## Chapter 5. How to Process VA Loans and Submit Them to VA

#### Overview

+-----------+----------------------------------------------------------+
| ###       | > This chapter contains the following topics.            |
| ## In thi |                                                          |
| s Chapter |                                                          |
+-----------+----------------------------------------------------------+

  ------- ------------------------------------------------------- --------
  Topic   Topic name                                              See Page

  1       Refinancing Loans                                       5-2

  2       Processing Procedures                                   5-3

  3       How to Submit Loan Documents to VA                      5-5

  4       Prior Approval Loan Procedures                          5-6

  5       Automatically Closed Loan Procedures                    5-15

  6       Submit "Other Necessary Documents"                      5-19
  ------- ------------------------------------------------------- --------

#### 1. Refinancing Loans

+------------+---------------------------------------------------------+
| ##### C    | > September 15, 2004, Change 4                          |
| hange date |                                                         |
|            | -   This section has been changed to create subsection  |
|            |     lettering.                                          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > This chapter applies, for the most part, to           |
| # a. Where | > non-refinancing loans.                                |
|  to Find I | >                                                       |
| nformation | > ***Reference***: See [chapter                         |
|            | > 6](http://                                            |
|            | www.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch06.doc) |
|            | > for information specific to refinancing loans.        |
+------------+---------------------------------------------------------+

#### 2. Processing Procedures 

+------------+---------------------------------------------------------+
| ##### C    | > September 29, 2008, Change 7                          |
| hange Date |                                                         |
|            | -   This section has been renamed Processing            |
|            |     Procedures.                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a.   | > The procedures discussed in this section may be       |
|  Order of  | > initiated and completed in any feasible order, as     |
| Completion | > long as they are all completed prior to loan closing. |
|            | > These procedures apply to both prior approval loans   |
|            | > and loans closed automatically (except the procedure  |
|            | > which specifically refers to prior approval loans).   |
|            | >                                                       |
|            | > To avoid delays in closing, it is recommended that    |
|            | > the lender take the following actions in the very     |
|            | > early stages of loan processing:                      |
|            |                                                         |
|            | -   Request VA Form 26-1880 for a Certificate of        |
|            |     Eligibility (COE), if the veteran does not already  |
|            |     have one (See [chapter                              |
|            |     2](http://ww                                        |
|            | w.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch02.doc)), |
|            |                                                         |
|            | -   Request assignment of an appraiser (See [chapter    |
|            |     10](http://ww                                       |
|            | w.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch10.doc)), |
|            |                                                         |
|            | -   Initiate CAIVRS and VA-indebtedness searches (See   |
|            |     section 6 of [chapter                               |
|            |     4](http://ww                                        |
|            | w.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc)), |
|            |     and                                                 |
|            |                                                         |
|            | -   Request credit report and verifications (See        |
|            |     [chapter                                            |
|            |     4](http://ww                                        |
|            | w.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc)). |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > Verify the veteran's eligibility for home loan        |
| # b. Obtai | > benefits and amount of available entitlement by       |
| n Certific | > obtaining a COE.                                      |
| ate of Eli |                                                         |
| gibility { | > Ensure any conditions of the COE are satisfied.       |
| #b.-obtain |                                                         |
| -certifica | > ***Reference***: See [chapter                         |
| te-of-elig | > 2](http://                                            |
| ibility .u | www.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch02.doc) |
| nnumbered} | > for details.                                          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### c. E | > Obtain a VA Notice of Value (NOV) through The         |
| stablish t | > Appraisal System (TAS) or VA Form 1843a, Master       |
| he Reasona | > Certificate of Reasonable Value (MCRV), see [chapter  |
| ble Value  | > 10](http://w                                          |
| of the Pro | ww.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch10.doc). |
| perty {#c. |                                                         |
| -establish | > Obtain evidence of compliance with any NOV            |
| -the-reaso | > requirements.                                         |
| nable-valu |                                                         |
| e-of-the-p |                                                         |
| roperty .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

Continued on next page

2\. Processing Procedures, Continued

+------------+---------------------------------------------------------+
| ##### d.   | > Determine whether the applicant meets VA's occupancy  |
| Determine  | > requirement. The loan cannot be made unless the       |
| Whether VA | > requirement is met.                                   |
| 's Occupan |                                                         |
| cy Require | > ***Reference***: See section 5 of [chapter            |
| ment is Me | > 3](http://w                                           |
| t {#d.-det | ww.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch03.doc). |
| ermine-whe |                                                         |
| ther-vas-o |                                                         |
| ccupancy-r |                                                         |
| equirement |                                                         |
| -is-met .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Complete the procedures, verifications, and loan      |
| e. Underwr | > analysis described in [chapter                        |
| ite the Lo | > 4](http://                                            |
| an {#e.-un | www.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc) |
| derwrite-t | > of this handbook.                                     |
| he-loan .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Ensure **every** active duty service member who       |
| f. Fulfill | > applies for a loan is counseled through the use of    |
|  Requireme | > [VA Form                                              |
| nts for Ac | >                                                       |
| tive Duty  | 26-0592](http://www.vba.va.gov/pubs/forms/26-0592.pdf), |
| Members {# | > Counseling Checklist for Military Homebuyers, as      |
| f.-fulfill | > early as possible in the transaction.                 |
| -requireme |                                                         |
| nts-for-ac | -   Lenders should furnish these forms to real estate   |
| tive-duty- |     brokers and builders with whom they deal and        |
| members .u |     request their assistance in providing counseling.   |
| nnumbered} |                                                         |
|            | -   The applicant's signature on the form signifies     |
|            |     that counseling has been completed.                 |
|            |                                                         |
|            |     > Ensure an applicant, eligible as an active duty   |
|            |     > member, is still on active duty at the time of    |
|            |     > closing if the Certificate of Eligibility         |
|            |     > indicates "Valid unless discharged or released    |
|            |     > subsequent to date of this certificate. A         |
|            |     > certification of continuous active duty as of the |
|            |     > date of note is required." If the lender becomes  |
|            |     > aware that the applicant is no longer on active   |
|            |     > duty, the loan may **not** be closed unless VA    |
|            |     > re-establishes the veteran's eligibility.         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### g. O | > Submit all prior approval loans to VA.                |
| btain Cert |                                                         |
| ificate of | > Obtain a VA Certificate of Commitment.                |
|  Commitmen |                                                         |
| t on Prior | > Ensure compliance with any conditions of the          |
|  Approval  | > Certificate of Commitment.                            |
| Loans {#g. |                                                         |
| -obtain-ce | > ***Reference***: See section 4 of this chapter for    |
| rtificate- | > details.                                              |
| of-commitm |                                                         |
| ent-on-pri |                                                         |
| or-approva |                                                         |
| l-loans .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

