VA Underwriting Guidelines VA Underwriting Guidelines | Table of Contents Table of Contents MiMutual Underwriting ___________________________________________________________________ 11 Philosophy ____________________________________________________________________________________ 11 Program Description ____________________________________________________________________________ 12 Requirements and Restrictions _____________________________________________________________ 13 Loan Requirements _____________________________________________________________________________ 13 Loan Restrictions (Ineligible) _____________________________________________________________________ 13 Maximum LTV / CLTV ___________________________________________________________________________ 13 LTV Calculation for Applications Taken on/after February 15, 2019 _______________________________________________ 13 Purchase of Existing Properties ____________________________________________________________________________ 14 New Construction by Property Type ________________________________________________________________________ 14 Home Built FOR Veteran on Lot Acquired by Veteran ________________________________________________________ 14 Home Built BY Veteran on Lot Acquired by Veteran _________________________________________________________ 14 Property (House and Lot) Purchased From Builder as Package ________________________________________________ 14 Property Construction was Financed by a Construction Loan __________________________________________________ 15 Cash-Out Refinance _____________________________________________________________________________________ 15 Paying off an Installment Land Contract _____________________________________________________________________ 16 IRRRLs ________________________________________________________________________________________________ 16 Higher Priced Mortgage Loans ____________________________________________________________________ 16 Adjustable Rate Mortgages (ARMs) ________________________________________________________________ 16 Hybrid ARMs ___________________________________________________________________________________________ 16 Collateral Requirements __________________________________________________________________ 17 Eligible Collateral ______________________________________________________________________________ 17 Ineligible Collateral _____________________________________________________________________________ 17 Appraisal Reports ______________________________________________________________________________ 18 USPAP and VA Requirements _____________________________________________________________________________ 18 Appraisers Trained by VA _________________________________________________________________________________ 18 SAR Responsibilities _____________________________________________________________________________________ 18 Market Value __________________________________________________________________________________ 18 Market Value Definition__________________________________________________________________________________ 18 Protecting the Interests of Veterans, Lenders, Servicers, and VA _________________________________________________ 18 Oversight _____________________________________________________________________________________________ 18 Appraisal Report Contents _______________________________________________________________________ 19 Gross Living Area _______________________________________________________________________________ 20 Room Additions and Car Storage Conversions _______________________________________________________ 20 Accessory Dwelling Unit _________________________________________________________________________ 21 Nuisances ____________________________________________________________________________________ 21 Remaining Economic Life ________________________________________________________________________ 21 Effective Age __________________________________________________________________________________ 22 Highest and Best Use ___________________________________________________________________________ 22 Farm Residences _______________________________________________________________________________ 22 Appraisals ____________________________________________________________________________________ 23 Ordering an Appraisal ___________________________________________________________________________________ 23 Duplicate Appraisal Requests ___________________________________________________________________________ 23 Canceling Appraisal Requests ___________________________________________________________________________ 23 Communication with the Appraiser ______________________________________________________________________ 23 VA Case Number Assignments_____________________________________________________________________________ 24 VA Appraisal Assignment _________________________________________________________________________________ 24 Appraisal Requirements __________________________________________________________________________________ 25 06.10.2019 2 VA Underwriting Guidelines | Table of Contents Uniform Appraisal Dataset (UAD) __________________________________________________________________________ 25 Compliance Inspection Report (VA Form 26-1839) ____________________________________________________________ 26 Tidewater Procedure ____________________________________________________________________________________ 26 Appraisal Rebuttal Process _______________________________________________________________________________ 27 Revisions Due to Sales Contract Amendments ________________________________________________________________ 27 Appraisal Portability/VA Case Transfers _____________________________________________________________________ 27 Appraisal Validity Period _________________________________________________________________________________ 27 Appraisal Delivery Requirements __________________________________________________________________________ 28 Sales Comparison Approach ______________________________________________________________________________ 28 Comparable Sale Selection _____________________________________________________________________________ 28 Comments Explaining Adjustments ______________________________________________________________________ 28 Limited Sales Data ____________________________________________________________________________________ 28 Distance of Comparable Sales __________________________________________________________________________ 28 Sales of REO Properties ________________________________________________________________________________ 28 Sales from Competing Developments ____________________________________________________________________ 29 Market-Derived Adjustments ___________________________________________________________________________ 29 Sales Concessions ____________________________________________________________________________________ 29 Recent Sales_________________________________________________________________________________________ 29 Time Adjustments ____________________________________________________________________________________ 29 Condition Adjustments ________________________________________________________________________________ 29 Cost Approach _________________________________________________________________________________________ 30 Income Approach _______________________________________________________________________________________ 30 Final Reconciliation _____________________________________________________________________________________ 30 Appraisal Conditions ____________________________________________________________________________________ 30 As-Is _______________________________________________________________________________________________ 30 Subject to Repairs ____________________________________________________________________________________ 30 Subject to Completion ________________________________________________________________________________ 30 Modular Home Eligibility ________________________________________________________________________ 31 Minimum Property Requirements _________________________________________________________________ 31 FEMA Declared Disaster Area Policy _______________________________________________________________ 32 Appraisal Completed – Loan Not Closed Prior to Disaster _______________________________________________________ 32 Decrease in Value After Disaster ___________________________________________________________________________ 32 Repair Escrows ________________________________________________________________________________ 32 Required Repairs _______________________________________________________________________________ 33 Acreage ______________________________________________________________________________________ 33 Commercial/Industrial Zoning ____________________________________________________________________ 33 Properties Listed for Sale within the Last 6 Months (Refinances) ________________________________________ 33 Attic _________________________________________________________________________________________ 33 Crawl Space ___________________________________________________________________________________ 33 Roof _________________________________________________________________________________________ 34 Inspection and Life Expectancy ____________________________________________________________________________ 34 Snow Covered Roof _____________________________________________________________________________________