Mitchell6024/quickb · Datasets at Hugging Face

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094b4851-206c-494d-bcbb-5f2a1d11feb0	must be used to determine the pre-refinance residual income	VA_Guidelines.txt
24905565-80f6-46bc-8146-ded2fc39d891	. · Refinance of an ARM (including h-ARM) to a fixed-rate mortgage (ARM-to-fixed) (the note or other document reflecting the amortization type is required).	VA_Guidelines.txt
2e61474b-d9de-4a9b-be33-43a0a837fcf0	Note: Loans with a temporary interest buydown are not treated as ARMs for the purpose of this NTB. Continued on next page 2638 C. F. R. § 36.4306(a)(3) 6-20 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued p. Loan Seasoning Requirement (VA-to-VA only) Loan seasoning refers to the age of the existing VA-guaranteed loan being refinanced.	VA_Guidelines.txt
cd58f7d4-9698-4d14-afbc-fe897a5670bc	It applies to all cash-out refinancing loan types made to refinance a VA-guaranteed loan (VA- to-VA). For VA purposes, the loan seasoning requirement does not apply to cash-out refinancing loans made to refinance non-VA guaranteed loans and/or other indebtedness secured by liens of record.	VA_Guidelines.txt
e85ef4c5-25fa-44cb-a39c-c1c77ec5c19b	For existing VA-guaranteed loans refinanced within 1-year from the date of closing, lenders must obtain and include in the loan file a payment history/ledger documenting all payments, or a credit bureau supplement clearly identifying all payments made on the existing VA- guaranteed loan being refinanced.	VA_Guidelines.txt
17312ff7-6f18-4e59-b05f-89a3ca1bfc05	Lender’s Certification The lender must certify when requesting the VA LGC that six or more consecutive payments have been made on the VA-guaranteed loan being refinanced. Type I Seasoning²⁷ The VA-guaranteed loan being refinanced must be seasoned on or before the note date of the new loan.	VA_Guidelines.txt
b4cda761-7318-49da-9468-298ce7306adc	The loan is considered seasoned when both conditions below are met: · the first monthly payment due date of the VA-guaranteed loan being refinanced is 210 days or more prior to the note date of the Type I cash-out refinancing loan; and · six consecutive (uninterrupted) monthly payments have been made on the VA- guaranteed loan being refinanced.	VA_Guidelines.txt
542f1812-0a32-4b7c-844f-138db42ee5d7	To meet the six consecutive monthly payment requirement, six individual monthly payments must be made, in full, in the month in which it is due, in each of six successive months. Once the loan is seasoned, it does not need to be re-seasoned after a subsequent delinquency. Example 1: Type I Seasoning – 210 days The VA-guaranteed loan being refinanced closed on March 8, 2023.	VA_Guidelines.txt
f15a32c3-8187-4af8-8a73-0a3da34c3a62	The first payment was due May 1, 2023. If six consecutive monthly payments have been made on the loan, the loan is considered seasoned on November 27, 2023. Example 2: Type I Seasoning – 6 consecutive payments The VA-guaranteed loan being refinanced closed on March 8, 2023. The first payment was due May 1, 2023.	VA_Guidelines.txt
a8eda134-23eb-4105-bfef-32a12eb28837	The first payment was due May 1, 2023. The Veteran made arrangements to pay the mortgage by submitting payments on a quarterly basis. The servicer applied the payments on a monthly basis. Even if the payments are applied in each of six simultaneous months, the Veteran does not meet the consecutive monthly payment requirement since the payments were made quarterly and not monthly.	VA_Guidelines.txt
e81fac7d-992a-4772-abad-a360ef94941a	Continued on next page 2738 U. S. C. § 3709(c) 6-21 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued p. Loan Seasoning Requirement (VA-to-VA only) Loan seasoning refers to the age of the existing VA-guaranteed loan being refinanced. It applies to all cash-out refinancing loan types made to refinance a VA-guaranteed loan (VA- to-VA).	VA_Guidelines.txt
e4846d4f-94bb-493f-8fc9-3088dffb531f	For VA purposes, the loan seasoning requirement does not apply to cash-out refinancing loans made to refinance non-VA guaranteed loans and/or other indebtedness secured by liens of record.	VA_Guidelines.txt
c0c9aebc-69a8-4137-a517-160359b52ae2	For existing VA-guaranteed loans refinanced within 1-year from the date of closing, lenders must obtain and include in the loan file a payment history/ledger documenting all payments, or a credit bureau supplement clearly identifying all payments made on the existing VA- guaranteed loan being refinanced.	VA_Guidelines.txt
be5c8e6f-1a05-46ff-ab4b-5c62422ea103	Lender’s Certification The lender must certify when requesting the VA LGC that six or more consecutive payments have been made on the VA-guaranteed loan being refinanced. Type I Seasoning²⁷ The VA-guaranteed loan being refinanced must be seasoned on or before the note date of the new loan.	VA_Guidelines.txt
750406bd-1d95-45cc-b093-4c906071ae97	The loan is considered seasoned when both conditions below are met: · the first monthly payment due date of the VA-guaranteed loan being refinanced is 210 days or more prior to the note date of the Type I cash-out refinancing loan; and · six consecutive (uninterrupted) monthly payments have been made on the VA- guaranteed loan being refinanced.	VA_Guidelines.txt
a4270d4c-6c9e-4d3b-89eb-d4f4fda6ee80	To meet the six consecutive monthly payment requirement, six individual monthly payments must be made, in full, in the month in which it is due, in each of six successive months. Once the loan is seasoned, it does not need to be re-seasoned after a subsequent delinquency. Example 1: Type I Seasoning – 210 days The VA-guaranteed loan being refinanced closed on March 8, 2023.	VA_Guidelines.txt
a169ce34-d5d2-44e9-964d-966915ea3041	The first payment was due May 1, 2023. If six consecutive monthly payments have been made on the loan, the loan is considered seasoned on November 27, 2023. Example 2: Type I Seasoning – 6 consecutive payments The VA-guaranteed loan being refinanced closed on March 8, 2023. The first payment was due May 1, 2023.	VA_Guidelines.txt
f7229f51-6f88-4d25-a542-cbb4299d8899	The first payment was due May 1, 2023. The Veteran made arrangements to pay the mortgage by submitting payments on a quarterly basis. The servicer applied the payments on a monthly basis. Even if the payments are applied in each of six simultaneous months, the Veteran does not meet the consecutive monthly payment requirement since the payments were made quarterly and not monthly.	VA_Guidelines.txt
aacc3481-d436-434e-a7a8-9b0c0c1b2dd5	Continued on next page 2738 U. S. C. § 3709(c) 6-21 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued p. Loan Seasoning Requirements (VA-to-VA only), continued Example 3: Type I Seasoning – 6 consecutive payments The VA-guaranteed loan being refinanced closed on March 8, 2023. The first payment was due May 1, 2023.	VA_Guidelines.txt
eeb7c004-387d-48bd-9203-c5cbd7710505	The first payment was due May 1, 2023. The Veteran made the May and June payments in the respective month, then missed the July payment. In August, the Veteran made both the July and August payments. The Veteran then paid the September and October payments in the respective month.	VA_Guidelines.txt
7c53c6f2-b1cc-4239-a67f-e330bc9f80d5	Although six payments have been made, and the loan is current, the loan does not meet the seasoning requirements since six payments were not submitted in six consecutive months. Type II Seasoning²⁸ The VA-guaranteed loan being refinanced must be seasoned on or before the note date of the new loan.	VA_Guidelines.txt
30188adb-715b-4a1d-aa2e-1e508d7e4269	The loan is considered seasoned when both conditions below are met: · the date the first monthly payment was made on the VA-guaranteed loan being refinanced is 210 days or more prior to the closing date of the Type II cash-out refinancing loan; and · six monthly payments have been made on the VA-guaranteed loan being refinanced (the payments do not need to be consecutive).	VA_Guidelines.txt
38b7d44d-286c-4bb6-b183-1b87630aad47	Example: Type II Seasoning The VA-guaranteed loan being refinanced closed on March 8, 2023. The first payment was made May 7, 2023. If six monthly payments have been made on the loan, the loan is considered seasoned on December 3, 2023. q. Loan Comparison Disclosure Requirement The lender must provide an initial and final loan comparison disclosure to the Veteran²⁹.	VA_Guidelines.txt
908e08db-0a66-4d5a-b35d-6c16fd95d187	The Veteran must certify receipt of both disclosures (i.e. signature, e-signature, email from the Veteran certifying receipt, email read receipts, system time/date stamp where the Veteran certified receipt, etc.). The loan comparison statements must be provided to VA at the time the lender requests the LGC from VA.	VA_Guidelines.txt