#### 3. How to Submit Loan Documents to VA {#how-to-submit-loan-documents-to-va .unnumbered}

+------------+---------------------------------------------------------+
| ##### C    | > September 29, 2008, Change 7                          |
| hange Date |                                                         |
|            | -   Subsection a has been renamed and includes          |
|            |     > instructions on when to submit documents.         |
|            |                                                         |
|            | -   Subsection d has been changed to provide updated    |
|            |     guidance regarding the use of imaged documents.     |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Generally, lenders only need to submit documents to   |
| a. Where a | > VA when the loan requires prior approval or VA        |
| nd When to | > requests copies of the origination package for full   |
|  Submit Do | > review. Lenders are strongly encouraged to use the    |
| cuments {# | > webLGY application accessed via the VA Portal (see    |
| a.-where-a | > section 5 in this chapter) when requesting guaranty.  |
| nd-when-to |                                                         |
| -submit-do | > See [Appendix                                         |
| cuments .u | > A](http://                                            |
| nnumbered} | www.warms.vba.va.gov/admin26/pamphlet/pam26_7/appa.doc) |
|            | > for a list of VA offices and their jurisdictions.     |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### b. L | > A 12-digit VA Loan Identification Number (LIN) is     |
| oan Number | > assigned to each loan by VA at the time the appraisal |
|  {#b.-loan | > is requested. Use this number electronically in VA    |
| -number .u | > systems or where requested on VA forms and other      |
| nnumbered} | > documents.                                            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ###        | > Under certain circumstances, VA requires specific     |
| ## c. Who  | > parties to execute documents. For example, a          |
| Can Sign D | > VA-approved underwriter must approve or disapprove a  |
| ocuments f | > loan for a nonsupervised automatic lender.            |
| or the Len |                                                         |
| der? {#c.- | > Where VA does not have a specific requirement, branch |
| who-can-si | > managers, employees, and agents of the lender or      |
| gn-documen | > holder may execute VA forms in the name of, and on    |
| ts-for-the | > behalf of, the principals.                            |
| -lender .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > When submitting loan documents to VA, lenders may use |
| # d. Use o | > imaged documents. However, in contrast, lenders must  |
| f Imaged D | > submit the original Certificate of Eligibility and    |
| ocuments { | > security instrument. In the event of an onsite VA     |
| #d.-use-of | > audit of closed loans, lenders must be able to        |
| -imaged-do | > provide the audit team members with printed copies of |
| cuments .u | > requested files or on-line access to records at the   |
| nnumbered} | > auditor's request.                                    |
|            |                                                         |
|            | > ***Note*:** Lenders are expected to continually       |
|            | > monitor the integrity of their imaging system to      |
|            | > ensure consistent quality and to prevent unauthorized |
|            | > alternation or destruction of records.                |
+------------+---------------------------------------------------------+

#### 4. Prior Approval Loan Procedures {#prior-approval-loan-procedures .unnumbered}

+------------+---------------------------------------------------------+
| ##### C    | > September 29, 2008, Change 7                          |
| hange Date |                                                         |
|            | -   Subsection a removed cooperative loans from the     |
|            |     > list of loans requiring prior approval.           |
|            |                                                         |
|            | -   Subsection c, step 2, has been changed to delete    |
|            |     > references to form numbers for Certificates of    |
|            |     > Eligibility.                                      |
|            |                                                         |
|            | -   Subsection j has been changed to delete the         |
|            |     requirement for VA Form 26-0285, VA Transmittal     |
|            |     List, and the VA Funding Fee receipt. VA Form       |
|            |     26-0285 is no longer required and funding fee       |
|            |     information is now automatically captured in VA     |
|            |     systems. The subsection has been renumbered.        |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a    | > Lenders without automatic authority must submit all   |
| . Which Lo | > loans to VA for prior approval, except IRRRLs made to |
| ans are Su | > refinance loans that are **not** delinquent.          |
| bmitted fo |                                                         |
| r Prior Ap | > All lenders, whether or not they have automatic       |
| proval? {# | > authority, **must** submit the following types of     |
| a.-which-l | > loans to VA for prior approval:                       |
| oans-are-s |                                                         |
| ubmitted-f | -   Joint loans.                                        |
| or-prior-a |                                                         |
| pproval .u | -   Loans to veterans in receipt of VA                  |
| nnumbered} |     nonservice-connected pension.                       |
|            |                                                         |
|            | -   Loans to veterans rated incompetent by VA.          |
|            |                                                         |
|            | -   Interest Rate Reduction Refinancing Loans made to   |
|            |     refinance delinquent VA loans.                      |
|            |                                                         |
|            | -   Manufactured home loans (**except** when the        |
|            |     manufactured home is permanently affixed to the lot |
|            |     and considered real estate under state law), unless |
|            |     the lender has been separately approved for this    |
|            |     purpose.                                            |
|            |                                                         |
|            | -   Unsecured loans or loans secured by less than a     |
|            |     first lien.                                         |
|            |                                                         |
|            | -   Supplemental loans.                                 |
|            |                                                         |
|            |     > ***Note***: [VA Form                              |
|            |     >                                                   |
|            | 26-8937](http://www.vba.va.gov/pubs/forms/26-8937.pdf), |
|            |     > Verification of VA Benefits, will indicate        |
|            |     > whether the veteran receives VA                   |
|            |     > nonservice-connected pension or has been rated    |
|            |     > incompetent by VA. See "Debt Related to VA        |
|            |     > Benefits" in section 6 of [chapter                |
|            |     > 4](http://w                                       |
|            | ww.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc). |
+------------+---------------------------------------------------------+

Continued on next page

4\. Prior Approval Loan Procedures, Continued

+------------+---------------------------------------------------------+
| a\. Which  | > Lenders with automatic authority may also elect to    |
| Loans are  | > submit a loan (of a type not on the above list) for   |
| Submitted  | > prior approval when issues or circumstances cannot be |
| for Prior  | > resolved by the lender's own underwriting staff.      |
| Approval?  |                                                         |
| (          | -   The submission must include the underwriter's       |
| continued) |     analysis and explanation of why it is being         |
|            |     submitted for prior approval.                       |
|            |                                                         |
|            | -   Do **not** use this provision to shift the burden   |
|            |     of a loan denial to VA.                             |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > Before submitting the loan documents to VA for prior  |
| ### b. Bef | > approval:                                             |
| ore Reques |                                                         |
| ting Prior | -   Establish the reasonable value of the property      |
|  Approval  |     (appraisal).                                        |
| {#b.-befor |                                                         |
| e-requesti | -   Underwrite the loan (See [chapter                   |
| ng-prior-a |     4](http://ww                                        |
| pproval .u | w.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc)). |
| nnumbered} |                                                         |
|            | -   Ensure active duty members receive counseling using |
|            |     [VA Form                                            |
|            |     26-0592](ht                                         |
|            | tp://vbaw.vba.va.gov/bl/20/cio/20s5/forms/26-0592.pdf). |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Submit the following documents to VA in the order     |
| c. How to  | > listed.                                               |
| Request Pr |                                                         |
| ior Approv |                                                         |
| al {#c.-ho |                                                         |
| w-to-reque |                                                         |
| st-prior-a |                                                         |
| pproval .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

