funding fee. See chapter 7 for additional information. b.	VA_Guidelines.txt
3384215a-a8fb-41d3-a822-d797ba55efea	Down payment Because VA loans can be for the full reasonable value of the property, no down payment is required by VA except in the following circumstances: · If the purchase price exceeds the reasonable value of the property, a down payment in the amount of the difference must be made in cash from the borrower’s own resources⁸, and · VA requires a downpayment on all GPMs⁹.	VA_Guidelines.txt
83f49a6b-0457-4cc9-9af0-820a16db2407	If a Veteran has less than full entitlement available, a lender may require a down payment in order to make the Veteran a loan that meets GNMA or other secondary market requirements.	VA_Guidelines.txt
c835bc4d-6388-4115-829d-bca16f877767	Lenders should consult with their investor to determine the amount of coverage required and down payment necessary to meet these requirements. 8 38 CFR 36.4339(a)(3), 36.4340(h) 9 38 CFR 36	VA_Guidelines.txt
72c09ed5-2866-4368-9d19-7f8c552deb12	.4310(e)(2)(i) 3-8 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 3: Maximum Loan Amount, continued Table 2: VA Maximum Loan Amount Table, continued Exception Maximum Loan Other loans to refinance: The lesser of: · an installment land sales (1) VA reasonable value, or contract, or (2) the sum of the outstanding balance of the loan · a loan assumed by the plus allowable closing	VA_Guidelines.txt
367e6643-3010-4bd1-ad2b-45a3996b617f	· a loan assumed by the plus allowable closing costs and discounts plus Veteran at an interest rate the cost of any energy efficiency higher than that for the improvements up to $6,000	VA_Guidelines.txt
6b920234-f3f0-4e49-95ba-0612f7c2a2fe	. proposed refinancing loan. (+) plus the VA funding fee (unless the borrower is exempt).	VA_Guidelines.txt
e0414e1c-e2d4-451a-9986-9af7ea2e80c2	Graduated Payment Mortgage The VA reasonable value, (GPM) loan on existing property. (-) minus the highest amount of negative amortization, (+) plus the cost of any energy efficiency improvements up to $6,000, (+) plus VA funding fee (unless the borrower is exempt). See chapter 7 for additional information.	VA_Guidelines.txt
36096451-94d6-452b-bee7-87ae20c19134	See chapter 7 for additional information. GPM loan on new home 97.5 percent lesser of: (1) the VA reasonable value, or (2) the purchase price plus the cost of any energy efficiency improvements up to $6,000. (+) plus the VA funding fee. See chapter 7 for additional information. b.	VA_Guidelines.txt
9b1ea846-ace5-4e0c-b7de-36f9242da3b7	Down payment Because VA loans can be for the full reasonable value of the property, no down payment is required by VA except in the following circumstances: · If the purchase price exceeds the reasonable value of the property, a down payment in the amount of the difference must be made in cash from the borrower’s own resources⁸, and · VA requires a downpayment on all GPMs⁹.	VA_Guidelines.txt
773d6f40-f670-46a9-9f2b-f36bdd29e77a	If a Veteran has less than full entitlement available, a lender may require a down payment in order to make the Veteran a loan that meets GNMA or other secondary market requirements.	VA_Guidelines.txt
d0987604-bc93-46a0-8c62-2e3e8728594e	Lenders should consult with their investor to determine the amount of coverage required and down payment necessary to meet these requirements. 8 38 CFR 36.4339(a)(3), 36.4340(h) 9 38 CFR 36.4310(e)(2)(i) 3-8 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 4: Maximum Guaranty on VA Loans Change Date: May 14, 2024 · This topic has been updated to reflect the implementation of P.	VA_Guidelines.txt
042c85b1-f193-4359-bfc3-4aeb4b98dfa6	L. 116-23 Blue Water Navy Vietnam Veterans Act of 2019. · Section b was added to provide additional information on calculating remaining entitlement for Veterans with partial, or encumbered, entitlement. a.	VA_Guidelines.txt
17a24d61-8346-43fe-822a-a3a47d15aa59	Maximum Guaranty Table Public Law 116-23, the Blue Water Navy Vietnam Veterans Act of 2019 increased the maximum guaranty available on loans closed after January 1, 2020, for Veterans with full entitlement. For Veterans with full entitlement, the maximum amount of guaranty entitlement available to the Veteran, for a loan amount above $144,000 is 25 percent of the loan amount¹⁰.	VA_Guidelines.txt
b0939f44-4c12-4c05-acee-d09739e456d4	In general, maximum guaranty, assuming the Veteran has full entitlement, is as shown in the table below. Table 3: Maximum Potential Guaranty by Loan Amount Loan Amount Maximum Potential Guaranty Special Provisions Up to $45,000 50 percent of the loan amount.	VA_Guidelines.txt
97d9cb4b-2440-4de0-a56e-adb8c5ed60ee	Minimum guaranty of 25 percent on IRRRLs	VA_Guidelines.txt
934b00f3-b25d-44a5-93d8-15482384116b	. $45,001 to $56,250 $22,500 Minimum guaranty of 25 percent on IRRRLs $56,251 to $144,000 40 percent of the loan amount, Minimum guaranty of 25 with a maximum of $36,000 percent on IRRRLs $144,001 to $417,000 25 percent of the loan amount Minimum guaranty of 25 percent on IRRRLs Greater than $417,000 The lesser of: Minimum guaranty of 25 · 25 percent of the VA percent on IRRRLs county loan limit,	VA_Guidelines.txt
b69e736d-f5ea-4f42-8b0e-ee78209d0b2e	of the VA percent on IRRRLs county loan limit, or · 25 percent of the loan amount Note: The percentage and amount of guaranty is based on the loan amount including the funding fee portion when the fee is paid from loan proceeds, subject to maximum loan limitations in Topic 3 of this chapter	VA_Guidelines.txt
d29568c9-2ca2-46db-a7aa-48b571ee2a5b	.	VA_Guidelines.txt
0231b3b1-3acf-4eb8-aedc-626cca0541db	For the maximum guaranty on joint loans made to a Veteran and a non-Veteran to whom they are not married, refer to Chapter 7. For the maximum guaranty on loans for manufactured homes that are not permanently affixed (i.e., not considered real estate) see 38 U. S. C. 3712 and/or contact VA.	VA_Guidelines.txt
cbe371da-b7e2-40f0-8a94-1081ca14b010	S. C. 3712 and/or contact VA. Continued on next page 1038 USC § 3703(a)(1)(A)(i)(IV) 3-9 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 4: Maximum Guaranty Amount, continued b.	VA_Guidelines.txt
dcd6ad88-83a0-4c0f-8811-625faf0816af	Veterans with Partial Entitlement Maximum loan amount calculations in Topic 3 of this chapter notwithstanding, VA does not set specific maximum loan amount limits for Veterans with partial or unrestored entitlement.	VA_Guidelines.txt
d62d92bb-2926-4506-a474-c1db6e5d16c3	For Veterans with partial or unrestored entitlement, their maximum available guaranty entitlement is reduced by the amount of the Veteran’s unrestored entitlement, which may impact the maximum potential guaranty a lender would receive on a concurrent loan made to the Veteran.	VA_Guidelines.txt
f1109b16-a51b-4f71-8f39-280d9ef20aa9	The calculation is as follows: For proposed loan amounts over $144,000¹¹: the maximum amount of guaranty entitlement available is 25% of the single-unit Freddie Mac Conforming Loan Limit (CLL) for the county where the proposed subject property is located reduced by the amount of unrestored entitlement.	VA_Guidelines.txt
ae7bdee2-0af8-4657-98d7-20e5a6412e61	Example: A Veteran with an existing VA-guaranteed loan using $55,000 of their guaranty entitlement is moving to another state and wishes to purchase a new home. The Veteran has opted to retain their existing VA-guaranteed loan; therefore, the entitlement used on that loan cannot be restored. The total loan amount for the new home is above $144,000.	VA_Guidelines.txt
ba8b34fb-9c97-4be0-8bc4-58dd4fc12c7d	The single- unit CLL in the county where the new subject property is located, on the anticipated date of closing is $650,000. Maximum Entitlement Amount Calculation: $650,000 x 25% = $162,500 - $55,000 (unrestored entitlement) = $107,500 The maximum guaranty available to the lender for this loan is $107,500.	VA_Guidelines.txt
