VA PURCHASE. Table of Contents

Transcription

1 Table f Cntents 1. Eligible Mrtgage Prduct & Term VA Lan Limits Maximum LTV/CLTV Entitlement/Guarantee Funding Fee Table Brrwers Eligibilty Same-Sex Married Cuples FICO High Cst/High Priced Prpety Requirements Other Real Estate Appraisal Requirements Flips Discunt Pints DTI Ratis Credit Requirements Incme Requirements Assets Dcumentatin Requirements Underwriting Methd Miscellaneus Criteria VA Cmpensating Factrs Seller Cntributins/Cncessins VA Allwable and Nn-Allwable Fees LDP/GSA CAIVRS Title Useful Links VA Purchase

2 Eligible Mrtgage Prduct & Term VA Purchase- 30 Year Fixed Rate 5/1 ARM Margin 2.25% VA Lan Limits UNITS LOAN LIMITS INCLUDE VA FUNDING FEE 1-4 Units $417, Units $417,001 - $699, Units* $700,000 - & $1,000, Units* $1,000,001 - $1,500,000 Lan amunts $700,000 and abve require exceptin frm investr prir t dcs VA Cunty Limits * High Balance VA lans: DTI <= 41% > $700,000 & <= $1,500,000 maybe eligible, subject t Crprate Underwriting Apprval(n lnger requires investr specific frm 19) * VA Lans > $700,000 & </= $1,500,000 may be eligible subject t Exceptin frm investr when DTI > 41%. Underwriter t cmplete Investr Specific Frm 19 and fax t with required dcumentatin. Underwriter t add cnditin Investr Specific t WFB nce Investr Exceptin has been granted. Maximum LTV/CLTV Maximum financing is 100% LOAN AMOUNT ENTITLEMENT/GUARANTEE MAXIMUM POTENTIAL GUARANTEE < = $45,000 50% f the lan amunt $45,001 t $56,250 $22,500 $56,251 t $144,000 40% f the lan amunt r maximum $36,000 $144,001 t $417,000 25% f the lan amunt r maximum $104,250 $417,001 t $1,500,000 25% f the lan amunt r maximum $273,656 Calculating the max lan amunt- PBM Maximum Lan Wrksheet is required t be used t validate 25% guarantee has been met. Certificate f Eligibility (COE) is nly valid fr 90 days frm the date issued Recertificatin f COE is required if lder than 90 days at the time lan dcs are drawn. Updated COE is prcessed thrugh VA Prtal. Cmplete Autmated COE Screen Yu will be prmpted t file the n line, and Will need t attach the DD214 The new COE will be received within hurs VA Purchase

3 FUNDING FEE TABLE LOAN TYPE FUNDING FEE RESERVIST FUNDING FEE Purchase Lan- Zer Dwn 2.15% 2.40% Purchase Lan- 5% Dwn 1.50% 1.75% Purchase Lan- 10% Dwn 1.25% 1.50% Subsequent User 3.30% 3.30% Subsequent User 5% -9.99% dwn 1.50% 1.75% pmt Subsequent User 10% dwn pmt 1.25% 1.50% All VA Lans require a VA Funding Fee. Exceptins may be made t veterans with service-cnnected disabilities and t surviving spuses f veterans wh die in service r frm service cnnected disabilities Funding Fee must be financed in full r paid in full in cash at clsing. N partial payments allwed. Lan Amunt > $417,000: VA cunty limit may nly be exceeded by the VA Funding Fee and still meet the 25% guarantee fr VA. VA lan amunts exceeding cunty limits excluding VAFF, require dwn payment fr guarantee shrtfall. See VA Maximum lan wrksheet fr shrtfall requirements. Brrwers Eligibility US Citizens Permanent & Nn-Permanent Resident Aliens Qualifying Brrwers Veteran Veteran & Spuse Veteran & Veteran with single eligibility * Veteran & Veteran with dual eligibility * Widw/Widwer f Veteran ne time purchase see ntes lcated in Underwriting Methd Same-Sex Married Cuples Lender Prcessing: Same-sex married cuples when executing the 1003 and 1802a acknwledge that they meet the fllwing VA requirements: The marriage was legal in the place where the Veteran r the Veteran s spuse resided at the time f the marriage; Legal in the place where the Veteran r the Veteran s spuse resided at the time the cmpleted 1003 and 1802a were submitted t PBM; Legal in the place where the Veteran r the Veteran s spuse resided in at the time f clsing. VA Purchase