+-------+--------------------------------------------------------------+
| Order | Document                                                     |
+-------+--------------------------------------------------------------+
| 1     | Lender's cover or transmittal letter (if used).              |
+-------+--------------------------------------------------------------+
| 2     | Certificate of Eligibility.                                  |
+-------+--------------------------------------------------------------+
| 3     | URLA (Uniform Residential Loan Application) with revised [VA |
|       | Form                                                         |
|       | 26-1802a](http://www.vba.va.gov/pubs/forms/26-1802a.pdf),    |
|       | HUD/VA Addendum to URLA.                                     |
|       |                                                              |
|       | -   These forms must be signed and dated.                    |
|       |                                                              |
|       | -   These forms must be properly completed and legible, but  |
|       |     do not have to be typed.                                 |
+-------+--------------------------------------------------------------+
| 4     | Interest Rate and Discount Disclosures Statement.            |
+-------+--------------------------------------------------------------+
| 5     | [VA Form                                                     |
|       | 26-0592](http://www.vba.va.gov/pubs/forms/26-0592.pdf),      |
|       | Counseling Checklist for Military Homebuyers, if applicant   |
|       | is on active duty.                                           |
+-------+--------------------------------------------------------------+
| 6     | [VA Form                                                     |
|       | 26-8937](http://www.vba.va.gov/pubs/forms/26-8937.pdf),      |
|       | Verification of VA Benefits (if applicable).                 |
+-------+--------------------------------------------------------------+
| 7     | [VA Form                                                     |
|       | 26-6393](http://www.vba.va.gov/pubs/forms/26-6393.pdf), Loan |
|       | Analysis.                                                    |
+-------+--------------------------------------------------------------+
| 8     | All original credit reports obtained in connection with the  |
|       | loan and any related documentation.                          |
+-------+--------------------------------------------------------------+

Continued on next page

4\. Prior Approval Loan Procedures, Continued

  -----------------------------------------------------------------------
  c\. How to Request Prior Approval (continued)

  -----------------------------------------------------------------------

+-------+--------------------------------------------------------------+
| Order | Document                                                     |
+-------+--------------------------------------------------------------+
| 9     | [VA Form                                                     |
|       | 26-8497a](http://www.vba.va.gov/pubs/forms/26-8497a.PDF),    |
|       | Request for Verification of Deposit, and other related       |
|       | documents (Alternative documentation: Original or certified  |
|       | true copies of the last 2 bank statements).                  |
+-------+--------------------------------------------------------------+
| 10    | [VA Form                                                     |
|       | 26-8497](http://www.vba.va.gov/pubs/forms/26-8497.pdf),      |
|       | Request for Verification of Employment, and other            |
|       | verifications of income such as pay stubs and tax returns.   |
|       |                                                              |
|       | ***Reference***: See section 2 of [chapter                   |
|       | 4](htt                                                       |
|       | p://www.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc). |
+-------+--------------------------------------------------------------+
| 11    | Purchase/earnest money contracts.                            |
+-------+--------------------------------------------------------------+
| 12    | -   Notice of Value (NOV) and any special requirements or    |
|       |     conditions applicable to the property.                   |
|       |                                                              |
|       |     > VA Form 26-1843a, Master Certificate of Reasonable     |
|       |     > Value (MCRV), if applicable, with any applicable       |
|       |     > endorsements and/or change orders.                     |
|       |                                                              |
|       |     > Highlight to show lot and block identification, house  |
|       |     > type valuation, and optional equipment applicable to   |
|       |     > veteran's purchase.                                    |
+-------+--------------------------------------------------------------+
| 13    | The original Freddie Mac Form 70/Fannie Mae Form 1004,       |
|       | Uniform Residential Appraisal Report (URAR), including all   |
|       | addendums, photographs and any document(s) revising or       |
|       | correcting the fee appraiser's original URAR.                |
|       |                                                              |
|       | > ***Note***: The URAR and attending information are **not** |
|       | > required when VA Form 26-1843a, MCRV, is submitted.        |
+-------+--------------------------------------------------------------+
| 14    | Any other necessary documents.                               |
|       |                                                              |
|       | ***Reference***: See section 6 of this chapter.              |
+-------+--------------------------------------------------------------+

Continued on next page

4\. Prior Approval Loan Procedures, Continued

+------------+---------------------------------------------------------+
| ###        | > VA will review the documents submitted and do one of  |
| ## d. What | > the following:                                        |
|  Happens N |                                                         |
| ext? {#d.- | -   Suspend processing and request additional           |
| what-happe |     information from the lender,                        |
| ns-next .u |                                                         |
| nnumbered} | -   Send a notice of denial to the lender and           |
|            |     applicant, or                                       |
|            |                                                         |
|            | -   Issue VA Form 26-1866, Certificate of Commitment,   |
|            |     to the lender, evidencing approval of the loan.     |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### e.   | > The Certificate of Commitment is the lender's         |
|  Certifica | > evidence of VA's approval of the loan. The lender is  |
| te of Comm | > subsequently entitled to evidence of guaranty if:     |
| itment {#e |                                                         |
| .-certific | -   The closed loan is identical in all respects to     |
| ate-of-com |     that submitted to VA on the URLA and described on   |
| mitment .u |     the Certificate of Commitment (or, if not           |
| nnumbered} |     identical, any required VA approval of changes was  |
|            |     obtained prior to closing), and                     |
|            |                                                         |
|            | -   The lender has complied with all applicable         |
|            |     provisions of the law and loan guaranty regulations |
|            |     in making the loan.                                 |
|            |                                                         |
|            |     > If, at any time prior to closing, the lender or   |
|            |     > VA has reason to doubt the continued              |
|            |     > qualification of the loan, the lender will delay  |
|            |     > closing until all facts are determined.           |
|            |                                                         |
|            |     > VA may cancel a commitment if the validity period |
|            |     > of the Certificate of Commitment has expired and  |
|            |     > there is no reasonable expectation that the loan  |
|            |     > will be reported for guaranty.                    |
+------------+---------------------------------------------------------+