25b12ee8-6880-4512-8693-c36c25b5eb09	For proposed loan amounts less than or equal to $144,000¹²: the maximum amount of guaranty entitlement is $36,000 reduced by the amount of unrestored entitlement. VA refers to the first $36,000 of a Veteran’s entitlement as their “basic” entitlement.	VA_Guidelines.txt
6cac8972-841e-4c5d-9357-158f8b1bd31e	Example: A Veteran with an existing VA-guaranteed loan using $55,000 of their guaranty entitlement is moving to another state and wishes to purchase a new home. The Veteran has opted to retain their existing VA-guaranteed loan; therefore, the entitlement used on that loan cannot be restored. The total loan amount for the new home is less than $144,000.	VA_Guidelines.txt
76d485d4-c45b-41c4-bdbc-f9fd8a0a7f52	Maximum Entitlement Amount Calculation: $36,000 - $55,000 = $0 (rounded to the nearest positive number). No guaranty entitlement is available for this loan. As the amount of available remaining basic entitlement is $0, the Veteran cannot use their VA home loan benefit to guaranty the new loan without obtaining restoration of entitlement for their current VA-guaranteed loan.	VA_Guidelines.txt
fea177b4-cf7c-4ddb-b72f-1e7d1058c2d6	See Chapter 2 for more information on restorations of entitlement. 11 38 USC § 3703(a)(1)(C)(ii) 12 38 USC § 3703(a)(1)(B) 3-10 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 5: Occupancy Change Date: May 14, 2024 · This section has been updated to make minor grammatical edits and add footnotes. · References to the Regional Loan Center (RLC) have been removed from this section	VA_Guidelines.txt
2cb98723-bcfa-41ca-8969-4bd0c97a7689	. · Section i has been updated to remove the reference to VA Form 26-1802a as the form was discontinued. a.	VA_Guidelines.txt
3574e980-900c-455a-9ebf-4384afbd5da9	The Law on Occupancy The law requires a Veteran obtaining a VA-guaranteed loan to certify that they intend to personally occupy the property as their home.	VA_Guidelines.txt
0f7ff18b-1eb6-4cca-9065-a027c2b2cb8a	As of the date of certification, the Veteran must either: · personally live in the property as their home, or · intend, upon completion of the loan and acquisition of the dwelling, to personally move into the property and use it as his or her home within a reasonable time¹³. The above requirement applies to all types of VA-guaranteed loans except IRRRLs.	VA_Guidelines.txt
9895d38d-3fd5-41d4-ad95-dab3ddc2c99b	For IRRRLs, the Veteran need only certify that they previously occupied the property as their home¹⁴. Example: A Veteran living in a home purchased with a VA loan is transferred to a duty station overseas. The Veteran rents out the home. They may refinance the VA loan with an IRRRL based on previous occupancy of the home. b.	VA_Guidelines.txt
0c69faa4-87cd-41b9-9a84-321f8c7f1839	What is a “Reasonable Time?” Occupancy within a “reasonable time" means within 60 days after the loan closing.	VA_Guidelines.txt
49816990-ab0b-4354-b5d5-98adce743600	More than 60 days may be considered reasonable if both of the following conditions are met: · the Veteran certifies that they will personally occupy the property as their home at a specific date after loan closing, and · there is a particular future event that will make it possible for the Veteran to personally occupy the property as their home on a specific future date.	VA_Guidelines.txt
c642624e-7d1c-4e3a-b561-be60e3aef48b	Occupancy at a date beyond 12 months after loan closing generally cannot be considered reasonable by VA. Continued on next page 13 38 U. S. Code § 3704(c)(1) 14 38 U. S.	VA_Guidelines.txt
f41404de-b8ee-4e4b-9c94-c20ef5ec98c3	Code § 3710(e)(1)(F) 3-11 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 5: Occupancy Change Date: May 14, 2024 · This section has been updated to make minor grammatical edits and add footnotes. · References to the Regional Loan Center (RLC) have been removed from this section	VA_Guidelines.txt
5936d20e-6b94-4714-80e4-9770894f6fa8	. · Section i has been updated to remove the reference to VA Form 26-1802a as the form was discontinued. a.	VA_Guidelines.txt
9db4df9d-7e6f-4a93-b0e2-008b14492fcd	The Law on Occupancy The law requires a Veteran obtaining a VA-guaranteed loan to certify that they intend to personally occupy the property as their home.	VA_Guidelines.txt
45fcf86a-b95d-4998-8821-4994f94ab092	As of the date of certification, the Veteran must either: · personally live in the property as their home, or · intend, upon completion of the loan and acquisition of the dwelling, to personally move into the property and use it as his or her home within a reasonable time¹³. The above requirement applies to all types of VA-guaranteed loans except IRRRLs.	VA_Guidelines.txt
7aefa3aa-86aa-4520-ae3f-289663fb4edb	For IRRRLs, the Veteran need only certify that they previously occupied the property as their home¹⁴. Example: A Veteran living in a home purchased with a VA loan is transferred to a duty station overseas. The Veteran rents out the home. They may refinance the VA loan with an IRRRL based on previous occupancy of the home. b.	VA_Guidelines.txt
e6761566-180f-4c9d-8626-76a05465c7da	What is a “Reasonable Time?” Occupancy within a “reasonable time" means within 60 days after the loan closing.	VA_Guidelines.txt
0d7e88b4-2c04-4ef1-934c-1cf56cd6af63	More than 60 days may be considered reasonable if both of the following conditions are met: · the Veteran certifies that they will personally occupy the property as their home at a specific date after loan closing, and · there is a particular future event that will make it possible for the Veteran to personally occupy the property as their home on a specific future date.	VA_Guidelines.txt
64e2c0f9-84bb-476d-b2e5-f109fbbe509e	Occupancy at a date beyond 12 months after loan closing generally cannot be considered reasonable by VA. Continued on next page 13 38 U. S. Code § 3704(c)(1) 14 38 U. S. Code § 3710(e)(1)(F) 3-11 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 5: Occupancy, continued c.	VA_Guidelines.txt
a0c7109a-5025-479e-889b-5544fdafcdf1	Occupancy by Veteran’s Spouse or Dependent Child Occupancy (or intent to occupy) by the spouse or dependent child satisfies the occupancy requirement for a Veteran who is on active duty and cannot personally occupy the dwelling within a reasonable time.	VA_Guidelines.txt
9bee9583-d0aa-459e-b561-581ecbd75f7f	In the case of a dependent child, the Veteran’s attorney-in-fact or legal guardian of the dependent child must make the certification¹⁵ and sign VA Form 26- 1820, Report and Certification of Loan Disbursement. Occupancy by the spouse may also satisfy the requirement if the Veteran cannot personally occupy the dwelling within a reasonable time due to distant employment other than military service.	VA_Guidelines.txt
1293553d-2f27-42ea-b8c6-32ab5302ddb9	In these specific cases, contact VA to determine if this type of occupancy meets VA requirements. Contact information is available in Appendix A. Note: The cost of maintaining separate living arrangements should be considered in underwriting the loan.	VA_Guidelines.txt
90423b74-c3d4-4d31-9f9c-9bd85e91ea5f	For an IRRRL, a certification that the spouse or dependent child (or children) previously occupied the dwelling as a home will satisfy the requirement. d. Occupancy Requirements for Deployed Active-Duty Service members Single or married Service members, while deployed from their permanent duty station, are in a temporary duty status and able to meet the occupancy requirement.	VA_Guidelines.txt
92580cb8-2f78-48a7-be83-08cc7df3095f	This is true without regard to whether a spouse will be available to occupy the property prior to the Veteran’s return from deployment. e.	VA_Guidelines.txt
5c64b3f1-c2cd-4eaf-ac4c-812e33605fc5	Occupancy After Retirement If the Veteran states that they will retire within 12 months and wants a loan to purchase a home in the retirement location: · Verify the Veteran’s eligibility for retirement on the specified date. □ Include a copy of the Veteran’s application for retirement submitted to their employer. · Carefully consider the applicant’s income after retirement	VA_Guidelines.txt