4 If the brrwer asserts a spusal relatinship in item 19 (1802a) and signs the frm, which includes a certificatin by the brrwer that the infrmatin is true and cmplete t the best f their knwledge and belief, PBM may prcess the lan per nrmal practices withut submitting a lan package t VA fr apprval f spusal status: If the brrwer infrms the lender that he r she is uncertain as t whether the marriage may be recgnized fr VA purpses, the underwriter must request that VA make a determinatin regarding whether the marriage can be recgnized, The fllwing infrmatin shuld be prvided t Phenix Reginal Lan Center via at : LPGC.VBAPHO@va.gv fr further review: Date and state f marriage; State(s) f residence f the parties at the time f marriage; State where the subject prperty is lcated; Current state(s) f residence f the parties; Estimated date f lan clsing; and Whether VA has previusly recgnized the marriage fr the purpse f a different VA benefit r service. The underwriter shuld request this infrmatin frm the brrwer if nt already available. Fic FICO Cnfrming Lan Amunt ONLY See Rate Sheet Fr Additinal Pricing Adjustment 640 FICO > $417,001 t $699, FICO fr lan amunts >700k t > $999,999 See Exceptin Requirements under VA Lan Limits 700 FICO fr lan amunts > $1,000,000 t $1,500,000 High Cst/High Priced Nt Allwed Prperty Single Family Residence Requirements PUD Cnd (VA apprved) 2-4 Units (per guideline requirements) Owner Occupied Primary Residence nly Other Real Estate Maximum number f financed prperties is fur (4) Including PBM Lan Appraisal Requirements LAPP Appraisal (VA Appraisal ONLY) NOV is valid fr 6 mnths and FHMA frm 1004MC is required fr all appraisals UAD Cmpliant (Unifrm Appraisal Dataset) Interir phts t include: kitchen, bathrm, main living area, physical deteriratin if present, restratin, remdeling r renvatin if present. Exterir phts t include: frnt and rear view, street scene, site features, imprvements and views that wuld affect value. Small Residential Incme Prperty Appraisal Reprt, Freddie Mac Frm 72, Fannie Mae Frm 1025, if prperty has tw t fur living units VA Purchase

5 All lans must adhere t State and Lcal Prperty Laws (carbn mnxide, smke detectrs and lead based paint guidelines) If the appraiser ntes the absence f a wrking carbn mnxide detectr and appraisal is Subject T - A 1004D will be required evidencing the cmpletin f the requirements. If the appraiser ntes the absence f a wrking carbn mnxide detectr, but appraisal reads, AS IS a Lender s Certificatin is acceptable t assure the wrk has been cmpleted. If the appraiser des nt mentin the absence f a wrking carbn mnxide detectr in the appraisal reprt, neither a 1004D nr a Lender s Certificatin evidencing cmpletin will be required in regards t the carbn mnxide detectr. Case number and appraisal fllw the veteran, NOT the prperty. All VA lans will require an appraisal and case number assigned t ur purchase transactin and veteran. Appraisals and case numbers are exclusive t the purchase transactins. VA will nt allw an appraisal r case number that was issued t anther veteran n the new lan. VA cnsiders the appraisal the persnal prperty f the veteran; therefre, nly transfers frm ne lender t anther with the same veteran will be allwed. Fr lan amunts > $1,000,000, be sure t request a certified appraiser when requesting the appraiser assignment frm VA. Regardless f lan amunt, the VA guaranty plus cash/equity must be equal t at least 25% f the purchase price r Ntificatin f Value (NOV), whichever is less, n purchase and nn-irrrl refinances. Unpermitted Prperty Additins: Prperties with unpermitted structural additins are allwed under the fllwing cnditins: The quality f the wrk is described in the appraisal and deemed acceptable(wrkmanlike quality) by the appraiser; The additin des nt result in a change in the number f units cmprising the subject prperty(e.g. a 1 unit cnverted int a 2 unit); If the appraiser gives the unpermitted additin value, the appraiser must be able t demnstrate market acceptance by the use f cmparable sales with similar additins and state the fllwing in the appraisal: Nn-Permitted additins are typical fr the market area and a typical buyer wuld cnsider the unpermitted additinal square ftage t be part f the verall square ftage f the prperty. The appraiser has n reasn t believe the additin wuld nt pass inspectin fr a permit. New Cnstructin- New cnstructin must be 90% r mre cmpleted, including existing prperties less than ne year ld. All Builders MUST be apprved by VA. VA Purchase