Continued on next page

4\. Prior Approval Loan Procedures, Continued

+------------+---------------------------------------------------------+
| ##### f.   | > Generally, changes to the loan occurring between      |
|  Changes O | > issuance of the Certificate of Commitment and loan    |
| ccurring A | > closing must be approved by VA. The following table   |
| fter Issua | > lists:                                                |
| nce of the |                                                         |
|  Certifica | -   Exceptions to VA's prior approval of changes        |
| te of Comm |     requirement, and                                    |
| itment {#f |                                                         |
| .-changes- | -   Circumstances that warrant special instructions.    |
| occurring- |                                                         |
| after-issu |                                                         |
| ance-of-th |                                                         |
| e-certific |                                                         |
| ate-of-com |                                                         |
| mitment .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

+-----------------------------------+-----------------------------------+
| If ...                            | Then ...                          |
+-----------------------------------+-----------------------------------+
| An increase in the amount of down | No VA approval is needed.         |
| payment decreases the loan amount |                                   |
| (with or without a reduction in   | Include an explanation of the     |
| the term of the loan) and there   | change with the closing package.  |
| is **no** increase in the monthly |                                   |
| mortgage payments,                |                                   |
+-----------------------------------+-----------------------------------+
| The maturity of the loan is       | No VA approval is needed.         |
| extended, but does not exceed the |                                   |
| maximum of 30 years and 32 days   | Include an explanation of the     |
| or the remaining economic life of | change with the closing package.  |
| the property as provided by the   |                                   |
| NOV, and there is no increase in  |                                   |
| the monthly mortgage payments,    |                                   |
+-----------------------------------+-----------------------------------+
| The loan amount is increased to   | No VA approval is needed.         |
| cover the cost of energy          |                                   |
| efficiency improvements up to     | > See section 3 of [chapter       |
| \$6,000,                          | >                                 |
|                                   |  7](http://www.warms.vba.va.gov/a |
|                                   | dmin26/pamphlet/pam26_7/ch07.doc) |
|                                   | > for special underwriting        |
|                                   | > requirements and documentation  |
|                                   | > required with the closing       |
|                                   | > package.                        |
+-----------------------------------+-----------------------------------+
| Discount points to be paid by the | No VA approval is needed.         |
| applicant increase by any amount  |                                   |
| over the points indicated on the  | Include with closing package:     |
| Certificate of Commitment,        |                                   |
|                                   | -   An explanation of the change. |
|                                   |                                   |
|                                   | -   The URLA with changes         |
|                                   |     initialed and dated by the    |
|                                   |     applicant.                    |
|                                   |                                   |
|                                   | -   If previously verified assets |
|                                   |     are not sufficient to cover   |
|                                   |     the additional points,        |
|                                   |     verification of sufficient    |
|                                   |     additional assets.            |
+-----------------------------------+-----------------------------------+

Continued on next page

4\. Prior Approval Loan Procedures, Continued

  -----------------------------------------------------------------------
  f\. Changes Occurring After Issuance of the Certificate of Commitment
  (continued)

  -----------------------------------------------------------------------

+-------------------------------------+--------------------------------+
| If ...                              | Then ...                       |
+-------------------------------------+--------------------------------+
| The loan is to be closed at an      | VA approval is needed.         |
| interest rate more than 1% greater  |                                |
| than the rate indicated on the      | Submit the Certificate of      |
| Certificate of Commitment,          | Commitment and a new URLA,     |
|                                     | signed and dated by the        |
|                                     | applicant, or the original     |
|                                     | URLA with the change initialed |
|                                     | and dated by the applicant, to |
|                                     | VA for re-underwriting.        |
+-------------------------------------+--------------------------------+

+------------+---------------------------------------------------------+
| ####       | > VA may issue a conditional commitment in the          |
| # g. Condi | > following seven types of cases. The lender must       |
| tional Com | > ensure compliance with the condition prior to loan    |
| mitments { | > closing.                                              |
| #g.-condit |                                                         |
| ional-comm |                                                         |
| itments .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

+-----------------------+----------------------------------------------+
| Case                  | Condition/Notation on Certificate            |
+-----------------------+----------------------------------------------+
| Loan is to the spouse | "Prior to closing the subject loan, the      |
| of a serviceperson    | lender should obtain assurance from the      |
| missing in action or  | borrower that official notice of any change  |
| prisoner of war       | in the servicemember's status has not been   |
| (MIA/POW)             | received and that the applicant is still the |
|                       | spouse of the servicemember."                |
|                       |                                              |
|                       | ***Reference***: See section 6 of this       |
|                       | chapter for required documentation.          |
+-----------------------+----------------------------------------------+
| Loan is to the        | "Conditioned on borrower's certification     |
| unmarried surviving   | that status as an unmarried surviving spouse |
| spouse of an          | has not changed since the Certificate of     |
| eligible, deceased    | Eligibility was issued."                     |
| veteran               |                                              |
|                       | ***Reference***: See section 6 of this       |
|                       | chapter for required documentation.          |
+-----------------------+----------------------------------------------+

Continued on next page

4\. Prior Approval Loan Procedures, Continued

  -----------------------------------------------------------------------
  g\. Conditional Commitments (continued)

  -----------------------------------------------------------------------

+--------------------+-------------------------------------------------+
| Case               | Condition/Notation on Certificate               |
+--------------------+-------------------------------------------------+
| Loan is to a       | "Certification of active duty status as of date |
| service person who | of note required."                              |
| has not received   |                                                 |
| an honorable       | > To ensure compliance, check the active duty   |
| discharge and must | > box in Section III, Veteran's Certifications, |
| certify to         | > on [VA Form                                   |
| continuous active  | > 26-1820]                                      |
| duty               | (http://www.vba.va.gov/pubs/forms/26-1820.pdf), |
|                    | > Report and Certification of Loan              |
|                    | > Disbursement. Ensure that the veteran signs   |
|                    | > the form.                                     |
+--------------------+-------------------------------------------------+
| Loan is to a       | "Conditioned on proof of marriage prior to loan |
| veteran and        | closing."                                       |
| fiancé/fiancée who |                                                 |
| intend to marry    | A copy of the applicant's marriage certificate  |
| prior to loan      | or other proof of marriage must be submitted    |
| closing - title is | with the closing package. A marriage license is |
| to be taken in the | inadequate.                                     |
| name of veteran    |                                                 |
| and spouse         |                                                 |
+--------------------+-------------------------------------------------+
| Loan involves use  | "No evidence of guaranty with respect to the    |
| of an attorney in  | loan to which this commitment relates will be   |
| fact               | issued by the Secretary unless the lender makes |
|                    | the certification specified by the Department   |
|                    | of Veterans Affairs at the time the lender      |
|                    | requests a certificate of guaranty to the       |
|                    | effect that the veteran was alive and, if the   |
|                    | veteran is on active military duty, not in a    |
|                    | "missing in action" status on the date the note |
|                    | and security instruments were executed on the   |
|                    | veteran's behalf by the attorney-in-fact."      |
|                    |                                                 |
|                    | ***Reference***: See section 6 of this chapter  |
|                    | for required documentation.                     |
+--------------------+-------------------------------------------------+