7010f721-ebbc-4a0e-a5c0-6c1289eaa375	. □ If retirement income alone is insufficient, obtain firm commitments from an employer that meet the usual stability of income requirements.	VA_Guidelines.txt
59e1d098-35d3-4222-8fbe-5e6bcfb77454	Note: Only retirement on a specific date within 12 months qualifies. Retirement “within the next few years” or “in the near future” is not sufficient. f.	VA_Guidelines.txt
380eaf97-df52-4e5d-8509-063d270dd5c9	Delayed Occupancy Due to Property Repairs or Improvements Home improvements or refinancing loans for extensive changes to the property which will prevent the Veteran from occupying the property while the work is being completed, constitute exceptions to the “reasonable time” requirement.	VA_Guidelines.txt
e65414be-db43-443c-adec-4885d2e0b073	The Veteran must certify that they intend to occupy or reoccupy the property as a home upon completion of the substantial improvements or repairs. Continued on next page 15 38 U. S. Code § 3704(c)(2) 3-12 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 5: Occupancy, continued g. Intermittent Occupancy The Veteran need not maintain a physical presence at the property daily.	VA_Guidelines.txt
39bf1e85-5588-4557-87cd-f412873c2b56	However, occupancy “as the Veteran’s home” implies that the home is located within reasonable proximity of the Veteran’s place of employment.	VA_Guidelines.txt
ef1d0c82-30b7-4d71-b8ee-9c49ed9908de	If the Veteran’s employment requires the Veteran’s absence from home a substantial amount of time, the following two conditions must be met: · the Veteran must have a history of continuous residence in the community, and · there must be no indication that the Veteran has established, intends to establish, or may be required to establish, a principal residence elsewhere.	VA_Guidelines.txt
476ea459-2596-4984-8dc1-1ed6710ec9b3	Use of the property as a seasonal vacation home does not satisfy the occupancy requirement. h. Unusual Circumstances Discuss unusual circumstances of occupancy with VA. Contact information is available in Appendix A. i.	VA_Guidelines.txt
26033ae6-9a26-4a7e-befd-a48489d682b6	The Certification The Veteran certifies that the occupancy requirement is met by properly executing VA Form 26-1820, Report and Certification of Loan Disbursement, at the time of loan closing (all loans). This satisfies the lender’s obligation to obtain the Veteran’s occupancy certification.	VA_Guidelines.txt
14fc6135-fccf-4868-a6e6-e9e8cd3f38af	The lender may accept the occupancy certification at face value unless there is specific information indicating the Veteran will not occupy the property as a home or does not intend to occupy within a reasonable time after loan closing. Where doubt exists, the test is whether a reasonable basis exists for concluding that the Veteran can and will occupy the property as certified.	VA_Guidelines.txt
352ab42e-33b6-4133-8634-3e6e3fd8ea05	Contact VA if the lender cannot resolve issues involving the veteran’s intent by applying this test.	VA_Guidelines.txt
aec7bc75-3290-4f23-9908-b8e228276818	Contact information is available in Appendix A. 3-13 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 6: Interest Rates Change Date: May 14, 2024 · This section has been updated to make minor grammatical edits. · Section b has been updated to ensure borrowers receive updated disclosures, as applicable, when the agreed upon interest rate changes. a.	VA_Guidelines.txt
66d74133-9f35-4ffe-885d-e6e9b65d5c58	Requirement VA does not prescribe interest rates for VA-guaranteed loans. The interest rate is negotiated between the Veteran-borrower and the lender to allow the Veteran to obtain the best available rate. b. Changes to the Agreed Upon Interest Rate The lender and borrower are expected to honor any lock-in or other agreements they have entered into which impact the interest rate on the loan.	VA_Guidelines.txt
1b6676ef-c7ab-48e4-abd3-be6de467dbc9	VA does not object to changes in the agreed upon rate, if no lender/borrower agreements are violated, and the borrower receives any necessary updated disclosures (such as the Loan Estimate and VA Refinancing Disclosures) reflecting the change in interest rate. The following procedure applies in such cases.	VA_Guidelines.txt
e1d35b8d-fd4a-4ad9-9317-e15b4b4b307f	The following procedure applies in such cases. Any increase in the interest rate of more than one percent requires: · re-underwriting to ascertain the Veteran’s continued ability to qualify for the loan, · documentation of the change, and · a new or corrected Uniform Residential Loan Application, (URLA) with any corrections initialed and dated by the borrower.	VA_Guidelines.txt
3c42f1d5-8515-47b1-ac18-0973440519f0	Reference: For prior approval loans, see chapter 5. 3-14 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 7: Discount Points Change Date: November 12, 2012 · This section has been updated to make minor grammatical edits. a. Requirement Veterans may pay reasonable discount points on VA-guaranteed loans. The amount of discount points is whatever the borrower and lender agree upon.	VA_Guidelines.txt
ba138ac7-8b00-4844-8bca-f8ed9f39b1b0	Discount points can be based on the principal amount of the loan after adding the VA funding fee, if the funding fee will be paid from loan proceeds. b. When Can Points be Included in the Loan?	VA_Guidelines.txt
4baf1169-3476-4c65-bd8d-ead6b1b80b52	When Can Points be Included in the Loan? Discount points may be rolled into the loan only in the case of refinancing loans, subject to the following limitations: Interest Rate Reduction Refinancing Loans A maximum of two discount points can be rolled into the loan. If the borrower pays more than two points, the remainder must be paid in cash. Refinancing of Construction Loans, etc.	VA_Guidelines.txt
e7d65564-5f09-465a-b364-4efcb1a8f2eb	Refinancing of Construction Loans, etc. Loans to refinance are: · a construction loan, · an installment land sales contract, or · a loan assumed by the veteran at an interest rate higher than that for the proposed refinancing loan.	VA_Guidelines.txt
88a6a252-0543-4a62-a078-aa2c83807fe8	Any reasonable amount of discount points may be rolled into the loan as long as the sum of the outstanding balance of the loan plus allowable closing costs and discount points does not exceed the VA reasonable value. Reference: See the maximum loan limitations in section 3 of this chapter.	VA_Guidelines.txt
c8741097-1ced-420b-9328-b5f708aff493	Cash-out Refinancing Loans While discount points cannot specifically be included in the loan amount, the borrower can receive cash from loan proceeds, subject to maximum loan limits (See section 3 of this chapter). The cash received by the borrower can be used for any purpose acceptable to the lender, including payment of reasonable discount points.	VA_Guidelines.txt
e4a1f0de-8e7c-4684-8c58-bbe792636a6d	Continued on next page 3-15 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 7: Discount Points, continued c. Changes to the Agreed Upon Discount Points The lender and borrower are expected to honor any agreements they have entered into which impact the discount points paid on the loan.	VA_Guidelines.txt
26d0dec5-eb6e-4c7c-b6be-6745d22788a6	VA does not object to changes in the agreed upon points, as long as no lender/borrower agreements are violated. The following procedures apply in such cases. Any increase in discount points requires: · verification that the borrower has sufficient assets to cover the increase, · documentation of the change, and · a new or corrected URLA with any corrections initialed and dated by the borrower.	VA_Guidelines.txt