6 NOV cannt be issued withut builder ID number nted. Builder ID s can be fund in VA Prtal. New Cnstructin required cmpleted frms 1. Builder s Certificatin f Plans, Specificatins and Site, frm HUD Builder s Warranty, frm HUD Building Permit and Certificatin f Occupancy r 10-year Warranty and Final Inspectin signed and dated by the City/Cunty Building Department. 4. Wd Infestatin Reprt (Termite Sil) NPMA 99a and 99b 5. Lcal Health Authrity well water analysis r septic reprt, where applicable. 6. Statement f VA Nn Inspectin required D-part B certificatin f cmpletin, 442 r Appraiser s letter head t certify satisfactry cmpletin f the required repairs. New Cnstructin 100% cmplete (Existing less than ne year ld) 1. Builder s Certificatin f Plans, Specificatins and Site, frm HUD Builder s Warranty, frm HUD Wd Infestatin Reprt (Termite Sil) NPMA 99a and 99b 4. Lcal Health Authrity well water analysis r septic reprt, where applicable. 5. Statement f VA Nn Inspectin required D-part B certificatin f cmpletin, 442 r Appraiser s letter head t certify satisfactry cmpletin f the required repairs. Termite Repairs When a termite reprt is required, ALL Sectin 1 items must be cleared by the termite cmpany r licensed cntractr and referenced n the termite clearance prir t funding. If the clearance states items were cmpleted by thers and appear t be cmpleted in a wrkman like manner, it must nte the party that perfrmed the wrk. Sectin 2 items that are required t be repaired are listed in the table belw. The items listed belw are the mst critical items, but there are ther items that may require repair (i.e. health & safety, structural, misc. repairs) Sectin 2 items that are nt listed belw shuld be review with Crprate Underwriting fr determinatin f repair requirements. VA Purchase

7 Sectin 2 Items Any indicatin f water leak r stain n ceilings All ther majr water leaks r stains (includes Ht Water Heater) Lse r brken tilets Brken r inperable faucets Brken r inperable drs Mld Brken r cracked windws Requirement fr Cmpletin Inspect Inspected by appraiser r licensed cntractr and/r repaired by licensed rfer Inspected and repaired by licensed plumber r general cntractr. The appraiser r termite cmpany may inspect minr leaks Inspected by appraiser r licensed cntractr Inspected by appraiser r licensed cntractr Inspected by appraiser r licensed cntractr Inspected and repaired by a licensed Mld Abatement Cmpany Repaired by licensed cntractr Flips Structural wd replacement r repairs Csmetic wd replacement r repairs Allwed- N requirement Structural wd repairs: i.e. A general r building cntractr must cmplete remval and replacement f a pati deck, stairs, walls r beams. All Wd that it is replaced r repaired must be painted. Expsed wd f any kind is nt acceptable. The inspectr must state that the wd has been primed and/r painted Csmetic wd repairs: i.e. drs, dr jams, a licensed cntractr, r the seller can cmplete the repairs. All Wd that it is replaced r repaired must be painted. Expsed wd f any kind is nt acceptable. The inspectr must state that the wd has been primed and/r painted Discunt Pints Limited t 2% DTI Ratis DU/LP up t 50% - (DU must be run 1 st LP is nly allwed with Crprate Apprval) VA Purchase