Continued on next page

4\. Prior Approval Loan Procedures, Continued

  -----------------------------------------------------------------------
  g\. Conditional Commitments (continued)

  -----------------------------------------------------------------------

+--------------------+-------------------------------------------------+
| Case               | Condition/Notation on Certificate               |
+--------------------+-------------------------------------------------+
| Veteran intends to | "This commitment is conditioned upon submission |
| sell property on   | of evidence of disposal of the property which   |
| which he/she has   | the veteran now owns and previously purchased   |
| an existing VA     | using VA entitlement and evidence that the loan |
| loan prior to      | has been paid in full or that an eligible       |
| closing on the new | veteran has substituted his or her entitlement  |
| VA loan, in order  | for that used by the original veteran."         |
| to have            |                                                 |
| entitlement        | > ***Reference***: See section 6 of this        |
| restored           | > chapter for required documentation.           |
+--------------------+-------------------------------------------------+
| Veteran intends to | "This commitment is conditioned upon the        |
| sell property in   | consummation of the sale of residential real    |
| order to have      | property now owned by the veteran, as proposed  |
| sufficient income  | in the loan application."                       |
| and/or assets to   |                                                 |
| qualify for the    | > ***Reference***: See section 6 of this        |
| loan               | > chapter for required documentation.           |
+--------------------+-------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### h. J | > See section 1 of [chapter                             |
| oint Loans | > 7](http://w                                           |
|  {#h.-join | ww.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch07.doc). |
| t-loans .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### i    | > Complete all applicable procedures in section 2 of    |
| . Before C | > this chapter.                                         |
| losing  {# |                                                         |
| i.-before- |                                                         |
| closing .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

Continued on next page

4\. Prior Approval Loan Procedures, Continued

+------------+---------------------------------------------------------+
| ##         | > A loan must be reported to VA within 60 days of       |
| ### j. How | > closing. A lender that fails to meet this time limit  |
|  to Report | > must provide a written explanation (see item 8        |
|  Loan Clos | > below).                                               |
| ing and Re |                                                         |
| quest Guar | > To report a prior approval loan, submit the following |
| anty {#j.- | > documents to VA, in the order listed.                 |
| how-to-rep |                                                         |
| ort-loan-c |                                                         |
| losing-and |                                                         |
| -request-g |                                                         |
| uaranty .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

+-------+--------------------------------------------------------------+
| Order | Document                                                     |
+-------+--------------------------------------------------------------+
| 1     | Lender's cover or transmittal letter (if used).              |
+-------+--------------------------------------------------------------+
| 2     | > [VA Form                                                   |
|       | > 26-0286](http://www.vba.va.gov/pubs/forms/26-0286.pdf), VA |
|       | > Loan Summary Sheet.                                        |
+-------+--------------------------------------------------------------+
| 3     | [VA Form                                                     |
|       | 26-1820](http://www.vba.va.gov/pubs/forms/26-1820.pdf),      |
|       | Report and Certification of Loan Disbursement.               |
+-------+--------------------------------------------------------------+
| 4     | Lender's quality certification per 38 CFR part 36 and 38     |
|       | U.S.C. Chapter 37 (See step 7 of the Lender Procedures in    |
|       | section 1 of [chapter                                        |
|       | 4](http                                                      |
|       | ://www.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc)). |
+-------+--------------------------------------------------------------+
| 5     | [HUD                                                         |
|       | -1](http://www.hudclips.org/sub_nonhud/html/pdfforms/1.pdf), |
|       | Settlement Statement.                                        |
+-------+--------------------------------------------------------------+
| 6     | Evidence of compliance with MCRV or NOV requirements; for    |
|       | example, final compliance inspection, termite certification, |
|       | warranty, etc.                                               |
+-------+--------------------------------------------------------------+
| 7     | If a loan is submitted more than 60 days after loan closing, |
|       | a statement signed by a corporate officer of the lender that |
|       | identifies the loan and provides the specific reason(s) why  |
|       | the loan was not submitted on time.                          |
+-------+--------------------------------------------------------------+
| 8     | > Any other necessary documents.                             |
|       |                                                              |
|       | > ***Reference***: See section 6 of this chapter.            |
+-------+--------------------------------------------------------------+

#### 5. Automatically Closed Loan Procedures {#automatically-closed-loan-procedures .unnumbered}

+------------+---------------------------------------------------------+
| ##### C    | > September 29, 2008, Change 7                          |
| hange Date |                                                         |
|            | -   Subsection a has been updated to include the        |
|            |     electronic loan guaranty submission procedure and   |
|            |     to reflect the modified guaranty submission         |
|            |     procedure (if necessary). The list in this section  |
|            |     has been renumbered.                                |
|            |                                                         |
|            | -   Subsection b has been added to identify full review |
|            |     procedures and delete the funding fee receipt       |
|            |     requirement.                                        |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > Loan Guaranty Certificate (LGC) is the lender\'s      |
| # a. How t | > record that VA has guaranteed the loan. See section   |
| o Request  | > 11 of [chapter                                        |
| Guaranty { | > 3](http://                                            |
| #a.-how-to | www.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch03.doc) |
| -request-g | > for an explanation of what evidence of guaranty means |
| uaranty .u | > to the lender.                                        |
| nnumbered} |                                                         |
|            | > Lenders are strongly encouraged to use VA's web-based |
|            | > Loan Guaranty program, webLGY (available through the  |
|            | > VA Portal) to obtain electronic LGCs. This program    |
|            | > enables participating lenders to electronically       |
|            | > submit a loan to VA for guaranty.                     |
|            |                                                         |
|            | > Lenders benefit from this type of processing in many  |
|            | > ways, including:                                      |
|            |                                                         |
|            | -   Almost immediate receipt of the LGC.                |
|            |                                                         |
|            | -   No need to mail loan documents to VA (unless        |
|            |     selected for an audit review).                      |
|            |                                                         |
|            | -   Ability to submit loans for guaranty virtually      |
|            |     anytime.                                            |
|            |                                                         |
|            | -   No need to complete VA Form 26-0286, VA Loan        |
|            |     Summary Sheet.                                      |
|            |                                                         |
|            | -   Ability to deliver final documents to investors     |
|            |     quickly, enabling investors to purchase pool loans  |
|            |     faster, which reduces costs of carrying the loan.   |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   ***Note:*** Lenders must ensure that all required   |
|            |     > documents listed in subsection b below are        |
|            |     > retained and available to submit to VA for        |
|            |     > possible future audit requests.                   |
+------------+---------------------------------------------------------+