bc6c7020-ca28-463d-a487-8f0a1c6fd120	For the purpose of completing the loan comparison disclosures, the lender should use the current terms of the loan. For example, if the existing loan was modified, the current terms of the modified loan should be reflected on the loan comparison disclosures. Continued on next page 2838 C. F. R. § 36.4306(c)(2) 2938 C. F.	VA_Guidelines.txt
ab57466e-35fd-4529-81c5-ba8acdeaf46f	F. R. § 36.4306(c)(2) 2938 C. F. R. §§ 36.4306(a)(3)(ii)-(iv) 6-22 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued q.	VA_Guidelines.txt
2337329b-f319-4e58-b906-a4caa39395a6	Loan Comparison Disclosure Requirement, continued Both loan comparison disclosures must include the following comparisons of the loan(s) and/or lien(s) being refinanced to the cash-out refinancing loan: · Payoff amount of exiting mortgage(s) and/or lien(s) being refinanced vs. refinancing loan amount, · Current interest rate vs. refinancing loan interest rate, · Current loan type (i.e	VA_Guidelines.txt
1b1ef52d-7b86-4848-9655-6b7e7f8eaf8b	.e., fixed, adjustable) vs. refinancing loan type, · Remaining loan term of the existing mortgage(s) and/or lien(s) being refinanced vs. the refinancing loan term, · Total the Veteran would have paid after making all scheduled monthly principal, interest, and mortgage insurance (if applicable) payments on the exiting mortgage(s) and/or lien(s) being refinanced vs	VA_Guidelines.txt
f2eaf6d1-efcc-4f0c-b516-9469c62d18c8	. total the Veteran will pay after making all scheduled monthly principal and interest payments on the refinancing loan, and · Present combined LTV of the existing mortgage(s) and/or lien(s) being refinanced vs.	VA_Guidelines.txt
2310f9d8-d6da-4f76-bd4d-65eb21e439fd	LTV of the refinancing loan. Initial Loan Comparison Disclosure This disclosure must be provided to the Veteran within three (3) business days from the initial loan application date. Reasonable estimates may be obtained from documents, such as, monthly mortgage statements, closing documents, online property valuation tools, and manual calculations.	VA_Guidelines.txt
a4bcac82-abc9-4a6b-b8e1-b5d1624eb23e	The terms on the initial loan comparison disclosure should match the loan estimate disclosed at the time of loan application. Although the lender must provide the initial loan comparison to the Veteran within 3 business days from the initial loan application date, the Veteran may certify receipt of the disclosure at any time.	VA_Guidelines.txt
a1d978fb-d97c-43d6-b4e6-231e5d04b8fd	Lenders are encouraged to continually update the comparison disclosure as additional, and/or accurate information becomes available throughout the origination process. These updates should be done in the same manner they would for re-issuance of the loan estimate.	VA_Guidelines.txt
e5549023-0f6b-4392-9e45-6f2d8144ee64	Example: Initial Loan Comparison Disclosure Timing The Veteran completed/submitted the loan application to the lender on August 5, 2023. The lender must provide the initial comparison disclosure to the Veteran no later than August 8, 2023. The Veteran must certify no later than the date of closing that they received the initial comparison disclosure on or before August 8, 2023.	VA_Guidelines.txt
1e8c542d-6fca-4c36-baaa-3123c15e6d7a	Final Loan Comparison Disclosure This disclosure must be provided to the Veteran at loan closing. The final comparison disclosure must provide an accurate comparison of the loan/lien(s) being refinanced to the cash-out refinancing loan. The Veteran must certify receipt of the disclosure at loan closing.	VA_Guidelines.txt
e8bef67d-9490-4e1d-9953-77c37c7a6ebf	Continued on next page 6-23 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued r. Home Equity Disclosure Requirements The lender must provide a home equity disclosure³⁰ to the Veteran within 3 business days from the initial application date and at loan closing.	VA_Guidelines.txt
66b51c5c-edd5-4d04-8e54-773611478f0b	The home equity disclosure must disclose the amount of home equity being removed from the home as a result of the refinance and explain how the removal of the home equity may affect the sale or refinance of the home in the future. This may be incorporated into the loan comparison disclosure.	VA_Guidelines.txt
2a1856e2-ab4e-4d84-b1c7-756b015f16ca	VA defines home equity as the difference between the reasonable value of the home and the amount needed to pay off all liens of record secured by the property. Example: Home Equity Disclosure The reasonable value of the home is $250,000. The refinancing loan of $250,000 will be used to pay off the first mortgage $200,000, second mortgage $25,000, and a property tax lien $8,000.	VA_Guidelines.txt
807e67ab-8d1e-421c-aa10-d3ccc63e6c0e	There are no other liens of record secured by the property. Item Description Present Proposed A Reasonable Value (NOV) $250,000 $250,000 B First Mortgage (-) $200,000 $250,000 C Other Recorded Liens (-) $33,000 $0 D Home Equity (A – B – C = D) $17,000 $0 In this example, $17,000 of home equity is removed from the home as a result of the refinancing loan.	VA_Guidelines.txt
b6fefe80-be3f-4f09-9740-a62d9c274f66	Home Equity Removed = Proposed Home Equity – Present Home Equity = $0 - $17,000 = ($17,000) The Veteran must certify receipt of both disclosures (i.e. signature, e-signature, email from the Veteran certifying receipt, email read receipts, system time/date stamp where the Veteran certified receipt, etc.). Continued on next page 3038 C. F.	VA_Guidelines.txt
4a73aba9-9179-4f54-97a1-8804fabef0a0	Continued on next page 3038 C. F. R. § 36.4306(a)(3)(iii) 6-24 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued s. Cash-Out Refinancing Comparison Matrix Definitions for Type I and Type II Cash-Out Refinancing Loans are provided in sections a and b of this topic.	VA_Guidelines.txt
c277db17-70d5-4913-8811-09269659ca1f	Table 6: Cash-Out Refinancing Comparison Item Type I: Type I: Type II: Type II: VA-to-VA Non-VA-to-VA VA-to-VA Non-VA-to- VA Loan amount can exceed No No Yes Yes payoff (including funding fee). (Section b and c) Veteran can remove No No Yes Yes equity from the property. (Section b and c) Fee recoupment Yes No No No requirement. (Section m) Requirement to reduce Yes No No No the interest rate	VA_Guidelines.txt
e6c8e39a-24fd-4791-8121-f29f4fed91ea	. (Section n) Discount point Yes No No No restrictions. (Section n) Net Tangible Benefit Yes Yes Yes Yes (NTB) requirement. (Section o) Loan seasoning.	VA_Guidelines.txt
30153d18-e87c-4acd-b48a-83021b3c3578	Yes No Yes No (Section p) Initial and final loan Yes Yes Yes Yes comparison disclosures. (Section q) Home equity disclosure.	VA_Guidelines.txt
2394ee82-b1a0-4ba7-8938-681dcc1208bc	Yes Yes Yes Yes (Section r) 6-25 6-25 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 4: Quick Reference Table for IRRRLs Versus Cash-Out Refinancing Loans Change Date: April 10, 2009 · This section has been updated to remove references to a 90 percent limit and a maximum guaranty on refinancing loans, and to make minor grammatical edits. a.	VA_Guidelines.txt
23d410bd-6a83-456b-8f80-e89a2feae7dd	Table IRRRL versus Cash-out The following table provides a quick reference for IRRRL loans versus cash- out refinancing loans: Table 7: IRRRL versus Cash-out Comparison Feature IRRRL Cash-out Refinancing Purpose To refinance an existing VA loan at To pay off lien(s) of any type - can a lower interest rate also provide cash to borrower Interest Rate Rate must be lower than on existing Any	VA_Guidelines.txt
b7be9135-7027-44c5-9559-407d51fe441b	Rate Rate must be lower than on existing Any negotiated rate VA loan (unless existing loan is an ARM) Monthly Payment must be lower than that No requirement Payment on an existing VA loan (unless the Amount ARM is being refinanced, a term is shortened, or energy efficiency improvements are being included) Discount Reasonable points can be paid - only Reasonable points can be paid - if Points two	VA_Guidelines.txt
4e7091ef-a29f-4ac7-bb9f-bc45aa76d46e	Reasonable points can be paid - if Points two of these points can be included paid from loan proceeds in the loan amount Maximum Existing VA loan balance, plus 100 percent of the reasonable Loan allowable fees and charges, plus up value of the property indicated on to two discount points, plus the the NOV, plus the cost of any cost of any energy efficiency energy efficiency improvements,	VA_Guidelines.txt