8 DU/LP > 50% requires Crprate 2 nd Signature & (3) VA Cmpensating Factrs. (See Cmpensating Factrs belw fr details) Table f Residual Incme by Regin Fr lan amunts f $79,999 and belw Family size Nrtheast Midwest Suth West 1 $390 $382 $382 $425 2 $654 $641 $641 $713 3 $788 $772 $772 $859 4 $888 $868 $868 $967 5 $921 $902 $902 $1004 Over 5 Add $75 fr each additinal member up t a family f 7 Fr Lan Amunts f $80,000 and abve Family Size Nrtheast Midwest Suth West 1 $450 $441 $441 $491 2 $755 $738 $738 $823 3 $909 $899 $899 $990 4 $1,025 $1,003 $1,003 $1,117 5 $1,062 $1,039 $1,039 $1,158 Over 5 Add $80 fr each additinal member up t a family f 7 NOTE: Fr lan applicatins in which either the brrwer r the spuse is an active-duty service persn, the residual incme figures abve may be reduced by 5 percent, if there is a clear indicatin that the brrwer r spuse will cntinue t receive the benefits resulting frm the use f nearby military-based facilities. This reductin may als be applied t retired military applicants when the prperty is lcated reasnably near a military base r installatin (This reductin applies t bth f the abve tables). Credit Requirements 3 merge credit reprt required All brrwers must have a valid Scial Security Number All brrwers must have at least (2) valid credit scres. If a credit reprt is ver 45 days ld at funding, a Sft-Pull credit reprt must be btained (n FICO s required) t determine any changes. If there are n significant changes t the Sft-Pull Reprt cmpared t the riginal reprt, the riginal credit reprt can be used t fund the lan but CANNOT be lder than 90 days (120 days fr new cnstructin) at funding. If there are significant changes t the Sft-Pull credit, including any new debt, a new credit reprt must be pulled and re-submitted t DU/LP. The file must then be re-underwritten t include the new credit and DU/LP findings. NOTE: A cpy f the Sft-Pull is t be placed under Branch Dcuments in the lan package. VA requires cnsideratin f the spuse s credit (whether r nt the spuse will be persnally liable n the nte and whether r nt the applicant and spuse chse t have the spuse s incme cnsidered). Nn-Traditinal Credit is NOT allwed VA Purchase

9 All judgments must be paid in full r subject t repayment plan with a histry f timely payments 2 Years elapsed since the discharge f Chapter 7, Chapter 13 Bankruptcy r Deed in Lieu/Shrt sale when the brrwer was nt delinquent at transfer. Chapter 13 discharged <2 years requires Crprate Exceptin AND paid as agreed status frm Chapter 13 trustee fr current term, nt less than 12 mnths. 3 years elapsed since cmpletin f Freclsure, Deed in Lieu/Shrt Sale when the brrwer was delinquent at time f transfer. Nte: In a case where the brrwer(s) initial applicatin is taken befre the 3 year time frame, but nt less than 2years, an exceptin is required. Branch must the infrmatin belw with the PBM Lan Exceptin Frm dated t PBM Lan Exceptin Request, VA Lan Analysis/1003 DU/LP Apprval Credit And any ther dcumentatin assciated with the exceptin request. Disputed accunts Examples Letter f explanatin fr disputed accunt plus cpy f dcumentatin t validate reasn fr dispute (i.e. LOE and cpy f plice reprt if reasn was stlen wallet r purse ) Utilities nt paid Letter f explanatin and prf nt residing at residence at the time f issue. Late payment dispute- Letter f explanatin and prf the accunt was paid n time. High Balance- N Freclsure, Bankruptcy r Shrt Sale & Deed In-Lieu in the last 7 years. N husing payment 30 days r mre past due in the last 12 mnths. Student Lans Student lans If student lan repayments are scheduled t begin within 12 mnths f the date f VA lan clsing, the underwriter shuld cnsider the anticipated mnthly bligatin in the lan analysis. If the brrwer is able t prvide evidence that the debt may be deferred fr at least 12 mnths frm the date f the nte, the debt need nt be cnsidered in the analysis. If the student lan payment is nt reflected n the credit reprt, the underwriter shuld btain evidence t dcument the mnthly payment. VA Purchase