Continued on next page

5\. Automatically Closed Loan Procedures, Continued

+-----------------------------------------------------------------------+
| +-----------+-----------------------------------------------------+   |
| | #####     | > If a lender is unable to obtain an electronic     |   |
| | a. How to | > LGC, the following documents should be submitted  |   |
| |  Request  | > to VA, in the order listed. VA will then issue    |   |
| | Guaranty  | > the LGC or notify the lender of additional        |   |
| | (continue | > information needed for LGC issuance.              |   |
| | d) {#a.-h |                                                     |   |
| | ow-to-req |                                                     |   |
| | uest-guar |                                                     |   |
| | anty-cont |                                                     |   |
| | inued .un |                                                     |   |
| | numbered} |                                                     |   |
| +-----------+-----------------------------------------------------+   |
|                                                                       |
| #####  {#section .unnumbered}                                         |
+-----------------------------------------------------------------------+

+-------+--------------------------------------------------------------+
| Order | Document                                                     |
+-------+--------------------------------------------------------------+
| 1     | [VA Form                                                     |
|       | 26-0286](http://www.vba.va.gov/pubs/forms/26-0286.pdf), VA   |
|       | Loan Summary Sheet.                                          |
+-------+--------------------------------------------------------------+
| 2     | > Certificate of Eligibility.                                |
+-------+--------------------------------------------------------------+
| 3     | > Notice of Value (NOV) or copy of Master Certificate of     |
|       | > Reasonable Value (MCRV) with the home model and any        |
|       | > selected options highlighted.                              |
+-------+--------------------------------------------------------------+
| 4     | [VA Form                                                     |
|       | 26-1820](http://www.vba.va.gov/pubs/forms/26-1820.pdf),      |
|       | Report and Certification of Loan Disbursement.               |
+-------+--------------------------------------------------------------+
| 5     | [HUD                                                         |
|       | -1](http://www.hudclips.org/sub_nonhud/html/pdfforms/1.pdf), |
|       | Settlement Statement.                                        |
+-------+--------------------------------------------------------------+
| 6     | Name, mailing address, and e-mail address to be used in      |
|       | requesting file for full review or post audit.               |
+-------+--------------------------------------------------------------+
| 7     | If a loan is submitted more than 60 days after loan closing, |
|       | a statement signed by a corporate officer of the lender      |
|       | which identifies the loan, provides the specific reasons for |
|       | late reporting and certifies that the loan is current. This  |
|       | statement must be submitted with any late request for        |
|       | issuance of a Loan Guaranty Certificate.                     |
+-------+--------------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > Lenders will be notified, either immediately by the   |
| ### b. Ful | > web-based system or in writing by VA offices, when a  |
| l Review P | > loan has been selected for full review. Lenders must  |
| rocedures  | > forward the complete loan file to the appropriate VA  |
| {#b.-full- | > office within 15 days of receiving notification from  |
| review-pro | > VA.                                                   |
| cedures .u |                                                         |
| nnumbered} | > ***Note:*** If VA finds significant deficiencies in a |
|            | > loan submission, the lender will be notified.         |
|            |                                                         |
|            | > The following documents should be submitted when a    |
|            | > full review notification has been received:           |
+------------+---------------------------------------------------------+

+-------+--------------------------------------------------------------+
| Order | Document                                                     |
+-------+--------------------------------------------------------------+
| 1     | Lender's cover or transmittal letter (if used).              |
+-------+--------------------------------------------------------------+
| 2     | > [VA Form                                                   |
|       | > 26-0286](http://www.vba.va.gov/pubs/forms/26-0286.pdf), VA |
|       | > Loan Summary Sheet.                                        |
+-------+--------------------------------------------------------------+
| 3     | > Certificate of Eligibility.                                |
+-------+--------------------------------------------------------------+
| 4     | VA Form                                                      |
|       | [26-6393](https://www.vaforms.vba.va.                        |
|       | gov/VBARF/getformharness.asp?formName=vba-26-6393-form.xft), |
|       | Loan Analysis.                                               |
+-------+--------------------------------------------------------------+

*Continued on next page*

5\. Automatically Closed Loan Procedures, Continued

+------------+-----+---------------------------------------------------+
| ###        |     |                                                   |
| ## b. Full |     |                                                   |
|  Review Pr |     |                                                   |
| ocedures ( |     |                                                   |
| continued) |     |                                                   |
+------------+-----+---------------------------------------------------+
|            | Or  | Document                                          |
|            | der |                                                   |
+------------+-----+---------------------------------------------------+
|            | 5   | For Automated Underwriting cases: Feedback        |
|            |     | Certificate and underwriter's certification       |
|            |     | (acceptable variations on the documentation       |
|            |     | required in items 17, 18, and 19 below, and the   |
|            |     | underwriter's certification, are explained in     |
|            |     | section 8 of [chapter                             |
|            |     | 4](http://www.warm                                |
|            |     | s.vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc)). |
+------------+-----+---------------------------------------------------+
|            | 6   | VA Form                                           |
|            |     | [26-182                                           |
|            |     | 0](http://www.vba.va.gov/pubs/forms/26-1820.pdf), |
|            |     | Report and Certification of Loan Disbursement.    |
+------------+-----+---------------------------------------------------+
|            | 7   | Lender's quality certification per 38 CFR part 36 |
|            |     | and 38 U.S.C. Chapter 37 (See step 7 of the       |
|            |     | Lender Procedures in section 1 of [chapter        |
|            |     | 4](http://www.warms                               |
|            |     | .vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc).). |
+------------+-----+---------------------------------------------------+
|            | 8   | VA Form                                           |
|            |     | [26-8937](https://www.vaforms.vba.va.gov/VBARF/g  |
|            |     | etformharness.asp?formName=vba-26-8937-form.xft), |
|            |     | Verification of VA Benefits (if applicable).      |
+------------+-----+---------------------------------------------------+
|            | 9   | [HUD-1](http://                                   |
|            |     | www.hudclips.org/sub_nonhud/html/pdfforms/1.pdf), |
|            |     | Settlement Statement.                             |
+------------+-----+---------------------------------------------------+
|            | 10  | Evidence of compliance with MCRV or NOV           |
|            |     | requirements; such as, final compliance           |
|            |     | inspection, termite certification, and/or         |
|            |     | warranty.                                         |
+------------+-----+---------------------------------------------------+
|            | 11  | > If a loan is submitted more than 60 days after  |
|            |     | > loan closing, a statement signed by a corporate |
|            |     | > officer of the lender which identifies the      |
|            |     | > loan, provides the specific reasons for late    |
|            |     | > reporting and certifies that the loan is        |
|            |     | > current. This statement must be submitted with  |
|            |     | > any late request for issuance of a Loan         |
|            |     | > Guaranty Certificate.                           |
+------------+-----+---------------------------------------------------+
|            | 12  | > Interest Rate and Discount Disclosure           |
|            |     | > Statement.                                      |
+------------+-----+---------------------------------------------------+
|            | 13  | > [VA Form                                        |
|            |     | > 26-059                                          |
|            |     | 2](http://www.vba.va.gov/pubs/forms/26-0592.pdf), |
|            |     | > Counseling Checklist for Military Homebuyers,   |
|            |     | > if applicant is on active duty.                 |
+------------+-----+---------------------------------------------------+
|            | 14  | > Uniform Residential Loan Application (URLA)     |
|            |     | > with revised VA Form                            |
|            |     | > [                                               |
|            |     | 26-1802a](https://www.vaforms.vba.va.gov/VBARF/ge |
|            |     | tformharness.asp?formName=vba-26-1802a-form.xft), |
|            |     | > HUD/VA Addendum to URLA.                        |
|            |     |                                                   |
|            |     | -   These forms may be signed and dated anytime   |
|            |     |     from the date of initial application to the   |
|            |     |     date of loan closing.                         |
|            |     |                                                   |
|            |     | -   These forms must be properly completed and    |
|            |     |     legible, but do not have to be typed.         |
+------------+-----+---------------------------------------------------+
|            | 15  | > All original credit reports obtained in         |
|            |     | > connection with the loan and any related        |
|            |     | > documentation.                                  |
+------------+-----+---------------------------------------------------+
|            | 16  | > VA Form                                         |
|            |     | > [                                               |
|            |     | 26-8497](https://www.vaforms.vba.va.gov/VBARF/get |
|            |     | formharness.asp?formName=vba-26-8497-form.xft)*,* |
|            |     | > Request for Verification of Employment, and     |
|            |     | > other verifications of income such as pay stubs |
|            |     | > and tax returns.                                |
|            |     |                                                   |
|            |     | > ***Reference***: See section 2 of [chapter      |
|            |     | > 4](http://www.war                               |
|            |     | ms.vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc). |
+------------+-----+---------------------------------------------------+
|            | 17  | > VA Form                                         |
|            |     | > [                                               |
|            |     | 26-8497a](https://www.vaforms.vba.va.gov/VBARF/ge |
|            |     | tformharness.asp?formName=vba-26-8497a-form.xft), |
|            |     | > Request for Verification of Deposit, and other  |
|            |     | > related documents (Alternative documentation:   |
|            |     | > Original or certified true copies of last 2     |
|            |     | > bank statements).                               |
+------------+-----+---------------------------------------------------+
|            | 18  | > Purchase/earnest money contracts.               |
+------------+-----+---------------------------------------------------+

