VA Loan Training Overviews & Updates June 3, 2015

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VA Loan Training

Overviews & Updates

June 3, 2015

Choose one of the following audio options: TO USE YOUR COMPUTER'S AUDIO:

When the webinar begins, you will be connected to audio using your computer's microphone and speakers (VoIP). A

headset is recommended.

--OR--TO USE YOUR TELEPHONE:

If you prefer to use your phone, you must select "Use Telephone" after joining the webinar and call in using the

numbers below. Toll:XXX-XXX-XXXX Access Code:XXX-XXX-XXX

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Recent Update: 2015 Loan Limits

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VA Loan Limits

• VA does not have a maximum loan amount however the VA

county loan limits are used to determine the maximum

guaranty by county

• To view VA’s county loan limits go to VA County Loan Limits

• Counties not identified on the VA loan limit list are limited to

$417,000

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What is A VA Guaranteed Loan

• VA Guaranteed loans are made to eligible veterans for the

purchase or refinance of a home.

• Active duty military personnel

• Any veteran who served active duty in the Army, Navy, Air Force,

Marine Corp or Coast Guard and was discharged under conditions

other than dishonorable

• Reservists or National Guard with 6 years of service

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Understanding VA Entitlement

• The VA entitlement is the amount the VA will guaranty the lender against loss. The entitlement is based on 25% of the total loan amount (including the funding fee, if financed).

• The total loan amount, including the funding fee can never exceed the VA county loan limit without a down payment from the veteran.

• The Certificate of Entitlement (COE), issued by the VA, provides the amount of the veteran’s entitlement.

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Understanding VA Entitlement (cont)

• The Certificate of Entitlement (COE), issued by the VA, provides the

amount of the veteran’s entitlement.

• The entitlement can be affected if the veteran has used it before and

whether or not the entitlement has been restored

• There is no limit on the number of times the entitlement may be used • The entitlement can be restored when a prior VA loan obtained by

the veteran is paid in full, or

• An eligible veteran assumes the outstanding loan on a property and

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VA Loan Benefits

**• No Down Payment Required *up to county limit**

• No Monthly Mortgage Insurance

• Flexible Credit Standards

• Ability To Finance Funding Fee

• Seller Concession: up to 4%

• Fully Assumable

• No Pre-pay Penalty

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VA Program Highlights

• Purchase 100% LTV/CLTV *up to county limit

• Cash-out refinance up to 100%

• 1-4 unit primary residence

• Single family residence, PUDs and condominiums in VA

approved projects

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VA Funding Fee

• VA loans require a VA funding fee which is paid directly to VA

• Funding fee can be financed into the loan amount

• Veteran may be exempt from the funding fee; the COE will

identify if veteran is exempt.

• The base loan amount plus the financed funding fee cannot

exceed the conforming loan limit or the VA county limit or a

down payment will be required to ensure a 25% guaranty

• The funding fee is calculated using the base loan amount

• The funding fee can be paid by:

• Property seller

• Realtor

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VA Funding Fee (Cont)

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Fees and Charges

• VA has specific requirements regarding fees to the borrower.

VA requirements are:

• 1% origination fee based on the total loan amount. Unallowable

fees cannot be charged, OR

• 1 % of the unallowable fees based on the total loan amount. An

origination fee cannot be charged, OR

• 1% blend of origination fee and unallowable fees based on the

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Fees and Charges (Cont)

The following fees are unallowable and cannot be charged to

the veteran if a 1% origination fee is charged:

• Lender’s Inspection • Lender’s Appraisal • Closing/Settlement Fee • Doc Prep Fees

• Conveyance Fee • Underwriting Fee • Pest Inspection Fee • Well/Septic Fee • Escrow Fees • Notary Fee

• Commitment Fee

• Trustee Fee

• Interest Rate Lock Fee • Postage/Mail Charges • Amortization Schedule • Tax Service Fee

• Attorney’s Services other than title work • Loan Application/Processing Fee

• Fees for preparing Truth-in-Lending • Prepayment Penalties (refinance)

• Any other fee not listed as allowable by VA • Fees to Loan Brokers, Finders or other 3rd

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Fees and Charges (Cont)

The following are allowable closing costs:

• Loan Origination Fee

• Reasonable Discount Points • Appraisal Fee/Compliance

Inspection

• Credit Report Fee (actual) • Title Examination/Title

Insurance Fees

• Recording Fes & Taxes • Prorated Taxes

• Hazard Insurance • Flood Insurance

• Flood Determination

• Federal Express/Express Mail (Refi only) • Closing Protection Letter

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What is A VA WEBLGY?

• WEBLGY = Web-based Loan Guaranty

• Like FHA Connection but for VA Loans

• WEBLGY features:

• User Registration

• Order Case Number

• Order Appraisals

• Request, Search and/or Print COE (Certificate of Eligibility)

• View Loan Status and History

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Certificate of Eligibility (COE)

• How can a COE be obtained?

• Under WEBLGY – determination within seconds

• What if COE cannot be determined by WEBLGY?