cbbe248e-bee3-459b-8832-01a3898641eb	energy efficiency energy efficiency improvements, improvements, plus the VA plus the VA funding fee funding fee Maximum Guaranty is at least 25 percent in all Maximum guaranty is the same as Guaranty cases (See Topic 1, subsection h of for purchases this chapter) Entitlement Veteran re-uses the entitlement used Must have sufficient available on the existing VA loan - the IRRRL entitlement - if	VA_Guidelines.txt
0d67b009-f219-4505-822b-1f6184e81eef	the existing VA loan - the IRRRL entitlement - if existing VA loan on does not impact the amount of the same property is being entitlement the Veteran has in use refinanced, entitlement can be restored for the refinance Continued on next page 6-26 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Quick Reference Table for IRRRLs Versus Cash-Out Refinancing Loans, continued a	VA_Guidelines.txt
811e6eea-dfff-4cb0-b009-46cfc31e391a	.	VA_Guidelines.txt
108737a9-415c-493c-813f-bc9ebd535967	Table IRRRL versus Cash-out, continued Table 7: IRRRL versus Cash-out Comparison, continued Feature IRRRL Cash-out Refinancing Fees and All allowable fees and charges, Allowable fees and charges and Charges in including up to two discount points, points may be paid from the loan the Loan may be included in the loan proceeds Cash to Not permitted Borrower can receive cash for any Borrower purposes	VA_Guidelines.txt
b4824fbb-e63a-43fb-b678-c9a2d6fbe78f	can receive cash for any Borrower purposes acceptable to the lender Lien/Owner- Must be secured by first lien - Must be secured by first lien - ship Veteran must own property Veteran must own property Refinance of Cannot refinance other liens - can Can refinance any type of lien(s) Other Liens only refinance the existing VA loan Maximum Existing VA loan term plus 10 years, 30 years + 32 days Loan	VA_Guidelines.txt
b8521cd8-1c8d-495a-8dd0-71f19bbde601	loan term plus 10 years, 30 years + 32 days Loan Term not to exceed 30 years + 32 days Occupancy Veteran or spouse of an active duty Veteran or spouse of an active duty servicemember must certify to prior servicemember must certify as to occupancy intent to occupy Appraisal No appraisal is required Appraisal is required Credit No underwriting is required except Full credit information and	VA_Guidelines.txt
12abfb80-3482-4059-8298-414797663b38	is required except Full credit information and Underwriting in certain cases underwriting are always required Automatic All lenders can close IRRRLs Only lenders with automatic Authority automatically, except if the loan authority can close these loans being refinanced loan is 30 days or automatically more past due, prior approval is always required Law 38 U	VA_Guidelines.txt
954ed720-aedd-4691-815a-1df81a2fd882	.	VA_Guidelines.txt
125a5096-5df4-4a55-a909-4380d14e4f1a	S. C. 3710(a)(8) 38 U. S. C. 3710(a)(5) 6-27 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 5: Other Refinancing Loans Change Date: April 10, 2009 · Subsection c has been updated to note that maximum guaranty on these types of refinancing loans is limited to $36,000. · This section has been updated to make minor grammatical edits. a. What Are They?	VA_Guidelines.txt
b0c24c57-ffab-4784-987d-3baf05816ecd	What Are They? Other refinancing loans are: · construction loans, · installment land sale contracts, and · loans assumed by Veterans at interest rates higher than that for the proposed refinance. b.	VA_Guidelines.txt
dee7df86-1d3f-4dde-901a-8dcf32b1124c	Maximum Loan These loans may not exceed the lesser of: · the VA reasonable value plus the VA funding fee, or · the sum of the outstanding balance of the loan to be refinanced plus allowable closing costs (including the funding fee) and discounts. The cost of energy efficiency improvements can also be added to the loan. c.	VA_Guidelines.txt
b0a9fa51-35d7-4f17-a8b1-b062cfd77999	Maximum Guaranty The maximum guaranty for refinancing loans, noted in subsection a, is $36,000	VA_Guidelines.txt
732c6901-a394-41e0-af84-1db8c72cecd7	. 6-28 CHAPTER 7: LOANS REQUIRING SPECIAL UNDERWRITING, GUARANTY, AND OTHER CONSIDERATIONS Overview Topic Title Page 1 Joint Loans 7-2 2 Construction/Permanent Home Loans 7-10 3 Energy Efficient Mortgages 7-22 4 Loans for Alteration and Repairs 7-26 5 What is a Supplemental Loan 7-27 6 Adjustable-Rate Mortgages 7-31 7 Loans Involving Temporary Interest Buydowns 7-32 8 Farm Residence Loans 7-35 9	VA_Guidelines.txt
b49ca201-8697-4c63-abe7-84506653b6c0	Buydowns 7-32 8 Farm Residence Loans 7-35 9 Loans for Manufactured Homes Classified as Real Estate 7-36 10 Loans to Native American Veterans on Trust Lands 7-38 7-1 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans Change Date: March 11, 2019 · This chapter has been revised in its entirety	VA_Guidelines.txt
41ffa213-db1f-42d6-bea3-1f6ec1031838	. a.	VA_Guidelines.txt
19bbf2ab-8439-42f0-9d10-441882d101ba	What is a VA Joint Loan? “Joint loan” generally refers to a loan for which the: · Veteran and other person(s) are liable, and · Veteran and the other obligor(s) own the security.	VA_Guidelines.txt
bd21b27b-4e62-42cb-b107-bc266b8d1a50	A joint loan is a loan made to the: · Veteran and one or more non-Veterans (not spouse), · Veteran and one or more Veterans (not spouse) who will not be using their entitlement, · Veteran and the Veteran’s spouse who is also a Veteran, and both entitlement will be used; or · Veteran and one or more other Veterans (not spouse), all of who will use their entitlement.	VA_Guidelines.txt
d5741c45-c97d-48fa-8940-8dd82fc74016	A loan involving a Veteran and his or her spouse will not be treated as a “joint loan” if the spouse is: · not a Veteran, or · a Veteran who will not be using his or her entitlement on the loan.	VA_Guidelines.txt
f468dff8-426f-4d28-9e4a-7faee86dfad5	A loan to a Veteran and fiancé who intend to marry prior to loan closing and take title as Veteran and spouse will be treated as a loan to a Veteran and spouse (conditioned upon their marriage), and not a joint loan. b. Regulations The regulations in 38 C. F. R. 36.4307 address joint loans. c.	VA_Guidelines.txt
5c2def10-b581-425a-b330-ccf39d9b1d1e	F. R. 36.4307 address joint loans. c. Terminology Used in This Section For purposes of applying the principles explained in this section, this term will also be used to represent any other type of joint loan involving at least one Veteran using his or her entitlement, and at least one other person not using entitlement (can be a Veteran or a non- Veteran, but not a spouse).	VA_Guidelines.txt
659170ab-445d-4c92-917c-ebd02af255f9	Examples · Three Veterans using entitlement and one non-Veteran · One Veteran using entitlement and four non-Veterans · Two Veterans using entitlement and two Veterans not using entitlement Two Veterans Joint Loan: Commonly meaning a loan involving two Veterans who are not married to each other and both are using their entitlement.	VA_Guidelines.txt
3eb2dbce-0f13-41bd-97b9-3f912e423692	Continued on next page 7-2 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued c.	VA_Guidelines.txt
c86bf757-db77-4ca9-8164-c46c4ac44f38	Terminology Used in This Section, continued For purposes of applying the principles explained in this section, this term will also be used to represent any other type of joint loan involving only Veterans, each of whom uses his or her entitlement.	VA_Guidelines.txt
e71f9497-d494-4597-98fb-f3faa85946c1	This may also include loans to the following: · The Veteran and the Veteran’s spouse who is also a Veteran, if both entitlements will be used. · Entitlement and funding fees are separate. Funding fees are always calculated equally by the number of people on the loan.	VA_Guidelines.txt
4c544380-2c40-4761-a035-68010b35b2cb	It is based on each Veteran paying their equal share of the loan. · On a Veteran/non-Veteran loan, the funding fee is based on half of the base loan amount, downpayment, and sales price for the correct funding fee charge. · VA will only guarantee the Veteran’s portion of the total loan amount. d.	VA_Guidelines.txt
a0cc9a6d-78e7-4995-97f3-3ccda98871e3	Occupancy The Veteran using entitlement on a joint loan must certify intent to personally occupy the property as his or her home. e. How Many Units Can the Property Have? If a property is to be owned by two or more eligible Veterans, it may consist of four family units and one business unit, plus one additional unity for each Veteran participating in the ownership.	VA_Guidelines.txt
7f9b8ed3-b114-4c9c-a36b-a89358bf122d	Thus, two Veterans may purchase or construct residential property consisting of up to six family units (the basic four units plus one unit for each of the two Veterans), and one business unit. If the property contains more than four family units plus one family unit for each Veteran participating in the ownership and/or more than one business unit, the loan is not eligible for guaranty. f.	VA_Guidelines.txt