859ae985-b7b6-4526-944b-33f65f8b71fa	Reference: For prior approval loans, see chapter 5. 3-16 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 8: Maturity Change Date: April 10, 2009 · This section has been updated to correct hyperlinks and make minor grammatical edits. a. Maximum Maturity · Amortized loans: 30 years and 32 days, · Nonamortized loans: 5 years.	VA_Guidelines.txt
c454d347-146a-4284-a61b-0f24d9fb6463	In addition, every loan must be repayable within the estimated economic life of the property securing the loan. The period for repayment of a loan is measured from the date of the note or other evidence of indebtedness. b. Maturity Extending Beyond the Maximum VA regulations provide that any amounts, which fall due beyond the maximum maturity automatically, fall due on the maximum maturity date.	VA_Guidelines.txt
cb618197-f9dd-4379-970f-680dc2d2b7ae	Thus, if a lender inadvertently makes a loan that exceeds the maximum maturity, it may still be subject to guaranty. However, the regulations also limit the amount that can be collected as a final installment, such as, they prohibit excessive ballooning.	VA_Guidelines.txt
62e55f94-8454-4229-8534-2a57a1d1aeb6	The holder of a loan that violates this provision may desire to correct the situation through means which are legally proper in the jurisdiction. 3-17 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 9: Amortization Change Date: November 8, 2012 · This section has been updated to correct hyperlinks and make minor grammatical edits. a.	VA_Guidelines.txt
cf0a1b80-dafd-4694-bd97-10c2a5b27c2a	Requirement All VA loans must be amortized if the maturity date is beyond 5 years from the date of the loan. Loans with terms less than 5 years are considered term loans and need not be amortized.	VA_Guidelines.txt
9e9185ef-56e9-4c7a-b730-8054037da1e9	Generally, for amortized VA loans: · payments must be approximately equal, · principal must be reduced at least once annually, and · the final installment must not exceed two times the average of the preceding installments.	VA_Guidelines.txt
22f22b68-6177-4a8a-a1c9-61f9dbe1d8be	Exceptions to these requirements are made in the case of: · GPMs – See chapter 7, · Growing Equity Mortgages (GEMs) – See chapter 7, · alternative amortization plans prior approved by VA, · and construction loans. b. Alternative Amortization Plans Certain amortization plans which do not meet the requirements described in subsection a above may be used if approved in advance by VA.	VA_Guidelines.txt
77473e95-fee1-4fda-a6d4-30502e65416e	A lender may submit an amortization plan to VA for prior approval if the plan: · is generally recognized; that is, is used extensively by established lending institutions, but · does not meet the requirements of approximately equal periodic payments and a reduction in principal not less often than annually. Exception: GPMs and GEMs. c.	VA_Guidelines.txt
05ad1782-adb7-4463-9195-d4e94ee139cd	Exception: GPMs and GEMs. c. Special Provisions for Construction Loans See “Amortization” in chapter 7. d. Standard and Springfield Plans The Standard and Springfield plans satisfy VA amortization requirements. · The Standard plan provides for equal payments over the life of the loan.	VA_Guidelines.txt
8073b5ff-22d9-4075-9139-18a630d9ed6d	The amount applied to interest decreases, with a corresponding increase in the amount applied to principal. · The Springfield plan provides for gradually decreasing payments over the life of the loan.	VA_Guidelines.txt
e3ee3963-756c-4f25-9cf0-f71f8d4f7189	The amount applied to interest decreases, while the amount applied to principal remains constant. 3-18 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 9: Amortization Change Date: November 8, 2012 · This section has been updated to correct hyperlinks and make minor grammatical edits. a.	VA_Guidelines.txt
e7656343-cbc5-4fc1-b747-02eaa9d2307e	Requirement All VA loans must be amortized if the maturity date is beyond 5 years from the date of the loan. Loans with terms less than 5 years are considered term loans and need not be amortized.	VA_Guidelines.txt
ba92a0f7-ce71-4758-9a40-5cd4ab3ffcdf	Generally, for amortized VA loans: · payments must be approximately equal, · principal must be reduced at least once annually, and · the final installment must not exceed two times the average of the preceding installments.	VA_Guidelines.txt
b5377a85-5ee2-481f-b686-641fc1b00742	Exceptions to these requirements are made in the case of: · GPMs – See chapter 7, · Growing Equity Mortgages (GEMs) – See chapter 7, · alternative amortization plans prior approved by VA, · and construction loans. b. Alternative Amortization Plans Certain amortization plans which do not meet the requirements described in subsection a above may be used if approved in advance by VA.	VA_Guidelines.txt
acedea4b-c66d-4f7d-a0f7-93fadd7f8ba3	A lender may submit an amortization plan to VA for prior approval if the plan: · is generally recognized; that is, is used extensively by established lending institutions, but · does not meet the requirements of approximately equal periodic payments and a reduction in principal not less often than annually. Exception: GPMs and GEMs. c.	VA_Guidelines.txt
f736670e-5051-41a0-83a0-c09488a24f76	Exception: GPMs and GEMs. c. Special Provisions for Construction Loans See “Amortization” in chapter 7. d. Standard and Springfield Plans The Standard and Springfield plans satisfy VA amortization requirements. · The Standard plan provides for equal payments over the life of the loan.	VA_Guidelines.txt
844c8d4e-8dbd-4d28-b8d7-f90a641fde4b	The amount applied to interest decreases, with a corresponding increase in the amount applied to principal. · The Springfield plan provides for gradually decreasing payments over the life of the loan.	VA_Guidelines.txt
186b3b51-9fc0-49e8-92c3-8b97333a2454	The amount applied to interest decreases, while the amount applied to principal remains constant. 3-18 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 10: Eligible Geographic Locations for the Secured Property Change Date: April 10, 2009 · This section has been updated to correct hyperlinks and make minor grammatical edits. a. Where Can the Property be Located?	VA_Guidelines.txt
50309274-34de-450e-b7f8-74c9a18fb721	Where Can the Property be Located? Real property securing a VA-guaranteed loan must be located in the United States, its territories, or possessions (Puerto Rico, Guam, Virgin Islands, American Samoa and the Northern Mariana Islands). 3-19 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 11: What Does a VA Guaranty Mean to the Lender?	VA_Guidelines.txt
3898f486-279c-400a-a803-eeba42a257ca	Change Date: November 8, 2012 · This section has been updated to make minor grammatical edits. a. Protection Against Loss VA guarantees a portion of the loan, identified on the VA Loan Guaranty Certificate (LGC) by percentage and dollar amounts.	VA_Guidelines.txt
1c459aef-4dd0-4e63-b869-27dc04976e2e	If a loss ultimately occurs on the loan, VA will reimburse the loan holder for all or part of such loss: · limited by the stated percentage and dollar amount of the guaranty, · limited by any VA maximums for reasonable and customary foreclosure expenses, and · subject to the lender’s compliance with applicable law and regulations. b.	VA_Guidelines.txt
7609ba8a-6b76-443c-b1d8-dcffd7b80733	Lender Responsibility It is the lender’s responsibility to comply with all laws and regulations related to the VA Home Loan program, and thereby prevent VA’s denial or reduction of a payment on a future claim.	VA_Guidelines.txt
7b688163-006c-4afc-8a0d-56026096a068	A lender can accomplish this by ensuring that its employees who perform work related to VA lending: · understand and comply with VA policies, procedures and regulations, and applicable law, and · direct questions to VA when issues arise that are not addressed in this handbook or other materials provided by VA. c. When is a Loan that was Closed Automatically Guaranteed?	VA_Guidelines.txt