Continued on next page

5\. Automatically Closed Loan Procedures, Continued

+------------+-----+---------------------------------------------------+
| ###        |     |                                                   |
| ## b. Full |     |                                                   |
|  Review Pr |     |                                                   |
| ocedures ( |     |                                                   |
| continued) |     |                                                   |
+------------+-----+---------------------------------------------------+
|            | Or  | Document                                          |
|            | der |                                                   |
+------------+-----+---------------------------------------------------+
|            | 19  | -   LAPP NOV and any special requirements or      |
|            |     |     conditions applicable to the property.        |
|            |     |                                                   |
|            |     | -   VA Form 26-1843a, Master Certificate of       |
|            |     |     Reasonable Value (MCRV), with any applicable  |
|            |     |     endorsements and/or change orders.            |
|            |     |                                                   |
|            |     |     > Highlight to show lot and block             |
|            |     |     > identification, house type valuation, and   |
|            |     |     > optional equipment applicable to veteran's  |
|            |     |     > purchase.                                   |
+------------+-----+---------------------------------------------------+
|            | 20  | The original Freddie Mac Form 70/Fannie Mae Form  |
|            |     | 1004, Uniform Residential Appraisal Report        |
|            |     | (URAR), including all addendums, photographs and  |
|            |     | any document(s) revising or correcting the fee    |
|            |     | appraiser's original URAR.                        |
|            |     |                                                   |
|            |     | > ***Note***: The URAR and attending information  |
|            |     | > is **not** required when VA Form 26-1843a,      |
|            |     | > MCRV, is submitted.                             |
+------------+-----+---------------------------------------------------+
|            | 21  | Any other necessary documents.                    |
|            |     |                                                   |
|            |     | ***Reference***: See section 6 of this chapter.   |
+------------+-----+---------------------------------------------------+

#### 6. Submit "Other Necessary Documents" {#submit-other-necessary-documents .unnumbered}

+------------+---------------------------------------------------------+
| ##### C    | > September 29, 2008, Change 7                          |
| hange Date |                                                         |
|            | -   Subsection a has been modified by adding an example |
|            |     > of "other documents."                             |
|            |                                                         |
|            | -   Subsection b has been changed to delete VA Form     |
|            |     > 26-1847, Request for Postponement of Offsite or   |
|            |     > Onsite Improvements-Home Loan, and VA Form        |
|            |     > 26-6378, Escrow Agreement for Postponed Exterior  |
|            |     > Offsite Improvements, which have been             |
|            |     > discontinued.                                     |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a    | > Other necessary documents are verifications,          |
| . What are | > explanations, forms, etc., that are either:           |
|  Other Nec |                                                         |
| essary Doc | -   Required by VA under certain circumstances, or      |
| uments? {# |                                                         |
| a.-what-ar | -   Necessary to clarify some aspect of the loan or the |
| e-other-ne |     borrower's qualifications. (For example, lender     |
| cessary-do |     and/or borrower explanations for adverse credit.)   |
| cuments .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > The table below provides some of the circumstances    |
| b. Circums | > for which VA requires specific additional             |
| tances Req | > documentation to be submitted with the loan closing   |
| uiring Add | > package.                                              |
| itional Do |                                                         |
| cuments {# |                                                         |
| b.-circums |                                                         |
| tances-req |                                                         |
| uiring-add |                                                         |
| itional-do |                                                         |
| cuments .u |                                                         |
| nnumbered} |                                                         |
+------------+---------------------------------------------------------+

+------------------------+---------------------------------------------+
| Circumstances          | Required Documentation                      |
+------------------------+---------------------------------------------+
| Loan includes funds    | ***Improvements of \$3,000 to \$6,000***:   |
| for energy efficiency  |                                             |
| improvements.          | Documentation of the lender's determination |
|                        | that the increase in monthly mortgage       |
|                        | payments does not exceed the likely         |
|                        | reduction in monthly utility costs.         |
|                        |                                             |
|                        | ***Improvements up to \$6,000***:           |
|                        |                                             |
|                        | Evidence of the cost of improvements such   |
|                        | as a copy of the bid(s) or contract         |
|                        | itemizing the improvements and their cost.  |
|                        |                                             |
|                        | ***Improvements over \$6,000***:            |
|                        |                                             |
|                        | Documentation of VA's valuation of the      |
|                        | energy efficiency improvements.             |
|                        |                                             |
|                        | ***Reference***: See section 3 of [chapter  |
|                        | 7](http://www.warms.vb                      |
|                        | a.va.gov/admin26/pamphlet/pam26_7/ch07.doc) |
|                        | for details, including special provisions   |
|                        | for Interest Rate Reduction Loans (IRRRLs). |
+------------------------+---------------------------------------------+