eb6235bc-baf3-4a59-b058-44231c12d56a	Which Joint Loans Require Prior Approval? Any joint loan for which the Veteran will hold title to the property and any person other than the Veteran’s spouse must be submitted for prior approval. Any loan for which the Veteran and Veteran’s spouse will hold title to the property: whether or not the spouse also uses entitlement, may be closed automatically by the lender with automatic authority.	VA_Guidelines.txt
5b70ca8e-0061-449e-81f2-19c1b7d2fb6d	This type of joint loan does not have to be submitted for prior approval. Continued on next page 7-3 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued g.	VA_Guidelines.txt
b12aba6e-d383-40bd-8a8a-bf02f9ce7643	How to Underwrite a Joint Loan The following underwriting considerations apply: Table 1: Underwriting Considerations for Joint Loans Type of Joint Loan Underwriting Considerations Function Two Veteran Joint Loan Consider the credit and combined income and assets of both parties. Strengths of one Veteran related to income and/or assets may compensate for income/asset weaknesses of the other.	VA_Guidelines.txt
11366520-c2cc-4427-841d-3451b52bc297	However, satisfactory credit of one Veteran cannot compensate for the other’s poor credit. Veteran/Non-Veteran Veteran’s credit must be satisfactory, and the Veteran’s income Joint Loan must be sufficient to repay that portion of the loan allocable to the Veteran. The credit of the non-Veteran must be satisfactory.	VA_Guidelines.txt
f657ff7f-b43b-4600-8935-d3d75ed01b66	However, the combined income of both borrowers can be considered in evaluating repayment ability. In other words: · income strength of the Veteran may compensate for income weakness of the non-Veteran, but · income strength of the non-Veteran cannot compensate for income weakness of the Veteran in analyzing the Veteran’s ability to repay his or her allocable portion of the loan. h.	VA_Guidelines.txt
38534c0e-b5fc-431c-897c-24a55359f877	How to Calculate Guaranty and Entitlement Use on Veteran/Non-Veteran Joint Loans Guaranty is limited to that portion of the loan allocable to the Veteran’s equal interest in the property. Percentage of entitlement has no bearing on the amount of the funding fee to be paid. (See Chapter 8).	VA_Guidelines.txt
002be2cc-c3cc-4bd5-868f-116b7477efce	The lender must satisfy itself that the requirements of its investor or the secondary market can be met with this limited guaranty. Continued on next page 7-4 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued i.	VA_Guidelines.txt
6b41cbea-5e59-4b8b-b532-495e962cf484	Procedure Table 2: Procedure for Calculating Guaranty and Entitlement Use for Veteran/Non- Veteran Joint Loans Step Action 1 Divide the total loan amount by the number of borrowers. 2 Multiply the result by the number of Veteran-borrowers who will be using entitlement on the loan.	VA_Guidelines.txt
f4371cab-f266-4942-b27a-086cf64a9ed4	There is usually only one Veteran borrower, in which case the result of this Step is the same as the result of Step 1. 3 Calculate the maximum potential guaranty on the portion of the loan arrived at in Step 2 (as if that portion was the total loan)	VA_Guidelines.txt
c96b4968-285a-4642-a5ea-f8a25157841f	. 4 VA will guarantee the lesser of: · the maximum potential guaranty amount arrived at in Step 3, or · the combined available entitlement of all Veteran-borrowers. 5 VA makes a charge to the Veteran-borrower’s available entitlement in the amount of the guaranty.	VA_Guidelines.txt
25803a98-96e6-444b-882b-9abe645d70b1	If more than one Veteran is involved, VA divides the entitlement charge equally between them, if possible. If only unequal entitlement is available, unequal charges may be made with the written agreement of the Veterans. Continued on next page 7-5 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued i.	VA_Guidelines.txt
98731d05-3187-4019-9c1d-23dac42acd8d	Procedure Table 2: Procedure for Calculating Guaranty and Entitlement Use for Veteran/Non- Veteran Joint Loans Step Action 1 Divide the total loan amount by the number of borrowers. 2 Multiply the result by the number of Veteran-borrowers who will be using entitlement on the loan.	VA_Guidelines.txt
2645b8f3-d3bf-4e02-9350-e6e4cd1b2346	There is usually only one Veteran borrower, in which case the result of this Step is the same as the result of Step 1. 3 Calculate the maximum potential guaranty on the portion of the loan arrived at in Step 2 (as if that portion was the total loan)	VA_Guidelines.txt
5a6d55bd-464a-4a0a-890c-9c82f498b32d	. 4 VA will guarantee the lesser of: · the maximum potential guaranty amount arrived at in Step 3, or · the combined available entitlement of all Veteran-borrowers. 5 VA makes a charge to the Veteran-borrower’s available entitlement in the amount of the guaranty.	VA_Guidelines.txt
5c14c3df-2d08-467e-b50d-30c91a1a0a97	If more than one Veteran is involved, VA divides the entitlement charge equally between them, if possible. If only unequal entitlement is available, unequal charges may be made with the written agreement of the Veterans. Continued on next page 7-5 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued j.	VA_Guidelines.txt
cc9f7437-e3d9-473a-b849-b56816b73ea5	Examples Veteran/Non-Veteran Loans Table 3: Examples of Guaranty and Entitlement Use on Veteran/Non-Veteran Loans Borrowers and Total Loan Veteran’s Maximum Entitlement Available Amount Portion Potential Charge Entitlement Guaranty on T=Total Veteran’s Portion Veteran $100,000 $50,000 $22,500 $22,500 $36,000 Non-Veteran $0 Veteran $290,000 $145,000 $36,250 $36,250 $36,000 Non-Veteran $0 Veteran	VA_Guidelines.txt
801d851e-23df-4b09-a3f0-05df4d974070	$36,250 $36,250 $36,000 Non-Veteran $0 Veteran $108,000 Total for both Total for both $14,400 $27,500 Veterans Veterans $14,400 Veteran $72,000 $28,800 T=$28,800 $36,000 Non-Veteran $0 Veteran $201,000 Total for both $36,000 $25,000 $25,000 Veterans $11,000 Veteran $134,000 T=$36,000 $11,000 Non-Veteran $0 Note: The last example would require a written agreement from the Veterans to make unequal	VA_Guidelines.txt
a513fb30-6ec3-40ec-8c53-19211f10ad63	agreement from the Veterans to make unequal charges to their entitlement	VA_Guidelines.txt
9242b0fd-2407-4975-b1e5-af09dcce7135	.	VA_Guidelines.txt
6f1dcc44-74ea-4f30-bfa1-7a460c592e11	Table 4: Quick Reference for Calculation Used Step Action 1 Divide the total loan amount by the number of borrowers. 2 Multiply the result by the number of Veterans using entitlement. 3 Calculate the maximum potential guaranty on the portion of the loan arrived at in Step 2, using the maximum guaranty table in Chapter 3 of this handbook	VA_Guidelines.txt
a31da09b-74d8-4abb-90d5-17c509efea9d	. 4 VA will make a charge to entitlement up to the amount arrived at in Step 3. · VA will divide the charge equally between multiple Veterans, if possible. · If Step 2 is greater than $144,000, additional entitlement may be added to each Veteran’s entitlement.	VA_Guidelines.txt
8ea6a6ed-6da5-4f24-a9e1-41c94a75b525	Continued on next page 7-6 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued k. How to Calculate Guaranty and Entitlement Use on Two Veteran Joint Loans? As with a non-joint loan, the potential maximum guaranty on a joint loan is calculated based on the total loan amount. l.	VA_Guidelines.txt
192fb109-bae8-41b4-b81c-95ea5bc72a16	Procedure VA Calculates the maximum potential guaranty on the total loan amount. Table 5 Procedure for Calculating Guaranty and Entitlement Use for Two Veteran Joint Loans Step Action 1 Calculate the maximum potential guaranty on the total loan amount.	VA_Guidelines.txt
9513a3e4-c99b-49c2-8501-e8597c328e37	Use the maximum guaranty table in Chapter 3 of this Handbook. 2 VA will guarantee the lesser of: · the maximum potential guaranty amount arrived at in Step 1, or · the combined available entitlement of all Veteran-borrowers. If the loan amount is greater than $144,000, additional entitlement may be added to each Veteran’s entitlement.	VA_Guidelines.txt
4f725d5d-6785-4c0e-a48e-380be81d8e05	If possible, VA will use this additional entitlement to arrive at equal entitlement charges for the Veterans involved. 3 VA will make charges to the Veterans’ available entitlement which total the maximum guaranty arrived at in Step 1, or the total of their available entitlement if less than the maximum potential guaranty.	VA_Guidelines.txt
44fd3a14-1cd5-4a68-96dc-b944ecfe2c7a	VA will divide the entitlement charge equally between the Veterans if possible, or, if only unequal entitlement is available, unequal charges may be made with the Veterans’ written agreement. Exception: VA will make the entitlement charge for husband and wife Veterans according to their preference.	VA_Guidelines.txt

