Attention Please!! Due to the unprecedented impact of the coronavirus on the industry, temporary guidance has been issued regarding a number of different topics. To ensure your borrower is accurately qualified in this challenging time, please refer to the Temporary Guidance due to COVID-19 document. This document is organized similar to our internal guidelines, and contains all temporary guidance in a single location. The direction on that document supersedes standard guidance contained in the Guideline documents and matrices. Please be sure to verify that all temporary direction is being applied. The Temporary Guidance due to COVID-19 document can also be accessed from the intranet, under Wholesale Library Documents >> Guidelines and Matrices >> All. VA Underwriting Guidelines 03.15.2021 2 Table of Contents Attention Please!! ____________________________________________________________________________ 1 MiMutual Underwriting ______________________________________________________________________ 13 Philosophy _____________________________________________________________________________________ 13 Program Description _____________________________________________________________________________ 14 Requirements and Restrictions ________________________________________________________________ 15 Loan Requirements ______________________________________________________________________________ 15 Loan Restrictions (Ineligible) _______________________________________________________________________ 15 Maximum LTV / CLTV_____________________________________________________________________________ 16 LTV Calculation for Applications Taken on/after February 15, 2019_______________________________________________ 16 Purchase of Existing or New Construction Properties __________________________________________________________ 16 New Construction _____________________________________________________________________________________ 17 Property (House and Lot) from Builder as Package: Purchase ________________________________________________ 17 Property Construction Financed by a Construction Loan: Refinance ___________________________________________ 17 Cash-Out Refinance ____________________________________________________________________________________ 17 IRRRLs ______________________________________________________________________________________________ 18 Maximum Loan Amount __________________________________________________________________________ 18 Downpayment ________________________________________________________________________________________ 18 Higher Priced Mortgage Loans _____________________________________________________________________ 19 Adjustable Rate Mortgages (ARMs) _________________________________________________________________ 19 Hybrid ARMs _________________________________________________________________________________________ 19 Collateral Requirements _____________________________________________________________________ 20 Eligible Collateral ________________________________________________________________________________ 20 Ineligible Collateral ______________________________________________________________________________ 20 Appraisal Reports ________________________________________________________________________________ 21 USPAP and VA Requirements ____________________________________________________________________________ 21 Appraisers Trained by VA _______________________________________________________________________________ 21 SAR Responsibilities____________________________________________________________________________________ 21 Market Value ___________________________________________________________________________________ 21 Market Value Definition ________________________________________________________________________________ 21 Protecting the Interests of Veterans, Lenders, Servicers, and VA _________________________________________________ 21 Oversight ____________________________________________________________________________________________ 21 Appraisal Report Contents ________________________________________________________________________ 22 Gross Living Area ________________________________________________________________________________ 23 Room Additions and Car Storage Conversions ________________________________________________________ 23 Accessory Dwelling Unit __________________________________________________________________________ 24 Nuisances ______________________________________________________________________________________ 24 Remaining Economic Life __________________________________________________________________________ 24 Effective Age ____________________________________________________________________________________ 25 Highest and Best Use _____________________________________________________________________________ 25 Appraisals ______________________________________________________________________________________ 26 Ordering an Appraisal __________________________________________________________________________________ 26 Duplicate Appraisal Requests __________________________________________________________________________ 26 Canceling Appraisal Requests __________________________________________________________________________ 26 Communication with the Appraiser _____________________________________________________________________ 26 VA Case Number Assignments ___________________________________________________________________________ 27 03.15.2021 3 VA Appraisal Assignment________________________________________________________________________________ 27 Appraisal Requirements ________________________________________________________________________________ 28 Uniform Appraisal Dataset (UAD) _________________________________________________________________________ 28 Compliance Inspection Report (VA Form 26-1839) ____________________________________________________________ 29 Tidewater Procedure ___________________________________________________________________________________ 29 Appraisal Rebuttal Process ______________________________________________________________________________ 30 Revisions Due to Sales Contract Amendments _______________________________________________________________ 30 Appraisal Portability/VA Case Transfers ____________________________________________________________________ 30 Appraisal Validity Period ________________________________________________________________________________ 30 Appraisal Delivery Requirements _________________________________________________________________________ 31 Sales Comparison Approach _____________________________________________________________________________ 31 Comparable Sale Selection ____________________________________________________________________________ 31 Comments Explaining Adjustments _____________________________________________________________________ 31 Limited Sales Data __________________________________________________________________________________ 31 Distance of Comparable Sales _________________________________________________________________________ 31 Sales of REO Properties ______________________________________________________________________________ 31 Sales from Competing Developments ___________________________________________________________________ 32 Market-Derived Adjustments __________________________________________________________________________ 32 Sales Concessions ___________________________________________________________________________________ 32 Recent Sales _______________________________________________________________________________________ 32 Time Adjustments ___________________________________________________________________________________ 32 Condition Adjustments _______________________________________________________________________________ 32 Cost Approach ________________________________________________________________________________________ 33 Income Approach _____________________________________________________________________________________ 33 Final Reconciliation ____________________________________________________________________________________ 33 Appraisal Conditions ___________________________________________________________________________________ 33 As-Is _____________________________________________________________________________________________ 33 Subject to Repairs ___________________________________________________________________________________ 33 Subject to Completion _______________________________________________________________________________ 33 Notices of Value (NOVs) __________________________________________________________________________ 34 SAR’s Certification _____________________________________________________________________________________ 34 Appraisal Review ______________________________________________________________________________________ 35 Appraisal Management System___________________________________________________________________________ 36 Cursory Appraisal Review _____________________________________________________________________________ 36 Comprehensive Appraisal Review ______________________________________________________________________ 36 NOV Timeliness _______________________________________________________________________________________ 37 Validity Period ________________________________________________________________________________________ 37 NOV Conditions _______________________________________________________________________________________ 37 Modular Home Eligibility