Continued on next page

6\. Submit "Other Necessary Documents", Continued

  -----------------------------------------------------------------------
  b\. Circumstances Requiring Additional Documents (continued)

  -----------------------------------------------------------------------

+-----------------------+----------------------------------------------+
| Circumstances         | Required Documentation                       |
+-----------------------+----------------------------------------------+
| Postponed completion  | [VA Form                                     |
| of exterior           | 26-1849](http://www.vba.v                    |
| improvements.         | a.gov/pubs/forms/26-1849.pdf)[,]{.underline} |
|                       | Escrow Agreement for Postponed Exterior      |
|                       | Onsite Improvements.                         |
|                       |                                              |
|                       | ***Reference***: See section 9 of [chapter   |
|                       | 9](http://www.warms.vb                       |
|                       | a.va.gov/admin26/pamphlet/pam26_7/ch09.doc). |
+-----------------------+----------------------------------------------+
| Loan involves use of  | Power of attorney requirements as described  |
| an attorney in fact.  | in section 7 of [chapter                     |
|                       | 9](http://www.warms.vb                       |
|                       | a.va.gov/admin26/pamphlet/pam26_7/ch09.doc), |
|                       | including written evidence of the veteran's  |
|                       | consent to the specific transaction, plus    |
|                       | the lender certification found under the     |
|                       | "Requirements" heading.                      |
+-----------------------+----------------------------------------------+
| Veteran intended to   | -   A completed [VA Form                     |
| sell property on      |     26-1880](http://www                      |
| which he/she has an   | .vba.va.gov/pubs/forms/vba-26-1880-ARE.pdf), |
| existing VA loan      |     Request for a Certificate of             |
| prior to closing on   |     Eligibility, and                         |
| the new VA loan, in   |                                              |
| order to have         | -   Evidence that the veteran has sold the   |
| entitlement restored. |     property and either                      |
|                       |                                              |
|                       | ```{=html}                                   |
|                       | <!-- -->                                     |
|                       | ```                                          |
|                       | -   evidence that the veteran has fully      |
|                       |     repaid the prior loan, or                |
|                       |                                              |
|                       |     ***Note***: A                            |
|                       |     [HUD-1](http://www.h                     |
|                       | udclips.org/sub_nonhud/html/pdfforms/1.pdf), |
|                       |     Settlement Statement, clearly showing    |
|                       |     sale of the property by the veteran and  |
|                       |     pay-off of the prior VA loan, satisfies  |
|                       |     this requirement.                        |
|                       |                                              |
|                       | -   documentation that the veteran can be    |
|                       |     released from liability and the assumer  |
|                       |     meets the requirements for substitution  |
|                       |     of entitlement.                          |
+-----------------------+----------------------------------------------+
| Veteran intended to   | Lender's certification that the sale of the  |
| sell property in      | veteran's property has been completed and    |
| order to have         | the proceeds disbursed.                      |
| sufficient income     |                                              |
| and/or assets to      | -   ***Note***: The lender's certification   |
| qualify for the loan. |     must be based on examination of a        |
|                       |     [HUD-1](http://www.h                     |
|                       | udclips.org/sub_nonhud/html/pdfforms/1.pdf), |
|                       |     Settlement Statement, or other           |
|                       |     appropriate documentation of the         |
|                       |     transaction.                             |
+-----------------------+----------------------------------------------+

Continued on next page

6\. Submit "Other Necessary Documents", Continued

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  b\. Circumstances Requiring Additional Documents (continued)

  -----------------------------------------------------------------------

+-----------------------+----------------------------------------------+
| Circumstances         | Required Documentation                       |
+-----------------------+----------------------------------------------+
| Loan is to the        | The following affidavit obtained from the    |
| unmarried surviving   | surviving spouse at the time of loan         |
| spouse of an          | closing:                                     |
| eligible, deceased    |                                              |
| veteran.              | "I, \_\_\_\_\_\_\_\_, being first duly       |
|                       | sworn, on oath, say, that, on the \_\_ day   |
|                       | of \_\_\_\_\_\_, 2\_\_\_ (insert date loan   |
|                       | was closed), I am (was) the unmarried        |
|                       | surviving spouse of \_\_\_\_\_\_\_\_\_ and   |
|                       | that I make this affidavit for the express   |
|                       | purpose of inducing \_\_\_\_\_\_\_ to make a |
|                       | loan to me and/or for inducing the           |
|                       | Department of Veterans Affairs to guarantee  |
|                       | or insure such loan, knowing that it is a    |
|                       | criminal offense to make a false statement   |
|                       | for this purpose; and that the above and     |
|                       | foregoing is true and correct."              |
|                       |                                              |
|                       | \_\_\_\_\_\_\_\_\_\_\_\_\_                   |
|                       | \_                                           |
|                       | \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ |
|                       |                                              |
|                       | Notary's jurat Signature of surviving spouse |
+-----------------------+----------------------------------------------+
| Loan is to the spouse | Documentation that, at the time of loan      |
| of a serviceperson    | closing, the lender asked the applicant and  |
| missing in action or  | the applicant provided verbal assurance      |
| prisoner of war       | that:                                        |
| (MIA/POW).            |                                              |
|                       | -   No official notice of any change in the  |
|                       |     service member's status had been         |
|                       |     received, and                            |
|                       |                                              |
|                       | -   Applicant was still the spouse of the    |
|                       |     service member.                          |
+-----------------------+----------------------------------------------+
| Supplemental loan for | See "Procedures" in section 5 of [chapter    |
| home improvements.    | 7](http://www.warms.vb                       |
|                       | a.va.gov/admin26/pamphlet/pam26_7/ch07.doc). |
+-----------------------+----------------------------------------------+
| Graduated Payment     | Veteran's statement acknowledging payment    |
| Mortgage (GPM).       | increases.                                   |
|                       |                                              |
|                       | ***Reference***: See section 7 of [chapter   |
|                       | 7](http://www.warms.vb                       |
|                       | a.va.gov/admin26/pamphlet/pam26_7/ch07.doc). |
+-----------------------+----------------------------------------------+
| Restrictions exist on | Veteran's written consent to the             |
| the purchase or       | restrictions (obtained at the time of loan   |
| resale of the         | application).                                |
| property the veteran  |                                              |
| is purchasing.        | ***Reference***: See section 2 of [chapter   |
|                       | 9](http://www.warms.vb                       |
|                       | a.va.gov/admin26/pamphlet/pam26_7/ch09.doc). |
+-----------------------+----------------------------------------------+