094b4851-206c-494d-bcbb-5f2a1d11feb0

must be used to determine the pre-refinance residual income

VA_Guidelines.txt

24905565-80f6-46bc-8146-ded2fc39d891

. · Refinance of an ARM (including h-ARM) to a fixed-rate mortgage (ARM-to-fixed) (the note or other document reflecting the amortization type is required).

VA_Guidelines.txt

2e61474b-d9de-4a9b-be33-43a0a837fcf0

Note: Loans with a temporary interest buydown are not treated as ARMs for the purpose of this NTB. Continued on next page 2638 C. F. R. § 36.4306(a)(3) 6-20 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued p. Loan Seasoning Requirement (VA-to-VA only) Loan seasoning refers to the age of the existing VA-guaranteed loan being refinanced.

VA_Guidelines.txt

cd58f7d4-9698-4d14-afbc-fe897a5670bc

It applies to all cash-out refinancing loan types made to refinance a VA-guaranteed loan (VA- to-VA). For VA purposes, the loan seasoning requirement does not apply to cash-out refinancing loans made to refinance non-VA guaranteed loans and/or other indebtedness secured by liens of record.

VA_Guidelines.txt

e85ef4c5-25fa-44cb-a39c-c1c77ec5c19b

For existing VA-guaranteed loans refinanced within 1-year from the date of closing, lenders must obtain and include in the loan file a payment history/ledger documenting all payments, or a credit bureau supplement clearly identifying all payments made on the existing VA- guaranteed loan being refinanced.

VA_Guidelines.txt

17312ff7-6f18-4e59-b05f-89a3ca1bfc05

Lender’s Certification The lender must certify when requesting the VA LGC that six or more consecutive payments have been made on the VA-guaranteed loan being refinanced. Type I Seasoning²⁷ The VA-guaranteed loan being refinanced must be seasoned on or before the note date of the new loan.

VA_Guidelines.txt

b4cda761-7318-49da-9468-298ce7306adc

The loan is considered seasoned when both conditions below are met: · the first monthly payment due date of the VA-guaranteed loan being refinanced is 210 days or more prior to the note date of the Type I cash-out refinancing loan; and · six consecutive (uninterrupted) monthly payments have been made on the VA- guaranteed loan being refinanced.

VA_Guidelines.txt

542f1812-0a32-4b7c-844f-138db42ee5d7

To meet the six consecutive monthly payment requirement, six individual monthly payments must be made, in full, in the month in which it is due, in each of six successive months. Once the loan is seasoned, it does not need to be re-seasoned after a subsequent delinquency. Example 1: Type I Seasoning – 210 days The VA-guaranteed loan being refinanced closed on March 8, 2023.

VA_Guidelines.txt

f15a32c3-8187-4af8-8a73-0a3da34c3a62

The first payment was due May 1, 2023. If six consecutive monthly payments have been made on the loan, the loan is considered seasoned on November 27, 2023. Example 2: Type I Seasoning – 6 consecutive payments The VA-guaranteed loan being refinanced closed on March 8, 2023. The first payment was due May 1, 2023.

VA_Guidelines.txt

a8eda134-23eb-4105-bfef-32a12eb28837

The first payment was due May 1, 2023. The Veteran made arrangements to pay the mortgage by submitting payments on a quarterly basis. The servicer applied the payments on a monthly basis. Even if the payments are applied in each of six simultaneous months, the Veteran does not meet the consecutive monthly payment requirement since the payments were made quarterly and not monthly.

VA_Guidelines.txt

e81fac7d-992a-4772-abad-a360ef94941a

Continued on next page 2738 U. S. C. § 3709(c) 6-21 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued p. Loan Seasoning Requirement (VA-to-VA only) Loan seasoning refers to the age of the existing VA-guaranteed loan being refinanced. It applies to all cash-out refinancing loan types made to refinance a VA-guaranteed loan (VA- to-VA).

VA_Guidelines.txt

e4846d4f-94bb-493f-8fc9-3088dffb531f

For VA purposes, the loan seasoning requirement does not apply to cash-out refinancing loans made to refinance non-VA guaranteed loans and/or other indebtedness secured by liens of record.

VA_Guidelines.txt

c0c9aebc-69a8-4137-a517-160359b52ae2

For existing VA-guaranteed loans refinanced within 1-year from the date of closing, lenders must obtain and include in the loan file a payment history/ledger documenting all payments, or a credit bureau supplement clearly identifying all payments made on the existing VA- guaranteed loan being refinanced.

VA_Guidelines.txt

be5c8e6f-1a05-46ff-ab4b-5c62422ea103

Lender’s Certification The lender must certify when requesting the VA LGC that six or more consecutive payments have been made on the VA-guaranteed loan being refinanced. Type I Seasoning²⁷ The VA-guaranteed loan being refinanced must be seasoned on or before the note date of the new loan.

VA_Guidelines.txt

750406bd-1d95-45cc-b093-4c906071ae97

The loan is considered seasoned when both conditions below are met: · the first monthly payment due date of the VA-guaranteed loan being refinanced is 210 days or more prior to the note date of the Type I cash-out refinancing loan; and · six consecutive (uninterrupted) monthly payments have been made on the VA- guaranteed loan being refinanced.

VA_Guidelines.txt

a4270d4c-6c9e-4d3b-89eb-d4f4fda6ee80

To meet the six consecutive monthly payment requirement, six individual monthly payments must be made, in full, in the month in which it is due, in each of six successive months. Once the loan is seasoned, it does not need to be re-seasoned after a subsequent delinquency. Example 1: Type I Seasoning – 210 days The VA-guaranteed loan being refinanced closed on March 8, 2023.

VA_Guidelines.txt

a169ce34-d5d2-44e9-964d-966915ea3041

The first payment was due May 1, 2023. If six consecutive monthly payments have been made on the loan, the loan is considered seasoned on November 27, 2023. Example 2: Type I Seasoning – 6 consecutive payments The VA-guaranteed loan being refinanced closed on March 8, 2023. The first payment was due May 1, 2023.

VA_Guidelines.txt

f7229f51-6f88-4d25-a542-cbb4299d8899

The first payment was due May 1, 2023. The Veteran made arrangements to pay the mortgage by submitting payments on a quarterly basis. The servicer applied the payments on a monthly basis. Even if the payments are applied in each of six simultaneous months, the Veteran does not meet the consecutive monthly payment requirement since the payments were made quarterly and not monthly.