10 Incme Requirements DU/LP requirements t be met Verbal Verificatin f Emplyment (VVOE) within 10 days f Nte 2-4 Units: The amunt f effective rental incme is based n 75% f: Verified prir rent cllected n the units r The appraisers bservatin f prperties fair mnthly rental incme Veteran(s) that are purchasing a 2-4 unit subject prperty must indicate the reasnable likelihd f success as a landlrd. Self Emplyed Brrwer(s) Each brrwer (regardless f incme surce) must cmplete and sign separate IRS Frm 4506-T at applicatin and again with lan dcuments. P&L and Balance Sheet required if the brrwer s tax year ending has elapsed by mre than 3 mnths If using the brrwer YTD P&L t qualify, bth P&L and Balance sheet need t be audited. Brrwer(s) wh have significant declining incme cmpared t the previus 2 years, require an explanatin frm their accuntant t verify the stability f the self-emplyment incme Tax Return Transcripts Lans clsed n r after June 15, 2015 must include the 2014 Tax Return Transcripts t be eligible fr purchase. If a brrwer has filed an extensin, we require: Evidence in the file that the extensin was filed, and A 2014 Tax Transcript shwing N recrd f return filed Nte: Lans that d nt require incme (nn-credit qualifying FHA Streamlines and VA IRRRLs) are exempt. Other Incme If it is reasnable t cnclude that ther types f incme will cntinue in the freseeable future, incme may be included as effective incme. Other types f incme which may be cnsidered as effective incme include, but are nt limited t: Pensin r ther retirement benefits Disability incme (i.e. Maternity Leave) Dividends frm stcks Interest frm bnds & savings accunts Ryalties VA Purchase

11 The lender may include verified incme frm public assistance prgrams as effective incme if evidence indicates it will prbably cntinue fr 3 years r mre. The lender may include verified wrkers cmpensatin incme that will cntinue fr the freseeable future, if the veteran chses t reveal it. The lender may include verified incme received specifically fr the care f any fster child/children. Generally, fster care incme is t be used nly t balance the expenses f caring fr the fster child/children against any increased residual incme requirements. D Nt include temprary incme items such as VA educatinal allwances and unemplyment cmpensatin in effective incme. NOTE: If unemplyment cmpensatin is a regular part f the applicant s incme due t the nature f his r her emplyment (i.e. seasnal wrk) it may be included. NOTE: Fr infrmatin n Incme, please refer t VA Guide Chapter (4) Incme 4-26 Assets DU/LP requirements t be met Reserves required fr the fllwing: Lan amunts $417,001 t 699,999 = 2 mnths Lan amunts $700,000 t 1,500,000 = 3 mnths 2-4 units = 6 mnths reserves Gift Requirements It is the Underwriters respnsibility t review and clear all cnditins that apply t the gift funds. If gift cnditins are mve t Prir t Funding they will be required t be UTR Underwriter t Review cnditin ONLY. Funding dept. will NOT be allwed t clear gift funds cnditin. Cnditin must be cleared by Underwriter r Underwriting Manager. When a difference between sales price and value exist, Gift funds nt allwed. Veteran must have wn funds t pay difference. If the gift funds. Then.. Are in the brrwer s accunt Obtain A cpy f the withdrawal dcument shwing that the withdrawal is frm the dnr s accunt, and The brrwer s depsit slip & bank statement shwing the depsit VA Purchase

12 Are t be prvided at clsing, and Are in the frm f a certified check frm the dnr s accunt Obtain Bank statement shwing the withdrawal frm dnr s accunt, and Cpy f the certified check Are t be prvided at clsing, and Are in the frm f a cashiers check, mney rder, fficial check r ther type f bank check Are t be prvided at clsing, and Are in the frm f an electrnic wire transfer t the clsing agent Have the dnr prvide a withdrawal dcument r cancelled check fr the amunt f the gift, shwing that the funds came frm the dnr s persnal accunt Have the dnr Prvide Current bank statement frm the dnr t dcument available funds. Dcument the wire transfer frm dnrs accunt t escrw. NOTE: The lender must btain and keep the dcumentatin f the wire transfer in ur lan file. While the dcumentatin des nt need t be prvided in the VA binder, it must be available fr inspectin by VA when that ffice cnducts it s nsite review f lenders Are being brrwed by the dnr, and dcumentatin frm the bank r ther savings accunt is nt available Have the dnr prvide written evidence that the funds were brrwed frm an acceptable surce, nt frm a party t the transactin, including the lender IMPORTANT: Cash n Hand is NOT an acceptable surce f gift funds, nr is cmmissin incme frm realtrs (regardless f the relatinship t veteran) VA Purchase