d8486c9e-a8c5-4629-b4b7-1986a3c253d6

Continued on next page 4 38 USC § 3710(b)(8) 5 38 USC § 3710(e)(1)(C) 6 38 USC § 3710(d)(2) 7 38 USC § 3729 3-7 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 3: Maximum Loan Amount, continued Table 2: VA Maximum Loan Amount Table, continued Exception Maximum Loan Other loans to refinance: The lesser of: · an installment land sales (1) VA reasonable value, or contract, or (2)

VA_Guidelines.txt

9dc13896-dd21-470c-b5b8-d9e057ff8ef6

(1) VA reasonable value, or contract, or (2) the sum of the outstanding balance of the loan · a loan assumed by the plus allowable closing costs and discounts plus Veteran at an interest rate the cost of any energy efficiency higher than that for the improvements up to $6,000

VA_Guidelines.txt

3b881cff-0184-4c64-85be-0e16780b5feb

. proposed refinancing loan. (+) plus the VA funding fee (unless the borrower is exempt).

VA_Guidelines.txt

63761292-3b7e-49b2-b47f-166c804c7433

Graduated Payment Mortgage The VA reasonable value, (GPM) loan on existing property. (-) minus the highest amount of negative amortization, (+) plus the cost of any energy efficiency improvements up to $6,000, (+) plus VA funding fee (unless the borrower is exempt). See chapter 7 for additional information.

VA_Guidelines.txt

685675e0-f069-49ed-9225-518cde4212c7

See chapter 7 for additional information. GPM loan on new home 97.5 percent lesser of: (1) the VA reasonable value, or (2) the purchase price plus the cost of any energy efficiency improvements up to $6,000. (+) plus the VA funding fee. See chapter 7 for additional information. b.

VA_Guidelines.txt

3384215a-a8fb-41d3-a822-d797ba55efea

Down payment Because VA loans can be for the full reasonable value of the property, no down payment is required by VA except in the following circumstances: · If the purchase price exceeds the reasonable value of the property, a down payment in the amount of the difference must be made in cash from the borrower’s own resources⁸, and · VA requires a downpayment on all GPMs⁹.

VA_Guidelines.txt

83f49a6b-0457-4cc9-9af0-820a16db2407

If a Veteran has less than full entitlement available, a lender may require a down payment in order to make the Veteran a loan that meets GNMA or other secondary market requirements.

VA_Guidelines.txt

c835bc4d-6388-4115-829d-bca16f877767

Lenders should consult with their investor to determine the amount of coverage required and down payment necessary to meet these requirements. 8 38 CFR 36.4339(a)(3), 36.4340(h) 9 38 CFR 36

VA_Guidelines.txt

72c09ed5-2866-4368-9d19-7f8c552deb12

.4310(e)(2)(i) 3-8 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 3: Maximum Loan Amount, continued Table 2: VA Maximum Loan Amount Table, continued Exception Maximum Loan Other loans to refinance: The lesser of: · an installment land sales (1) VA reasonable value, or contract, or (2) the sum of the outstanding balance of the loan · a loan assumed by the plus allowable closing

VA_Guidelines.txt

367e6643-3010-4bd1-ad2b-45a3996b617f

· a loan assumed by the plus allowable closing costs and discounts plus Veteran at an interest rate the cost of any energy efficiency higher than that for the improvements up to $6,000

VA_Guidelines.txt

6b920234-f3f0-4e49-95ba-0612f7c2a2fe

. proposed refinancing loan. (+) plus the VA funding fee (unless the borrower is exempt).

VA_Guidelines.txt

e0414e1c-e2d4-451a-9986-9af7ea2e80c2

Graduated Payment Mortgage The VA reasonable value, (GPM) loan on existing property. (-) minus the highest amount of negative amortization, (+) plus the cost of any energy efficiency improvements up to $6,000, (+) plus VA funding fee (unless the borrower is exempt). See chapter 7 for additional information.

VA_Guidelines.txt

36096451-94d6-452b-bee7-87ae20c19134

See chapter 7 for additional information. GPM loan on new home 97.5 percent lesser of: (1) the VA reasonable value, or (2) the purchase price plus the cost of any energy efficiency improvements up to $6,000. (+) plus the VA funding fee. See chapter 7 for additional information. b.

VA_Guidelines.txt

9b1ea846-ace5-4e0c-b7de-36f9242da3b7

Down payment Because VA loans can be for the full reasonable value of the property, no down payment is required by VA except in the following circumstances: · If the purchase price exceeds the reasonable value of the property, a down payment in the amount of the difference must be made in cash from the borrower’s own resources⁸, and · VA requires a downpayment on all GPMs⁹.

VA_Guidelines.txt

773d6f40-f670-46a9-9f2b-f36bdd29e77a

If a Veteran has less than full entitlement available, a lender may require a down payment in order to make the Veteran a loan that meets GNMA or other secondary market requirements.

VA_Guidelines.txt

d0987604-bc93-46a0-8c62-2e3e8728594e

Lenders should consult with their investor to determine the amount of coverage required and down payment necessary to meet these requirements. 8 38 CFR 36.4339(a)(3), 36.4340(h) 9 38 CFR 36.4310(e)(2)(i) 3-8 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 4: Maximum Guaranty on VA Loans Change Date: May 14, 2024 · This topic has been updated to reflect the implementation of P.

VA_Guidelines.txt

042c85b1-f193-4359-bfc3-4aeb4b98dfa6

L. 116-23 Blue Water Navy Vietnam Veterans Act of 2019. · Section b was added to provide additional information on calculating remaining entitlement for Veterans with partial, or encumbered, entitlement. a.

VA_Guidelines.txt

17a24d61-8346-43fe-822a-a3a47d15aa59

Maximum Guaranty Table Public Law 116-23, the Blue Water Navy Vietnam Veterans Act of 2019 increased the maximum guaranty available on loans closed after January 1, 2020, for Veterans with full entitlement. For Veterans with full entitlement, the maximum amount of guaranty entitlement available to the Veteran, for a loan amount above $144,000 is 25 percent of the loan amount¹⁰.

VA_Guidelines.txt

b0939f44-4c12-4c05-acee-d09739e456d4

In general, maximum guaranty, assuming the Veteran has full entitlement, is as shown in the table below. Table 3: Maximum Potential Guaranty by Loan Amount Loan Amount Maximum Potential Guaranty Special Provisions Up to $45,000 50 percent of the loan amount.

VA_Guidelines.txt

97d9cb4b-2440-4de0-a56e-adb8c5ed60ee

Minimum guaranty of 25 percent on IRRRLs

VA_Guidelines.txt

934b00f3-b25d-44a5-93d8-15482384116b

. $45,001 to $56,250 $22,500 Minimum guaranty of 25 percent on IRRRLs $56,251 to $144,000 40 percent of the loan amount, Minimum guaranty of 25 with a maximum of $36,000 percent on IRRRLs $144,001 to $417,000 25 percent of the loan amount Minimum guaranty of 25 percent on IRRRLs Greater than $417,000 The lesser of: Minimum guaranty of 25 · 25 percent of the VA percent on IRRRLs county loan limit,

VA_Guidelines.txt

b69e736d-f5ea-4f42-8b0e-ee78209d0b2e

of the VA percent on IRRRLs county loan limit, or · 25 percent of the loan amount Note: The percentage and amount of guaranty is based on the loan amount including the funding fee portion when the fee is paid from loan proceeds, subject to maximum loan limitations in Topic 3 of this chapter

VA_Guidelines.txt

d29568c9-2ca2-46db-a7aa-48b571ee2a5b

.