VA_Guidelines.txt

aacc3481-d436-434e-a7a8-9b0c0c1b2dd5

Continued on next page 2738 U. S. C. § 3709(c) 6-21 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued p. Loan Seasoning Requirements (VA-to-VA only), continued Example 3: Type I Seasoning – 6 consecutive payments The VA-guaranteed loan being refinanced closed on March 8, 2023. The first payment was due May 1, 2023.

VA_Guidelines.txt

eeb7c004-387d-48bd-9203-c5cbd7710505

The first payment was due May 1, 2023. The Veteran made the May and June payments in the respective month, then missed the July payment. In August, the Veteran made both the July and August payments. The Veteran then paid the September and October payments in the respective month.

VA_Guidelines.txt

7c53c6f2-b1cc-4239-a67f-e330bc9f80d5

Although six payments have been made, and the loan is current, the loan does not meet the seasoning requirements since six payments were not submitted in six consecutive months. Type II Seasoning²⁸ The VA-guaranteed loan being refinanced must be seasoned on or before the note date of the new loan.

VA_Guidelines.txt

30188adb-715b-4a1d-aa2e-1e508d7e4269

The loan is considered seasoned when both conditions below are met: · the date the first monthly payment was made on the VA-guaranteed loan being refinanced is 210 days or more prior to the closing date of the Type II cash-out refinancing loan; and · six monthly payments have been made on the VA-guaranteed loan being refinanced (the payments do not need to be consecutive).

VA_Guidelines.txt

38b7d44d-286c-4bb6-b183-1b87630aad47

Example: Type II Seasoning The VA-guaranteed loan being refinanced closed on March 8, 2023. The first payment was made May 7, 2023. If six monthly payments have been made on the loan, the loan is considered seasoned on December 3, 2023. q. Loan Comparison Disclosure Requirement The lender must provide an initial and final loan comparison disclosure to the Veteran²⁹.

VA_Guidelines.txt

908e08db-0a66-4d5a-b35d-6c16fd95d187

The Veteran must certify receipt of both disclosures (i.e. signature, e-signature, email from the Veteran certifying receipt, email read receipts, system time/date stamp where the Veteran certified receipt, etc.). The loan comparison statements must be provided to VA at the time the lender requests the LGC from VA.

VA_Guidelines.txt

bc6c7020-ca28-463d-a487-8f0a1c6fd120

For the purpose of completing the loan comparison disclosures, the lender should use the current terms of the loan. For example, if the existing loan was modified, the current terms of the modified loan should be reflected on the loan comparison disclosures. Continued on next page 2838 C. F. R. § 36.4306(c)(2) 2938 C. F.

VA_Guidelines.txt

ab57466e-35fd-4529-81c5-ba8acdeaf46f

F. R. § 36.4306(c)(2) 2938 C. F. R. §§ 36.4306(a)(3)(ii)-(iv) 6-22 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued q.

VA_Guidelines.txt

2337329b-f319-4e58-b906-a4caa39395a6

Loan Comparison Disclosure Requirement, continued Both loan comparison disclosures must include the following comparisons of the loan(s) and/or lien(s) being refinanced to the cash-out refinancing loan: · Payoff amount of exiting mortgage(s) and/or lien(s) being refinanced vs. refinancing loan amount, · Current interest rate vs. refinancing loan interest rate, · Current loan type (i.e

VA_Guidelines.txt

1b1ef52d-7b86-4848-9655-6b7e7f8eaf8b

.e., fixed, adjustable) vs. refinancing loan type, · Remaining loan term of the existing mortgage(s) and/or lien(s) being refinanced vs. the refinancing loan term, · Total the Veteran would have paid after making all scheduled monthly principal, interest, and mortgage insurance (if applicable) payments on the exiting mortgage(s) and/or lien(s) being refinanced vs

VA_Guidelines.txt

f2eaf6d1-efcc-4f0c-b516-9469c62d18c8

. total the Veteran will pay after making all scheduled monthly principal and interest payments on the refinancing loan, and · Present combined LTV of the existing mortgage(s) and/or lien(s) being refinanced vs.

VA_Guidelines.txt

2310f9d8-d6da-4f76-bd4d-65eb21e439fd

LTV of the refinancing loan. Initial Loan Comparison Disclosure This disclosure must be provided to the Veteran within three (3) business days from the initial loan application date. Reasonable estimates may be obtained from documents, such as, monthly mortgage statements, closing documents, online property valuation tools, and manual calculations.

VA_Guidelines.txt

a4bcac82-abc9-4a6b-b8e1-b5d1624eb23e

The terms on the initial loan comparison disclosure should match the loan estimate disclosed at the time of loan application. Although the lender must provide the initial loan comparison to the Veteran within 3 business days from the initial loan application date, the Veteran may certify receipt of the disclosure at any time.

VA_Guidelines.txt

a1d978fb-d97c-43d6-b4e6-231e5d04b8fd

Lenders are encouraged to continually update the comparison disclosure as additional, and/or accurate information becomes available throughout the origination process. These updates should be done in the same manner they would for re-issuance of the loan estimate.

VA_Guidelines.txt

e5549023-0f6b-4392-9e45-6f2d8144ee64

Example: Initial Loan Comparison Disclosure Timing The Veteran completed/submitted the loan application to the lender on August 5, 2023. The lender must provide the initial comparison disclosure to the Veteran no later than August 8, 2023. The Veteran must certify no later than the date of closing that they received the initial comparison disclosure on or before August 8, 2023.

VA_Guidelines.txt

1e8c542d-6fca-4c36-baaa-3123c15e6d7a

Final Loan Comparison Disclosure This disclosure must be provided to the Veteran at loan closing. The final comparison disclosure must provide an accurate comparison of the loan/lien(s) being refinanced to the cash-out refinancing loan. The Veteran must certify receipt of the disclosure at loan closing.

VA_Guidelines.txt

e8bef67d-9490-4e1d-9953-77c37c7a6ebf

Continued on next page 6-23 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued r. Home Equity Disclosure Requirements The lender must provide a home equity disclosure³⁰ to the Veteran within 3 business days from the initial application date and at loan closing.

VA_Guidelines.txt

66b51c5c-edd5-4d04-8e54-773611478f0b

The home equity disclosure must disclose the amount of home equity being removed from the home as a result of the refinance and explain how the removal of the home equity may affect the sale or refinance of the home in the future. This may be incorporated into the loan comparison disclosure.

VA_Guidelines.txt

2a1856e2-ab4e-4d84-b1c7-756b015f16ca

VA defines home equity as the difference between the reasonable value of the home and the amount needed to pay off all liens of record secured by the property. Example: Home Equity Disclosure The reasonable value of the home is $250,000. The refinancing loan of $250,000 will be used to pay off the first mortgage $200,000, second mortgage $25,000, and a property tax lien $8,000.

VA_Guidelines.txt

807e67ab-8d1e-421c-aa10-d3ccc63e6c0e

There are no other liens of record secured by the property. Item Description Present Proposed A Reasonable Value (NOV) $250,000 $250,000 B First Mortgage (-) $200,000 $250,000 C Other Recorded Liens (-) $33,000 $0 D Home Equity (A – B – C = D) $17,000 $0 In this example, $17,000 of home equity is removed from the home as a result of the refinancing loan.

VA_Guidelines.txt

b6fefe80-be3f-4f09-9740-a62d9c274f66

Home Equity Removed = Proposed Home Equity – Present Home Equity = $0 - $17,000 = ($17,000) The Veteran must certify receipt of both disclosures (i.e. signature, e-signature, email from the Veteran certifying receipt, email read receipts, system time/date stamp where the Veteran certified receipt, etc.). Continued on next page 3038 C. F.

VA_Guidelines.txt

4a73aba9-9179-4f54-97a1-8804fabef0a0

Continued on next page 3038 C. F. R. § 36.4306(a)(3)(iii) 6-24 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Cash-Out Refinancing Loans, continued s. Cash-Out Refinancing Comparison Matrix Definitions for Type I and Type II Cash-Out Refinancing Loans are provided in sections a and b of this topic.