13 Dcumentatin Requirements Fully executed Purchase Cntract and Transfer Disclsure Statement per CA state law. IRS 4506-T must be cmpleted and dated at applicatin and again at clsing fr all brrwers. IRS prcessed transcripts fr time perids cvered must be validated prir t clsing. If W-2 s exceptin apprved, IRS prcessed transcripts fr W-2 s are required T Frm must be signed and dated at applicatin and again with lan dcuments fr all Tax returns in the lan file. Example: If yu have 1040 s and 1120 s in the lan file, a separate 4506-T frm is required t be signed/dated fr the 1040 s as well as the 1120 s T frm signed and dated MUST be prcessed (transcripts) fr all tax returns in the lan file that are being used fr incme qualifying nly. i.e s, 1120 S and 1065 s. Alive and Well Statement signed by veteran and/r Cmmanding fficer (if veteran is deplyed) dated prir t the Nte date. POA allwed: Must be specific & veteran must execute the initial r final 1003 with a live signature Termite and Clearance signed by brrwer(s) Amendatry Escape Clause The Fully executed Amendatry/Escape Clauses are required fr all FHA, VA and CHF30 lans and MUST be signed and dated by all parties prir t the Nte Date. Make sure yu are reviewing the Purchase Cntracts and/r escrw instructins fr fully executed Amendatry/Escape Clause verbiage. If the purchase cntract r escrw instructins are nt reflecting the Amendatry/Escape Clause verbiage the Underwriters MUST cnditin fr a fully executed (signed and dated by all parties) escrw amendment with the Amendatry/Escape Clause verbiage dated prir t the Nte date (Prir t Lan Dcuments.) The Amendatry/Escape Clause signed/dated by all parties CANNOT be a funding cnditin since it is required t be fully executed (signed and dated by all parties) prir t the Nte date (Prir t Lan Dcuments). VA Purchase

14 If the Amendatry r escape clause verbiage is included in the purchase cntract r escrw instructins yu will nt need a separate dcument. If Amendatry r escape clause verbiage is nt in the purchase agreement r escrw instructins, yu MUST have a separate dcument signed and dated by all parties prir t the Nte Date. (Prir t Lan Dcuments) This dcument cannt be signed and date at lan dcuments. Funders MUST review the Amendatry/Escape Clause frms prir t funding t make sure they are fully executed by all parties prir t the Nte Date (Prir t Lan Dcuments) Funding will be delayed if the frm(s) are nt fully executed by all parties prir t the Nte Date (Prir t Lan Dcuments). There are situatins with nn-traditinal sellers (Fannie Mae, Freddie Mac, federal, state and lcal gvernment agencies, and mrtgagees dispsing f REO assets) where this requirement des nt apply. Clink the link and see attached fr an example f the VA escape clause VA Statement f Itemizatin t HUD 1 (lcated in Frms) Underwriting Methd Fllw DU/LP Findings- Fic scres must be met regardless f DU/LP findings Manual underwriting nly fr DU/LP apprvals dwn graded by underwriter as lng as all f the fllwing are met; 660 FICO Scre 0x30x12 Mrtgage histry, Management VOR r Cancelled checks Maximum 41% DTI, and Lan must cmply with all VA requirements fr manual underwriting. Cntact Secndary fr lender specific apprval, and In the Nte sectin f Empwer be sure t nte lan is a manual underwrite & the reasn why, and Include this infrmatin n the Lan Analysis. *Purchase Lans issued t 2 veterans with single r dual eligibility (50/50) require VA t underwrite and apprve the lan. (Excludes a husband and wife with dual eligibility when nly ne spuse s eligibility is used t qualify.) Once the lan has been cmpletely prcessed and underwritten at the branch, the file needs t cme t Crprate Office fr review by Crprate Gvt. Underwriter. Once a Crprate Underwriter has reviewed the file fr cmpleteness, the file will be sent t VA fr apprval. Turn times fr VA will depend n VA s current wrk lad. VA Purchase