VA_Guidelines.txt

0231b3b1-3acf-4eb8-aedc-626cca0541db

For the maximum guaranty on joint loans made to a Veteran and a non-Veteran to whom they are not married, refer to Chapter 7. For the maximum guaranty on loans for manufactured homes that are not permanently affixed (i.e., not considered real estate) see 38 U. S. C. 3712 and/or contact VA.

VA_Guidelines.txt

cbe371da-b7e2-40f0-8a94-1081ca14b010

S. C. 3712 and/or contact VA. Continued on next page 1038 USC § 3703(a)(1)(A)(i)(IV) 3-9 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 4: Maximum Guaranty Amount, continued b.

VA_Guidelines.txt

dcd6ad88-83a0-4c0f-8811-625faf0816af

Veterans with Partial Entitlement Maximum loan amount calculations in Topic 3 of this chapter notwithstanding, VA does not set specific maximum loan amount limits for Veterans with partial or unrestored entitlement.

VA_Guidelines.txt

d62d92bb-2926-4506-a474-c1db6e5d16c3

For Veterans with partial or unrestored entitlement, their maximum available guaranty entitlement is reduced by the amount of the Veteran’s unrestored entitlement, which may impact the maximum potential guaranty a lender would receive on a concurrent loan made to the Veteran.

VA_Guidelines.txt

f1109b16-a51b-4f71-8f39-280d9ef20aa9

The calculation is as follows: For proposed loan amounts over $144,000¹¹: the maximum amount of guaranty entitlement available is 25% of the single-unit Freddie Mac Conforming Loan Limit (CLL) for the county where the proposed subject property is located reduced by the amount of unrestored entitlement.

VA_Guidelines.txt

ae7bdee2-0af8-4657-98d7-20e5a6412e61

Example: A Veteran with an existing VA-guaranteed loan using $55,000 of their guaranty entitlement is moving to another state and wishes to purchase a new home. The Veteran has opted to retain their existing VA-guaranteed loan; therefore, the entitlement used on that loan cannot be restored. The total loan amount for the new home is above $144,000.

VA_Guidelines.txt

ba8b34fb-9c97-4be0-8bc4-58dd4fc12c7d

The single- unit CLL in the county where the new subject property is located, on the anticipated date of closing is $650,000. Maximum Entitlement Amount Calculation: $650,000 x 25% = $162,500 - $55,000 (unrestored entitlement) = $107,500 The maximum guaranty available to the lender for this loan is $107,500.

VA_Guidelines.txt

25b12ee8-6880-4512-8693-c36c25b5eb09

For proposed loan amounts less than or equal to $144,000¹²: the maximum amount of guaranty entitlement is $36,000 reduced by the amount of unrestored entitlement. VA refers to the first $36,000 of a Veteran’s entitlement as their “basic” entitlement.

VA_Guidelines.txt

6cac8972-841e-4c5d-9357-158f8b1bd31e

Example: A Veteran with an existing VA-guaranteed loan using $55,000 of their guaranty entitlement is moving to another state and wishes to purchase a new home. The Veteran has opted to retain their existing VA-guaranteed loan; therefore, the entitlement used on that loan cannot be restored. The total loan amount for the new home is less than $144,000.

VA_Guidelines.txt

76d485d4-c45b-41c4-bdbc-f9fd8a0a7f52

Maximum Entitlement Amount Calculation: $36,000 - $55,000 = $0 (rounded to the nearest positive number). No guaranty entitlement is available for this loan. As the amount of available remaining basic entitlement is $0, the Veteran cannot use their VA home loan benefit to guaranty the new loan without obtaining restoration of entitlement for their current VA-guaranteed loan.

VA_Guidelines.txt

fea177b4-cf7c-4ddb-b72f-1e7d1058c2d6

See Chapter 2 for more information on restorations of entitlement. 11 38 USC § 3703(a)(1)(C)(ii) 12 38 USC § 3703(a)(1)(B) 3-10 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 5: Occupancy Change Date: May 14, 2024 · This section has been updated to make minor grammatical edits and add footnotes. · References to the Regional Loan Center (RLC) have been removed from this section

VA_Guidelines.txt

2cb98723-bcfa-41ca-8969-4bd0c97a7689

. · Section i has been updated to remove the reference to VA Form 26-1802a as the form was discontinued. a.

VA_Guidelines.txt

3574e980-900c-455a-9ebf-4384afbd5da9

The Law on Occupancy The law requires a Veteran obtaining a VA-guaranteed loan to certify that they intend to personally occupy the property as their home.

VA_Guidelines.txt

0f7ff18b-1eb6-4cca-9065-a027c2b2cb8a

As of the date of certification, the Veteran must either: · personally live in the property as their home, or · intend, upon completion of the loan and acquisition of the dwelling, to personally move into the property and use it as his or her home within a reasonable time¹³. The above requirement applies to all types of VA-guaranteed loans except IRRRLs.

VA_Guidelines.txt

9895d38d-3fd5-41d4-ad95-dab3ddc2c99b

For IRRRLs, the Veteran need only certify that they previously occupied the property as their home¹⁴. Example: A Veteran living in a home purchased with a VA loan is transferred to a duty station overseas. The Veteran rents out the home. They may refinance the VA loan with an IRRRL based on previous occupancy of the home. b.

VA_Guidelines.txt

0c69faa4-87cd-41b9-9a84-321f8c7f1839

What is a “Reasonable Time?” Occupancy within a “reasonable time" means within 60 days after the loan closing.

VA_Guidelines.txt

49816990-ab0b-4354-b5d5-98adce743600

More than 60 days may be considered reasonable if both of the following conditions are met: · the Veteran certifies that they will personally occupy the property as their home at a specific date after loan closing, and · there is a particular future event that will make it possible for the Veteran to personally occupy the property as their home on a specific future date.

VA_Guidelines.txt

c642624e-7d1c-4e3a-b561-be60e3aef48b

Occupancy at a date beyond 12 months after loan closing generally cannot be considered reasonable by VA. Continued on next page 13 38 U. S. Code § 3704(c)(1) 14 38 U. S.

VA_Guidelines.txt

f41404de-b8ee-4e4b-9c94-c20ef5ec98c3

Code § 3710(e)(1)(F) 3-11 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 5: Occupancy Change Date: May 14, 2024 · This section has been updated to make minor grammatical edits and add footnotes. · References to the Regional Loan Center (RLC) have been removed from this section

VA_Guidelines.txt

5936d20e-6b94-4714-80e4-9770894f6fa8

. · Section i has been updated to remove the reference to VA Form 26-1802a as the form was discontinued. a.

VA_Guidelines.txt

9db4df9d-7e6f-4a93-b0e2-008b14492fcd

The Law on Occupancy The law requires a Veteran obtaining a VA-guaranteed loan to certify that they intend to personally occupy the property as their home.

VA_Guidelines.txt

45fcf86a-b95d-4998-8821-4994f94ab092

As of the date of certification, the Veteran must either: · personally live in the property as their home, or · intend, upon completion of the loan and acquisition of the dwelling, to personally move into the property and use it as his or her home within a reasonable time¹³. The above requirement applies to all types of VA-guaranteed loans except IRRRLs.

VA_Guidelines.txt

7aefa3aa-86aa-4520-ae3f-289663fb4edb

For IRRRLs, the Veteran need only certify that they previously occupied the property as their home¹⁴. Example: A Veteran living in a home purchased with a VA loan is transferred to a duty station overseas. The Veteran rents out the home. They may refinance the VA loan with an IRRRL based on previous occupancy of the home. b.

VA_Guidelines.txt

e6761566-180f-4c9d-8626-76a05465c7da

What is a “Reasonable Time?” Occupancy within a “reasonable time" means within 60 days after the loan closing.