VA_Guidelines.txt

c277db17-70d5-4913-8811-09269659ca1f

Table 6: Cash-Out Refinancing Comparison Item Type I: Type I: Type II: Type II: VA-to-VA Non-VA-to-VA VA-to-VA Non-VA-to- VA Loan amount can exceed No No Yes Yes payoff (including funding fee). (Section b and c) Veteran can remove No No Yes Yes equity from the property. (Section b and c) Fee recoupment Yes No No No requirement. (Section m) Requirement to reduce Yes No No No the interest rate

VA_Guidelines.txt

e6c8e39a-24fd-4791-8121-f29f4fed91ea

. (Section n) Discount point Yes No No No restrictions. (Section n) Net Tangible Benefit Yes Yes Yes Yes (NTB) requirement. (Section o) Loan seasoning.

VA_Guidelines.txt

30153d18-e87c-4acd-b48a-83021b3c3578

Yes No Yes No (Section p) Initial and final loan Yes Yes Yes Yes comparison disclosures. (Section q) Home equity disclosure.

VA_Guidelines.txt

2394ee82-b1a0-4ba7-8938-681dcc1208bc

Yes Yes Yes Yes (Section r) 6-25 6-25 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 4: Quick Reference Table for IRRRLs Versus Cash-Out Refinancing Loans Change Date: April 10, 2009 · This section has been updated to remove references to a 90 percent limit and a maximum guaranty on refinancing loans, and to make minor grammatical edits. a.

VA_Guidelines.txt

23d410bd-6a83-456b-8f80-e89a2feae7dd

Table IRRRL versus Cash-out The following table provides a quick reference for IRRRL loans versus cash- out refinancing loans: Table 7: IRRRL versus Cash-out Comparison Feature IRRRL Cash-out Refinancing Purpose To refinance an existing VA loan at To pay off lien(s) of any type - can a lower interest rate also provide cash to borrower Interest Rate Rate must be lower than on existing Any

VA_Guidelines.txt

b7be9135-7027-44c5-9559-407d51fe441b

Rate Rate must be lower than on existing Any negotiated rate VA loan (unless existing loan is an ARM) Monthly Payment must be lower than that No requirement Payment on an existing VA loan (unless the Amount ARM is being refinanced, a term is shortened, or energy efficiency improvements are being included) Discount Reasonable points can be paid - only Reasonable points can be paid - if Points two

VA_Guidelines.txt

4e7091ef-a29f-4ac7-bb9f-bc45aa76d46e

Reasonable points can be paid - if Points two of these points can be included paid from loan proceeds in the loan amount Maximum Existing VA loan balance, plus 100 percent of the reasonable Loan allowable fees and charges, plus up value of the property indicated on to two discount points, plus the the NOV, plus the cost of any cost of any energy efficiency energy efficiency improvements,

VA_Guidelines.txt

cbbe248e-bee3-459b-8832-01a3898641eb

energy efficiency energy efficiency improvements, improvements, plus the VA plus the VA funding fee funding fee Maximum Guaranty is at least 25 percent in all Maximum guaranty is the same as Guaranty cases (See Topic 1, subsection h of for purchases this chapter) Entitlement Veteran re-uses the entitlement used Must have sufficient available on the existing VA loan - the IRRRL entitlement - if

VA_Guidelines.txt

0d67b009-f219-4505-822b-1f6184e81eef

the existing VA loan - the IRRRL entitlement - if existing VA loan on does not impact the amount of the same property is being entitlement the Veteran has in use refinanced, entitlement can be restored for the refinance Continued on next page 6-26 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 3: Quick Reference Table for IRRRLs Versus Cash-Out Refinancing Loans, continued a

VA_Guidelines.txt

811e6eea-dfff-4cb0-b009-46cfc31e391a

.

VA_Guidelines.txt

108737a9-415c-493c-813f-bc9ebd535967

Table IRRRL versus Cash-out, continued Table 7: IRRRL versus Cash-out Comparison, continued Feature IRRRL Cash-out Refinancing Fees and All allowable fees and charges, Allowable fees and charges and Charges in including up to two discount points, points may be paid from the loan the Loan may be included in the loan proceeds Cash to Not permitted Borrower can receive cash for any Borrower purposes

VA_Guidelines.txt

b4824fbb-e63a-43fb-b678-c9a2d6fbe78f

can receive cash for any Borrower purposes acceptable to the lender Lien/Owner- Must be secured by first lien - Must be secured by first lien - ship Veteran must own property Veteran must own property Refinance of Cannot refinance other liens - can Can refinance any type of lien(s) Other Liens only refinance the existing VA loan Maximum Existing VA loan term plus 10 years, 30 years + 32 days Loan

VA_Guidelines.txt

b8521cd8-1c8d-495a-8dd0-71f19bbde601

loan term plus 10 years, 30 years + 32 days Loan Term not to exceed 30 years + 32 days Occupancy Veteran or spouse of an active duty Veteran or spouse of an active duty servicemember must certify to prior servicemember must certify as to occupancy intent to occupy Appraisal No appraisal is required Appraisal is required Credit No underwriting is required except Full credit information and

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is required except Full credit information and Underwriting in certain cases underwriting are always required Automatic All lenders can close IRRRLs Only lenders with automatic Authority automatically, except if the loan authority can close these loans being refinanced loan is 30 days or automatically more past due, prior approval is always required Law 38 U

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S. C. 3710(a)(8) 38 U. S. C. 3710(a)(5) 6-27 VA Lenders Handbook M26-7 Chapter 6: Refinancing Loans Topic 5: Other Refinancing Loans Change Date: April 10, 2009 · Subsection c has been updated to note that maximum guaranty on these types of refinancing loans is limited to $36,000. · This section has been updated to make minor grammatical edits. a. What Are They?

VA_Guidelines.txt

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What Are They? Other refinancing loans are: · construction loans, · installment land sale contracts, and · loans assumed by Veterans at interest rates higher than that for the proposed refinance. b.

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Maximum Loan These loans may not exceed the lesser of: · the VA reasonable value plus the VA funding fee, or · the sum of the outstanding balance of the loan to be refinanced plus allowable closing costs (including the funding fee) and discounts. The cost of energy efficiency improvements can also be added to the loan. c.

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Maximum Guaranty The maximum guaranty for refinancing loans, noted in subsection a, is $36,000

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. 6-28 CHAPTER 7: LOANS REQUIRING SPECIAL UNDERWRITING, GUARANTY, AND OTHER CONSIDERATIONS Overview Topic Title Page 1 Joint Loans 7-2 2 Construction/Permanent Home Loans 7-10 3 Energy Efficient Mortgages 7-22 4 Loans for Alteration and Repairs 7-26 5 What is a Supplemental Loan 7-27 6 Adjustable-Rate Mortgages 7-31 7 Loans Involving Temporary Interest Buydowns 7-32 8 Farm Residence Loans 7-35 9

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Buydowns 7-32 8 Farm Residence Loans 7-35 9 Loans for Manufactured Homes Classified as Real Estate 7-36 10 Loans to Native American Veterans on Trust Lands 7-38 7-1 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans Change Date: March 11, 2019 · This chapter has been revised in its entirety

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. a.

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What is a VA Joint Loan? “Joint loan” generally refers to a loan for which the: · Veteran and other person(s) are liable, and · Veteran and the other obligor(s) own the security.

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A joint loan is a loan made to the: · Veteran and one or more non-Veterans (not spouse), · Veteran and one or more Veterans (not spouse) who will not be using their entitlement, · Veteran and the Veteran’s spouse who is also a Veteran, and both entitlement will be used; or · Veteran and one or more other Veterans (not spouse), all of who will use their entitlement.

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A loan involving a Veteran and his or her spouse will not be treated as a “joint loan” if the spouse is: · not a Veteran, or · a Veteran who will not be using his or her entitlement on the loan.

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A loan to a Veteran and fiancé who intend to marry prior to loan closing and take title as Veteran and spouse will be treated as a loan to a Veteran and spouse (conditioned upon their marriage), and not a joint loan. b. Regulations The regulations in 38 C. F. R. 36.4307 address joint loans. c.

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F. R. 36.4307 address joint loans. c. Terminology Used in This Section For purposes of applying the principles explained in this section, this term will also be used to represent any other type of joint loan involving at least one Veteran using his or her entitlement, and at least one other person not using entitlement (can be a Veteran or a non- Veteran, but not a spouse).