15 Fully executed Max Lan Wrksheet t be cmpleted by Underwriter 1802A and 1003 must be prcessed as fllws: Veteran must be in first psitin as Primary Brrwer. Initial 1003 & pages 1 & 2 nly f the 1802A must be executed prir t lan dcuments. The 1003 page 3 and Page 1 f the 1802A must be signed by the lan fficer. Final 1003 & pages 1 & 2 nly f the 1802A must be executed at clsing. Pages 1 f the 1802A are t be executed by PBM VA Apprved Underwriter with final lan apprval date. Miscellaneus Criteria Recap f Applicatin and A Requirements FORM WHO SIGNS WHEN TO SIGN URLA Lan Applicatin -initial Brrwer (s) & Lan Officer Applicatin Initial VA Addendum A Lan Officer r Lender fr TPO Applicatin Initial VA Addendum A Brrwer (s) 2x Applicatin URLA Lan Applicatin final Brrwer(s) & Lan Officer Prir t clse Final VA Addendum A Lender (DE Underwriter r Initial Apprval Officer f authrized t bind) Final VA Addendum A page 2 Brrwer (s) 2x At clsing Shrt Sale Fees paid by the brrwer Brrwers may pay additinal fees and payments in cnnectin with purchasing a shrt sale prperty that are typically the respnsibility f the seller. Examples f shrt sale fees and payments include, but are nt limited t the fllwing: Shrt sales prcessing (i.e., shrt sale negtiatin fees, buyer discunt fees, shrt sale buyer fees) NOTE: The Shrt sale prcessing fee is nt a cmmn and custmary charge and must be treated as a sales cncessin if any prtin is reimbursed by an interested party t the transactin. Negtiated shrt payff t a subrdinate lien hlder, and Payment f delinquent taxes r delinquent hmewner assciatin (HOA) dues. NOTE: the abve referenced fees are nn GFE fees. Maximum allwable shrt sale fees that can be paid by the brrwer are 3% f the sales price. These fees and payments cannn be financed int the lan amunt and must be included n the HUD-1 settlement statement. Brrwers must fund the cst f the additinal fees and payments with their wn funds. The additinal funds t cmplete the transactin must be dcumented. The sales cntract will identify if the prperty being purchased is a shrt sale prperty. The transactin must be an arm s length (i.e., all parties are unaffiliated and unrelated). Underwriter must diligently review the purchase transactin fr unusual fees, payments, and ther pssible Red Flags that culd indicate fraudulent activity related t the shrt sale. VA Purchase

16 VA Cmpensating Factrs Seller Cntributins/ Cncessins VA Allwable and Nn- Allwable Fees Dcument Requirements The sales cntract executed by all parties with details f the additinal fees and payments. A cpy f the executed arm s length affidavit(s) verifying all parties (brrwer, seller, listing and buying agents) are unaffiliated and un related) The HUD-1 Settlement Statement that includes all brrwer paid shrt sale fees and payments, and Surce f client s funds used t cver the shrt sale fees and payments. VA Cmpensating Factrs include, but are nt limited t the fllwing: Excellent credit histry Cnservative use f cnsumer credit Minimal cnsumer debt Lng-term emplyment Significant liquid assets Sizable dwn payment The existence f equity in refinancing lans Little r n increase in shelter expense Military benefits Satisfactry hmewnership experience High residual incme Lw debt-t-incme rati Tax credits fr child care Tax benefits f hme wnership Cntributins may nt exceed 4% f the prperty value as indicated n the NOV (Ntice f Value). (Fees allwed in 4%- Pre-paid clsing cst, VA funding Fee, Pay ff f credit balance r judgments fr Veteran) VA Allwable Fees Appraisal Recrding Deed f Trust Credit Reprts Prepaids Hazard Ins. Fld Zne Determinatin Title Plicies VAFF Additinal third party fees that the veteran has authrized (Hme Inspectin) NON-Allwable Fees Base Escrw Fee Lan Tie-in Fee Demand/Payff Statement fee (k n refinance nly) Sub Escrw Fee (title payff fee) VA Purchase

17 Recnveyance Fee (k n refinance nly) Prepayment penalties (k n refinance nly) Any Lender Dcument Fee Prcessing Fee Warehuse Fee Lan Discunt Pints Charges by ther Lenders Tax Service Cntract Underwriting Fee Administratin Fee Pht Inspectin Fee Recrding Fee (grant deed) Termite Fees r wrk charges Messenger r Delivery Fees Ntary Fee Hmewners Assc. Transfer Fee Assignment Fees Dcumentary Transfer Tax Fee Bring Dwn Fee Change f Ownership Fee Cmmissin (under NO circumstances is this allwed in 1% riginatin ttals per VA) Cmmissin cannt be used fr dwn payment Transactin Crdinatr Fee Title Plicy Endrsement Fees Nte: As lng as there is n riginatin fee being charged t the veteran, the veteran can pay up t 1% f the ttal lan amunt in NON-Allwable fees. LDP/GSA CAIVRS Title Useful Links Required fr all brrwers Required fr all brrwers Clsing Prtectin Letter VA Purchase