VA_Guidelines.txt

0d7e88b4-2c04-4ef1-934c-1cf56cd6af63

More than 60 days may be considered reasonable if both of the following conditions are met: · the Veteran certifies that they will personally occupy the property as their home at a specific date after loan closing, and · there is a particular future event that will make it possible for the Veteran to personally occupy the property as their home on a specific future date.

VA_Guidelines.txt

64e2c0f9-84bb-476d-b2e5-f109fbbe509e

Occupancy at a date beyond 12 months after loan closing generally cannot be considered reasonable by VA. Continued on next page 13 38 U. S. Code § 3704(c)(1) 14 38 U. S. Code § 3710(e)(1)(F) 3-11 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 5: Occupancy, continued c.

VA_Guidelines.txt

a0c7109a-5025-479e-889b-5544fdafcdf1

Occupancy by Veteran’s Spouse or Dependent Child Occupancy (or intent to occupy) by the spouse or dependent child satisfies the occupancy requirement for a Veteran who is on active duty and cannot personally occupy the dwelling within a reasonable time.

VA_Guidelines.txt

9bee9583-d0aa-459e-b561-581ecbd75f7f

In the case of a dependent child, the Veteran’s attorney-in-fact or legal guardian of the dependent child must make the certification¹⁵ and sign VA Form 26- 1820, Report and Certification of Loan Disbursement. Occupancy by the spouse may also satisfy the requirement if the Veteran cannot personally occupy the dwelling within a reasonable time due to distant employment other than military service.

VA_Guidelines.txt

1293553d-2f27-42ea-b8c6-32ab5302ddb9

In these specific cases, contact VA to determine if this type of occupancy meets VA requirements. Contact information is available in Appendix A. Note: The cost of maintaining separate living arrangements should be considered in underwriting the loan.

VA_Guidelines.txt

90423b74-c3d4-4d31-9f9c-9bd85e91ea5f

For an IRRRL, a certification that the spouse or dependent child (or children) previously occupied the dwelling as a home will satisfy the requirement. d. Occupancy Requirements for Deployed Active-Duty Service members Single or married Service members, while deployed from their permanent duty station, are in a temporary duty status and able to meet the occupancy requirement.

VA_Guidelines.txt

92580cb8-2f78-48a7-be83-08cc7df3095f

This is true without regard to whether a spouse will be available to occupy the property prior to the Veteran’s return from deployment. e.

VA_Guidelines.txt

5c64b3f1-c2cd-4eaf-ac4c-812e33605fc5

Occupancy After Retirement If the Veteran states that they will retire within 12 months and wants a loan to purchase a home in the retirement location: · Verify the Veteran’s eligibility for retirement on the specified date. □ Include a copy of the Veteran’s application for retirement submitted to their employer. · Carefully consider the applicant’s income after retirement

VA_Guidelines.txt

7010f721-ebbc-4a0e-a5c0-6c1289eaa375

. □ If retirement income alone is insufficient, obtain firm commitments from an employer that meet the usual stability of income requirements.

VA_Guidelines.txt

59e1d098-35d3-4222-8fbe-5e6bcfb77454

Note: Only retirement on a specific date within 12 months qualifies. Retirement “within the next few years” or “in the near future” is not sufficient. f.

VA_Guidelines.txt

380eaf97-df52-4e5d-8509-063d270dd5c9

Delayed Occupancy Due to Property Repairs or Improvements Home improvements or refinancing loans for extensive changes to the property which will prevent the Veteran from occupying the property while the work is being completed, constitute exceptions to the “reasonable time” requirement.

VA_Guidelines.txt

e65414be-db43-443c-adec-4885d2e0b073

The Veteran must certify that they intend to occupy or reoccupy the property as a home upon completion of the substantial improvements or repairs. Continued on next page 15 38 U. S. Code § 3704(c)(2) 3-12 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 5: Occupancy, continued g. Intermittent Occupancy The Veteran need not maintain a physical presence at the property daily.

VA_Guidelines.txt

39bf1e85-5588-4557-87cd-f412873c2b56

However, occupancy “as the Veteran’s home” implies that the home is located within reasonable proximity of the Veteran’s place of employment.

VA_Guidelines.txt

ef1d0c82-30b7-4d71-b8ee-9c49ed9908de

If the Veteran’s employment requires the Veteran’s absence from home a substantial amount of time, the following two conditions must be met: · the Veteran must have a history of continuous residence in the community, and · there must be no indication that the Veteran has established, intends to establish, or may be required to establish, a principal residence elsewhere.

VA_Guidelines.txt

476ea459-2596-4984-8dc1-1ed6710ec9b3

Use of the property as a seasonal vacation home does not satisfy the occupancy requirement. h. Unusual Circumstances Discuss unusual circumstances of occupancy with VA. Contact information is available in Appendix A. i.

VA_Guidelines.txt

26033ae6-9a26-4a7e-befd-a48489d682b6

The Certification The Veteran certifies that the occupancy requirement is met by properly executing VA Form 26-1820, Report and Certification of Loan Disbursement, at the time of loan closing (all loans). This satisfies the lender’s obligation to obtain the Veteran’s occupancy certification.

VA_Guidelines.txt

14fc6135-fccf-4868-a6e6-e9e8cd3f38af

The lender may accept the occupancy certification at face value unless there is specific information indicating the Veteran will not occupy the property as a home or does not intend to occupy within a reasonable time after loan closing. Where doubt exists, the test is whether a reasonable basis exists for concluding that the Veteran can and will occupy the property as certified.

VA_Guidelines.txt

352ab42e-33b6-4133-8634-3e6e3fd8ea05

Contact VA if the lender cannot resolve issues involving the veteran’s intent by applying this test.

VA_Guidelines.txt

aec7bc75-3290-4f23-9908-b8e228276818

Contact information is available in Appendix A. 3-13 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 6: Interest Rates Change Date: May 14, 2024 · This section has been updated to make minor grammatical edits. · Section b has been updated to ensure borrowers receive updated disclosures, as applicable, when the agreed upon interest rate changes. a.

VA_Guidelines.txt

66d74133-9f35-4ffe-885d-e6e9b65d5c58

Requirement VA does not prescribe interest rates for VA-guaranteed loans. The interest rate is negotiated between the Veteran-borrower and the lender to allow the Veteran to obtain the best available rate. b. Changes to the Agreed Upon Interest Rate The lender and borrower are expected to honor any lock-in or other agreements they have entered into which impact the interest rate on the loan.

VA_Guidelines.txt

1b6676ef-c7ab-48e4-abd3-be6de467dbc9

VA does not object to changes in the agreed upon rate, if no lender/borrower agreements are violated, and the borrower receives any necessary updated disclosures (such as the Loan Estimate and VA Refinancing Disclosures) reflecting the change in interest rate. The following procedure applies in such cases.

VA_Guidelines.txt

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The following procedure applies in such cases. Any increase in the interest rate of more than one percent requires: · re-underwriting to ascertain the Veteran’s continued ability to qualify for the loan, · documentation of the change, and · a new or corrected Uniform Residential Loan Application, (URLA) with any corrections initialed and dated by the borrower.

VA_Guidelines.txt

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Reference: For prior approval loans, see chapter 5. 3-14 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 7: Discount Points Change Date: November 12, 2012 · This section has been updated to make minor grammatical edits. a. Requirement Veterans may pay reasonable discount points on VA-guaranteed loans. The amount of discount points is whatever the borrower and lender agree upon.

VA_Guidelines.txt

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Discount points can be based on the principal amount of the loan after adding the VA funding fee, if the funding fee will be paid from loan proceeds. b. When Can Points be Included in the Loan?