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Examples · Three Veterans using entitlement and one non-Veteran · One Veteran using entitlement and four non-Veterans · Two Veterans using entitlement and two Veterans not using entitlement Two Veterans Joint Loan: Commonly meaning a loan involving two Veterans who are not married to each other and both are using their entitlement.

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Continued on next page 7-2 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued c.

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Terminology Used in This Section, continued For purposes of applying the principles explained in this section, this term will also be used to represent any other type of joint loan involving only Veterans, each of whom uses his or her entitlement.

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This may also include loans to the following: · The Veteran and the Veteran’s spouse who is also a Veteran, if both entitlements will be used. · Entitlement and funding fees are separate. Funding fees are always calculated equally by the number of people on the loan.

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It is based on each Veteran paying their equal share of the loan. · On a Veteran/non-Veteran loan, the funding fee is based on half of the base loan amount, downpayment, and sales price for the correct funding fee charge. · VA will only guarantee the Veteran’s portion of the total loan amount. d.

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Occupancy The Veteran using entitlement on a joint loan must certify intent to personally occupy the property as his or her home. e. How Many Units Can the Property Have? If a property is to be owned by two or more eligible Veterans, it may consist of four family units and one business unit, plus one additional unity for each Veteran participating in the ownership.

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Thus, two Veterans may purchase or construct residential property consisting of up to six family units (the basic four units plus one unit for each of the two Veterans), and one business unit. If the property contains more than four family units plus one family unit for each Veteran participating in the ownership and/or more than one business unit, the loan is not eligible for guaranty. f.

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Which Joint Loans Require Prior Approval? Any joint loan for which the Veteran will hold title to the property and any person other than the Veteran’s spouse must be submitted for prior approval. Any loan for which the Veteran and Veteran’s spouse will hold title to the property: whether or not the spouse also uses entitlement, may be closed automatically by the lender with automatic authority.

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This type of joint loan does not have to be submitted for prior approval. Continued on next page 7-3 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued g.

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How to Underwrite a Joint Loan The following underwriting considerations apply: Table 1: Underwriting Considerations for Joint Loans Type of Joint Loan Underwriting Considerations Function Two Veteran Joint Loan Consider the credit and combined income and assets of both parties. Strengths of one Veteran related to income and/or assets may compensate for income/asset weaknesses of the other.

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However, satisfactory credit of one Veteran cannot compensate for the other’s poor credit. Veteran/Non-Veteran Veteran’s credit must be satisfactory, and the Veteran’s income Joint Loan must be sufficient to repay that portion of the loan allocable to the Veteran. The credit of the non-Veteran must be satisfactory.

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However, the combined income of both borrowers can be considered in evaluating repayment ability. In other words: · income strength of the Veteran may compensate for income weakness of the non-Veteran, but · income strength of the non-Veteran cannot compensate for income weakness of the Veteran in analyzing the Veteran’s ability to repay his or her allocable portion of the loan. h.

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How to Calculate Guaranty and Entitlement Use on Veteran/Non-Veteran Joint Loans Guaranty is limited to that portion of the loan allocable to the Veteran’s equal interest in the property. Percentage of entitlement has no bearing on the amount of the funding fee to be paid. (See Chapter 8).

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The lender must satisfy itself that the requirements of its investor or the secondary market can be met with this limited guaranty. Continued on next page 7-4 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued i.

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Procedure Table 2: Procedure for Calculating Guaranty and Entitlement Use for Veteran/Non- Veteran Joint Loans Step Action 1 Divide the total loan amount by the number of borrowers. 2 Multiply the result by the number of Veteran-borrowers who will be using entitlement on the loan.

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There is usually only one Veteran borrower, in which case the result of this Step is the same as the result of Step 1. 3 Calculate the maximum potential guaranty on the portion of the loan arrived at in Step 2 (as if that portion was the total loan)

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. 4 VA will guarantee the lesser of: · the maximum potential guaranty amount arrived at in Step 3, or · the combined available entitlement of all Veteran-borrowers. 5 VA makes a charge to the Veteran-borrower’s available entitlement in the amount of the guaranty.

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If more than one Veteran is involved, VA divides the entitlement charge equally between them, if possible. If only unequal entitlement is available, unequal charges may be made with the written agreement of the Veterans. Continued on next page 7-5 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued i.

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Procedure Table 2: Procedure for Calculating Guaranty and Entitlement Use for Veteran/Non- Veteran Joint Loans Step Action 1 Divide the total loan amount by the number of borrowers. 2 Multiply the result by the number of Veteran-borrowers who will be using entitlement on the loan.

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There is usually only one Veteran borrower, in which case the result of this Step is the same as the result of Step 1. 3 Calculate the maximum potential guaranty on the portion of the loan arrived at in Step 2 (as if that portion was the total loan)

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. 4 VA will guarantee the lesser of: · the maximum potential guaranty amount arrived at in Step 3, or · the combined available entitlement of all Veteran-borrowers. 5 VA makes a charge to the Veteran-borrower’s available entitlement in the amount of the guaranty.

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If more than one Veteran is involved, VA divides the entitlement charge equally between them, if possible. If only unequal entitlement is available, unequal charges may be made with the written agreement of the Veterans. Continued on next page 7-5 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued j.

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Examples Veteran/Non-Veteran Loans Table 3: Examples of Guaranty and Entitlement Use on Veteran/Non-Veteran Loans Borrowers and Total Loan Veteran’s Maximum Entitlement Available Amount Portion Potential Charge Entitlement Guaranty on T=Total Veteran’s Portion Veteran $100,000 $50,000 $22,500 $22,500 $36,000 Non-Veteran $0 Veteran $290,000 $145,000 $36,250 $36,250 $36,000 Non-Veteran $0 Veteran

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$36,250 $36,250 $36,000 Non-Veteran $0 Veteran $108,000 Total for both Total for both $14,400 $27,500 Veterans Veterans $14,400 Veteran $72,000 $28,800 T=$28,800 $36,000 Non-Veteran $0 Veteran $201,000 Total for both $36,000 $25,000 $25,000 Veterans $11,000 Veteran $134,000 T=$36,000 $11,000 Non-Veteran $0 Note: The last example would require a written agreement from the Veterans to make unequal

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agreement from the Veterans to make unequal charges to their entitlement

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Table 4: Quick Reference for Calculation Used Step Action 1 Divide the total loan amount by the number of borrowers. 2 Multiply the result by the number of Veterans using entitlement. 3 Calculate the maximum potential guaranty on the portion of the loan arrived at in Step 2, using the maximum guaranty table in Chapter 3 of this handbook

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. 4 VA will make a charge to entitlement up to the amount arrived at in Step 3. · VA will divide the charge equally between multiple Veterans, if possible. · If Step 2 is greater than $144,000, additional entitlement may be added to each Veteran’s entitlement.

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Continued on next page 7-6 VA Lenders Handbook 26-7 Chapter 7: Loans Requiring Special Underwriting, Guaranty, and Other Considerations Topic 1: Joint Loans, continued k. How to Calculate Guaranty and Entitlement Use on Two Veteran Joint Loans? As with a non-joint loan, the potential maximum guaranty on a joint loan is calculated based on the total loan amount. l.

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Procedure VA Calculates the maximum potential guaranty on the total loan amount. Table 5 Procedure for Calculating Guaranty and Entitlement Use for Two Veteran Joint Loans Step Action 1 Calculate the maximum potential guaranty on the total loan amount.

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Use the maximum guaranty table in Chapter 3 of this Handbook. 2 VA will guarantee the lesser of: · the maximum potential guaranty amount arrived at in Step 1, or · the combined available entitlement of all Veteran-borrowers. If the loan amount is greater than $144,000, additional entitlement may be added to each Veteran’s entitlement.

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If possible, VA will use this additional entitlement to arrive at equal entitlement charges for the Veterans involved. 3 VA will make charges to the Veterans’ available entitlement which total the maximum guaranty arrived at in Step 1, or the total of their available entitlement if less than the maximum potential guaranty.

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VA will divide the entitlement charge equally between the Veterans if possible, or, if only unequal entitlement is available, unequal charges may be made with the Veterans’ written agreement. Exception: VA will make the entitlement charge for husband and wife Veterans according to their preference.

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