• Select “Electronic Application” to complete a request for a COE

• Mail VA Form 26-1880, Request for COE and evidence of service

to VA:

VA Loan Eligibility Center PO Box 100023

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Documentation needed for COE

• Veterans Still On Active Duty

• Statement of Service Signed & Dated by Commanding Officer:

• Service Member’s name • Date of Birth

• SSN and/or Service Number • Enlistment Date

• Contain the phrase “No Time Lost” (if applicable), or list any Time Lost • If the service member is in the Reserves or National Guard, indicate if

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Documentation needed for COE

• Discharged Veterans (Regular Military)

• Provide Certificate of Release or Discharge From Active Duty

• If DD 214 not available, contact:

Ntional Personnel Records Center 1 Archives Drive

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Documentation needed for COE

• Current Reserve/Guard Members:

• Statement of Service Signed & Dated by Commanding Officer:

• Veteran’s full name • SSN

• Entry Date of Applicant’s Reserve/Guard Duty

• Contain the phrase “No Time Lost” (if applicable), or list any Time Lost • Note: The statement must clearly indicate that the applicant is and

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Documentation needed for COE

• Discharged Reserve/Guard Members:

• Provide Points Statement to reflect 6 years of participation

• Provide evidence of honorable discharge

Branch

Type of Form

Telephone

Air Force Reserve Air National Guard

Record of Service AF526, Points Sumary Sheet NGB Form 22, Report of Separation & Record Svc

(800) 525-0102

Army Reserve Army Nat’l Guard

DARP Form 249-2E or ARPC Form 606

Chronological Statement of Retirement Points NGB Form 22, Report of Separation & Record Svc

(800) 276-9472

Navy Reserve NRPC 1070-124, Annual Retirement Point Record _{(866) 827-5672}

USMC Reserve NAVMC 798, Reserve Retirement Credit Report _{(800) 168-3710}

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VA Cash Out Refinance

• The Loan Limit:

• 100% of Notice of Value (NOV) • Plus (+) The Funding Fee

• Plus (+) The Cost Of Any Energy Efficient Improvements up to $6K

• Must pay off existing lien(s)

• Itemization of the debts paid off by loan proceeds is required

• Veteran can receive cash proceeds from the loan for an acceptable purpose approved by the lender.

• IMPORTANT NOTE:

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VA IRRRL

• Interest rate of the new loan must be LOWER than the previous loan, unless refinance an ARM to a fixed rate.

• P&I must be less than previous loan P&I, UNLESS

• ARM is being refinanced by a fixed rate VA IRRRL

• The term of the IRRRL is shorter than the term of previous VA loan • OR, Energy Efficient Improvements are included in the IRRRL.

• Include all costs in the new loan, including the VA funding fee and any allowable fees and charges

• No credit info or underwriting is required, UNLESS the loan is 30 days or more past due or monthly payment (PITI) will increase 20% or more.

• Note: A borrower with a recent Chapter 13 BK may need approval of the trustee for the new loan.

• The veteran or spouse must certify that he or she previously occupy the property as his or her home.

• Max term = existing term + 10 years, not to exceed 30 years & 32 days.

AVM is Required for IRRRL

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VA IRRRL (Qualified Mortgage)

• The loan being refinanced was originated at least 6 months before

the new loan’s closing date

• The veteran has not been more than 30 days past due during the 6

months preceding the new loan’s closing date

• The recoupment period for all allowable fees and charges financed

as part of the loan or paid at closing does not exceed 36 months

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Who Can Obtain an IRRRL?

_{AVM is Required}

for IRRRL

*JMAC’s Overlay

Parties On Existing Loan Parties To Be On New Loan Is IRRRL OK?

Unmarried Veteran Veteran And New Spouse Yes Veteran And Spouse Divorced Veteran Alone Yes Veteran And Spouse Veteran And Different Spouse Yes Veteran Alone Different Vet w/Substituted Entitlement Yes Veteran And Spouse Spouse Alone (Veteran Died) Yes Veteran and Non-Veteran Veteran Alone Yes Veteran And Spouse Divorced Spouse Alone No

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Credit

• Judgments: Must be paid off or on an acceptable repayment plan

• Federal Debts: Must be paid in full or on an acceptable repayment plan • Collection Accounts: A borrower with an unacceptable credit history does

not become acceptable simply by paying collection accounts. Conversely, A borrower with an overall favorable history might be considered

acceptable with an isolated unpaid collection. • Chapter 7 BK: 24 months from discharge

• Chapter 13 BK: 12 satisfactory payment history & Approval from court • Foreclosure: 2 years from settlement

• DIL and Short Sale: 2 years from settlement

• Divorce Situation: Disregard Derogs belong to ex-spouse per final decree.

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Credit (Non-purchasing Spouse)

• Non-purchasing Spouse’s credit report is required

• Non-purchasing Spouse’s debts will be counted

• Non-purchasing Spouse’s derogatory credit may have

adverse effect on the loan decision.

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VA forms & Disclosures

• VA Addendum (HUD 92900-A/VA 26-1802a) – page 1-2 only. • VA Rights of VA Loan Borrowers (VA 26-8978)

• VA Certificate of Eligibility

• VA Request for Certificate of Eligibility (VA 26-1880) • VA Verification of Benefits (VA 26-8937)

• VA Request for Certificate of Veteran Status (VA 26-8261A)

• VA Counseling Checklist (VA 26-0592) For Active Military Only • VA Nearest Living Relative Form

• VA Childcare Statement

• VA Debt Questionnaire (VA 26-0551)

• VA Federal Collection Policy Notice (VA 26-0553) • Veteran’s DD 214

• VA IRRRL Loan Comparison Worksheet/Rate Reduction Certification, if App • Active Duty/Reservist/National Guard Certification