VA_Guidelines.txt

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When Can Points be Included in the Loan? Discount points may be rolled into the loan only in the case of refinancing loans, subject to the following limitations: Interest Rate Reduction Refinancing Loans A maximum of two discount points can be rolled into the loan. If the borrower pays more than two points, the remainder must be paid in cash. Refinancing of Construction Loans, etc.

VA_Guidelines.txt

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Refinancing of Construction Loans, etc. Loans to refinance are: · a construction loan, · an installment land sales contract, or · a loan assumed by the veteran at an interest rate higher than that for the proposed refinancing loan.

VA_Guidelines.txt

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Any reasonable amount of discount points may be rolled into the loan as long as the sum of the outstanding balance of the loan plus allowable closing costs and discount points does not exceed the VA reasonable value. Reference: See the maximum loan limitations in section 3 of this chapter.

VA_Guidelines.txt

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Cash-out Refinancing Loans While discount points cannot specifically be included in the loan amount, the borrower can receive cash from loan proceeds, subject to maximum loan limits (See section 3 of this chapter). The cash received by the borrower can be used for any purpose acceptable to the lender, including payment of reasonable discount points.

VA_Guidelines.txt

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Continued on next page 3-15 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 7: Discount Points, continued c. Changes to the Agreed Upon Discount Points The lender and borrower are expected to honor any agreements they have entered into which impact the discount points paid on the loan.

VA_Guidelines.txt

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VA does not object to changes in the agreed upon points, as long as no lender/borrower agreements are violated. The following procedures apply in such cases. Any increase in discount points requires: · verification that the borrower has sufficient assets to cover the increase, · documentation of the change, and · a new or corrected URLA with any corrections initialed and dated by the borrower.

VA_Guidelines.txt

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Reference: For prior approval loans, see chapter 5. 3-16 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 8: Maturity Change Date: April 10, 2009 · This section has been updated to correct hyperlinks and make minor grammatical edits. a. Maximum Maturity · Amortized loans: 30 years and 32 days, · Nonamortized loans: 5 years.

VA_Guidelines.txt

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In addition, every loan must be repayable within the estimated economic life of the property securing the loan. The period for repayment of a loan is measured from the date of the note or other evidence of indebtedness. b. Maturity Extending Beyond the Maximum VA regulations provide that any amounts, which fall due beyond the maximum maturity automatically, fall due on the maximum maturity date.

VA_Guidelines.txt

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Thus, if a lender inadvertently makes a loan that exceeds the maximum maturity, it may still be subject to guaranty. However, the regulations also limit the amount that can be collected as a final installment, such as, they prohibit excessive ballooning.

VA_Guidelines.txt

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The holder of a loan that violates this provision may desire to correct the situation through means which are legally proper in the jurisdiction. 3-17 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 9: Amortization Change Date: November 8, 2012 · This section has been updated to correct hyperlinks and make minor grammatical edits. a.

VA_Guidelines.txt

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Requirement All VA loans must be amortized if the maturity date is beyond 5 years from the date of the loan. Loans with terms less than 5 years are considered term loans and need not be amortized.

VA_Guidelines.txt

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Generally, for amortized VA loans: · payments must be approximately equal, · principal must be reduced at least once annually, and · the final installment must not exceed two times the average of the preceding installments.

VA_Guidelines.txt

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Exceptions to these requirements are made in the case of: · GPMs – See chapter 7, · Growing Equity Mortgages (GEMs) – See chapter 7, · alternative amortization plans prior approved by VA, · and construction loans. b. Alternative Amortization Plans Certain amortization plans which do not meet the requirements described in subsection a above may be used if approved in advance by VA.

VA_Guidelines.txt

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A lender may submit an amortization plan to VA for prior approval if the plan: · is generally recognized; that is, is used extensively by established lending institutions, but · does not meet the requirements of approximately equal periodic payments and a reduction in principal not less often than annually. Exception: GPMs and GEMs. c.

VA_Guidelines.txt

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Exception: GPMs and GEMs. c. Special Provisions for Construction Loans See “Amortization” in chapter 7. d. Standard and Springfield Plans The Standard and Springfield plans satisfy VA amortization requirements. · The Standard plan provides for equal payments over the life of the loan.

VA_Guidelines.txt

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The amount applied to interest decreases, with a corresponding increase in the amount applied to principal. · The Springfield plan provides for gradually decreasing payments over the life of the loan.

VA_Guidelines.txt

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The amount applied to interest decreases, while the amount applied to principal remains constant. 3-18 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 9: Amortization Change Date: November 8, 2012 · This section has been updated to correct hyperlinks and make minor grammatical edits. a.

VA_Guidelines.txt

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Requirement All VA loans must be amortized if the maturity date is beyond 5 years from the date of the loan. Loans with terms less than 5 years are considered term loans and need not be amortized.

VA_Guidelines.txt

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Generally, for amortized VA loans: · payments must be approximately equal, · principal must be reduced at least once annually, and · the final installment must not exceed two times the average of the preceding installments.

VA_Guidelines.txt

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Exceptions to these requirements are made in the case of: · GPMs – See chapter 7, · Growing Equity Mortgages (GEMs) – See chapter 7, · alternative amortization plans prior approved by VA, · and construction loans. b. Alternative Amortization Plans Certain amortization plans which do not meet the requirements described in subsection a above may be used if approved in advance by VA.

VA_Guidelines.txt

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A lender may submit an amortization plan to VA for prior approval if the plan: · is generally recognized; that is, is used extensively by established lending institutions, but · does not meet the requirements of approximately equal periodic payments and a reduction in principal not less often than annually. Exception: GPMs and GEMs. c.

VA_Guidelines.txt

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Exception: GPMs and GEMs. c. Special Provisions for Construction Loans See “Amortization” in chapter 7. d. Standard and Springfield Plans The Standard and Springfield plans satisfy VA amortization requirements. · The Standard plan provides for equal payments over the life of the loan.

VA_Guidelines.txt

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The amount applied to interest decreases, with a corresponding increase in the amount applied to principal. · The Springfield plan provides for gradually decreasing payments over the life of the loan.

VA_Guidelines.txt

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The amount applied to interest decreases, while the amount applied to principal remains constant. 3-18 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 10: Eligible Geographic Locations for the Secured Property Change Date: April 10, 2009 · This section has been updated to correct hyperlinks and make minor grammatical edits. a. Where Can the Property be Located?

VA_Guidelines.txt

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Where Can the Property be Located? Real property securing a VA-guaranteed loan must be located in the United States, its territories, or possessions (Puerto Rico, Guam, Virgin Islands, American Samoa and the Northern Mariana Islands). 3-19 VA Lenders Handbook 26-7 Chapter 3: The VA Loan and Guaranty Topic 11: What Does a VA Guaranty Mean to the Lender?

VA_Guidelines.txt

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Change Date: November 8, 2012 · This section has been updated to make minor grammatical edits. a. Protection Against Loss VA guarantees a portion of the loan, identified on the VA Loan Guaranty Certificate (LGC) by percentage and dollar amounts.

VA_Guidelines.txt

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If a loss ultimately occurs on the loan, VA will reimburse the loan holder for all or part of such loss: · limited by the stated percentage and dollar amount of the guaranty, · limited by any VA maximums for reasonable and customary foreclosure expenses, and · subject to the lender’s compliance with applicable law and regulations. b.

VA_Guidelines.txt

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Lender Responsibility It is the lender’s responsibility to comply with all laws and regulations related to the VA Home Loan program, and thereby prevent VA’s denial or reduction of a payment on a future claim.

VA_Guidelines.txt

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A lender can accomplish this by ensuring that its employees who perform work related to VA lending: · understand and comply with VA policies, procedures and regulations, and applicable law, and · direct questions to VA when issues arise that are not addressed in this handbook or other materials provided by VA. c. When is a Loan that was Closed Automatically Guaranteed?

VA_Guidelines.txt