Non-Guaranteed Loans

Non-Guaranteed Loans. A. Loans without a due-on-sale clause may be assumed by veterans and or non- veterans. Board approval of satisfactory income, employment and credit is required. 1. Requirements: a. Non-veteran and or veteran assumption requires a $360 processing fee to be paid at time of application. ($50 refundable if the loan is disapproved). The closing attorney must call when preparing closing documents to verify the loan balance. b. A Title Certificate must be provided to and approved by VHPB prior to loan closing. c. A completed application packet must be provided at the time of application. d. A recorded Assumption Transfer Deed signed by both the grantees and grantors. The attached assumption clause must be signed by the grantees and grantors and included as an attachment to the Assumption Transfer Deed. (Exhibit A) e. A current hazard insurance policy in the new borrower’s name with the Veterans’ Home Purchase Board shown as mortgagee must be provided at closing. f. A paid receipt for the first year’s insurance premium is required at closing. g. An acknowledgement signed by the sellers and buyers determining who is to receive the current escrow balance on the loan. If there is an escrow shortage then the shortage amount must be paid at closing. h. The loan must be current at the time of closing. If any payments are due they must be received by VHPB and posted to the account prior to closing. i. A copy of the HUD-1 Settlement Statement must be furnished. j. Flood certification to be ordered by VHPB after closing. k. No Appraisal required. 2. Applicant must send in $360.00 at the time of application. Application is a full credit application package. A Title Certificate must be provided to and approved by VHPB prior to loan closing. The Division Director or the Executive Director prior to loan closing must approve the Title Certificate. The closing attorney must call and obtain current loan balance and determine if payments are current; provide VHPB with the recorded Assumption Warranty Deed with any Exhibits signed by all required parties; provide VHPB with a current hazard insurance policy for at least the amount of the loan balance with VHPB as mortgagee; provide VHPB with a paid receipt for the first year of hazard insurance premium; provide VHPB with a copy of the new purchaser’s social security card and driver license, HUD Settlement Statement and provide VHPB with an acknowledgement signed by all parties determining the responsibility of the current escrow account and shortage, if required. Once all of this information is received by the VHPB loan processing specialist, the loan will be amended in the computer system to reflect the new borrower’s information. The loan processing specialist will order the flood certificate. All items will then be placed in a file folder and placed in the permanent file by the loan processing specialist. Nothing is to be changed on the computer until all documents and fees are received and correct. B. Loans with a due-on-sale clause may be assumed by veterans only, unless a non- veteran receives a waiver by the Board. Board approval of satisfactory income, employment, and credit is required. 1. Requirements: a. Veteran Assumption requires a $60 credit report fee to be paid at time of application. A $35 transfer fee is to be paid at closing. The closing attorney must call when preparing closing documents to verify the loan balance. b. Non-Veteran Assumption requires a $350 processing fee to be paid at time of application. ($50 refundable if the loan is disapproved) A funding fee of 1% of the loan balance is to be paid at closing. The closing attorney must call when preparing closing documents to verify the loan balance. c. A title Certificate must be provided to and approved by VHPB prior to loan closing. d. A completed application packet must be provided at the time of application. e. A recorded Assumption Transfer Deed signed by both the grantees and grantors. The attached assumption clause must be signed by the grantees and grantors and included as an attachment to the Assumption Transfer Deed. (Exhibit A) f. A current hazard insurance policy in the new borrowers name with the Veterans’ Home Purchase Board shown as mortgagee must be provided at closing. g. An acknowledgement signed by the sellers and buyers determining who is to receive the current escrow balance on the loan. If there is an escrow shortage then the shortage amount must be paid at closing. h. The loan must be current at the time of closing. If any payments are due they must be received by VHPB and posted to the account prior to closing. i. A copy of the HUD-1 Settlement Statement must be furnished. j. No Appraisal required. 2. Applicant must send in $60 at the time of application. Application is a full credit application package. A Title Certificate must be provided to and approved by VHPB prior to loan closing. A Department Supervisor or the Executive Director prior to loan closing must approve the Title Certificate. The closing attorney must call and obtain current loan balance and determine if payments are current; provide VHPB with the recorded Assumption Warranty Deed with the attached assumption clause (Exhibit A) signed by all parties; provide VHPB with a current hazard insurance policy for at least the amount of the loan balance with VHPB as mortgagee; provide VHPB with a paid receipt for the first year of hazard insurance premium; VHPB with a copy of the new purchaser’s social security card and driver license; collect and provide to VHPB $35 transfer fee or $360 assumption fee; HUD Settlement Statement; and provide VHPB with an acknowledgement signed by all parties determining the responsibility of the current escrow account and shortage, if required. Once all of this information is received by the VHPB loan processing specialist, then the loan will be amended on the computer system to reflect the new borrower’s information. The loan processing specialist will order the flood certificate. All items will then be placed in a file folder and placed in the permanent file by the loan processing specialist. Nothing is to be changed on the computer until all documents and fees are received and correct. C. Subsequent VHPB Loan for A Veteran When A Non-Veteran Assumes A VHPB Loan. If a non-veteran assumes a VHPB loan, the original veteran (mortgagor) may not be eligible for a subsequent VHPB loan as long as the Deed of Trust on the original loan is outstanding even though the veteran is released from liability by the Department of Veteran Affairs. Note: The original Veteran may, of course, obtain a VA loan from another source should he or she meet all the requirements. 1. Attachment to Transfer Deed: EXHIBIT A By acceptance of this deed, Grantees herein, as part of the purchase price and consideration for this deed, assume the obligations and agree to pay the indebtedness evidenced by that certain Deed of Trust made by _________________________on __________________, to Veterans’ Home Purchase Board, which Deed of Trust is recorded in the Office of the Chancery Clerk, ________________________ County, Mississippi, Book ____________, page ________. And for the same consideration Grantees hereby assume the obligations of _________________________________, under the terms of the Deed of Trust and the Note creating the loan, to indemnify the Department of Veterans Affairs to the extent of any claim payment arising from the guaranty of insurance of the indebtedness above mentioned. This liability to the Department of Veterans Affairs is under the authority of Chapter 37, Title 38 of the United States Code, and supersedes any State or local law barring or limiting deficiencies following foreclosure of real property. __________________________________ Grantee __________________________________ Grantee __________________________________ Grantor __________________________________ Grantor