VA Underwriting Guidelines VA Underwriting Guidelines | Table of Contents Table of Contents MiMutual Underwriting ___________________________________________________________________ 12 Philosophy ____________________________________________________________________________________ 12 Program Description ____________________________________________________________________________ 13 Requirements and Restrictions _____________________________________________________________ 14 Loan Requirements _____________________________________________________________________________ 14 Loan Restrictions (Ineligible) _____________________________________________________________________ 14 Maximum LTV / CLTV ___________________________________________________________________________ 14 LTV Calculation for Applications Taken on/after February 15, 2019 _______________________________________________ 14 Purchase of Existing or New Construction Properties __________________________________________________________ 15 New Construction ______________________________________________________________________________________ 15 Property (House and Lot) from Builder as Package: Purchase _________________________________________________ 15 Property Construction Financed by a Construction Loan: Refinance ____________________________________________ 15 Cash-Out Refinance _____________________________________________________________________________________ 16 IRRRLs ________________________________________________________________________________________________ 16 Maximum Loan Amount _________________________________________________________________________ 17 Downpayment _________________________________________________________________________________________ 17 Higher Priced Mortgage Loans ____________________________________________________________________ 18 Adjustable Rate Mortgages (ARMs) ________________________________________________________________ 18 Hybrid ARMs ___________________________________________________________________________________________ 18 Collateral Requirements __________________________________________________________________ 19 Eligible Collateral ______________________________________________________________________________ 19 Ineligible Collateral _____________________________________________________________________________ 19 Appraisal Reports ______________________________________________________________________________ 20 USPAP and VA Requirements _____________________________________________________________________________ 20 Appraisers Trained by VA _________________________________________________________________________________ 20 SAR Responsibilities _____________________________________________________________________________________ 20 Market Value __________________________________________________________________________________ 20 Market Value Definition__________________________________________________________________________________ 20 Protecting the Interests of Veterans, Lenders, Servicers, and VA _________________________________________________ 20 Oversight _____________________________________________________________________________________________ 20 Appraisal Report Contents _______________________________________________________________________ 21 Gross Living Area _______________________________________________________________________________ 22 Room Additions and Car Storage Conversions _______________________________________________________ 22 Accessory Dwelling Unit _________________________________________________________________________ 23 Nuisances ____________________________________________________________________________________ 23 Remaining Economic Life ________________________________________________________________________ 23 Effective Age __________________________________________________________________________________ 24 Highest and Best Use ___________________________________________________________________________ 24 Appraisals ____________________________________________________________________________________ 25 Ordering an Appraisal ___________________________________________________________________________________ 25 Duplicate Appraisal Requests ___________________________________________________________________________ 25 Canceling Appraisal Requests ___________________________________________________________________________ 25 Communication with the Appraiser ______________________________________________________________________ 25 VA Case Number Assignments_____________________________________________________________________________ 26 VA Appraisal Assignment _________________________________________________________________________________ 26 Appraisal Requirements __________________________________________________________________________________ 27 Uniform Appraisal Dataset (UAD) __________________________________________________________________________ 27 Compliance Inspection Report (VA Form 26-1839) ____________________________________________________________ 28 11.25.2019 2 VA Underwriting Guidelines | Table of Contents Tidewater Procedure ____________________________________________________________________________________ 28 Appraisal Rebuttal Process _______________________________________________________________________________ 29 Revisions Due to Sales Contract Amendments ________________________________________________________________ 29 Appraisal Portability/VA Case Transfers _____________________________________________________________________ 29 Appraisal Validity Period _________________________________________________________________________________ 29 Appraisal Delivery Requirements __________________________________________________________________________ 30 Sales Comparison Approach ______________________________________________________________________________ 30 Comparable Sale Selection _____________________________________________________________________________ 30 Comments Explaining Adjustments ______________________________________________________________________ 30 Limited Sales Data ____________________________________________________________________________________ 30 Distance of Comparable Sales __________________________________________________________________________ 30 Sales of REO Properties ________________________________________________________________________________ 30 Sales from Competing Developments ____________________________________________________________________ 31 Market-Derived Adjustments ___________________________________________________________________________ 31 Sales Concessions ____________________________________________________________________________________ 31 Recent Sales_________________________________________________________________________________________ 31 Time Adjustments ____________________________________________________________________________________ 31 Condition Adjustments ________________________________________________________________________________ 31 Cost Approach _________________________________________________________________________________________ 32 Income Approach _______________________________________________________________________________________ 32 Final Reconciliation _____________________________________________________________________________________ 32 Appraisal Conditions ____________________________________________________________________________________ 32 As-Is _______________________________________________________________________________________________ 32 Subject to Repairs ____________________________________________________________________________________ 32 Subject to Completion ________________________________________________________________________________ 32 Notices of Value (NOVs) _________________________________________________________________________ 33 SAR’s Certification ______________________________________________________________________________________ 33 Appraisal Review _______________________________________________________________________________________ 34 Appraisal Management System ____________________________________________________________________________ 35 Cursory Appraisal Review ______________________________________________________________________________ 35 Comprehensive Appraisal Review _______________________________________________________________________ 35 NOV Timeliness ________________________________________________________________________________________ 36 Validity Period _________________________________________________________________________________________ 36 NOV Conditions ________________________________________________________________________________________ 36 Modular Home Eligibility ________________________________________________________________________ 37 Minimum Property Requirements _________________________________________________________________ 37 FEMA Declared Disaster Area Policy _______________________________________________________________ 38 Appraisal Completed – Loan Not Closed Prior to Disaster _______________________________________________________ 39 Decrease in Value After Disaster ___________________________________________________________________________ 39 Required Repairs _______________________________________________________________________________ 39 Acreage ______________________________________________________________________________________ 39 Zoning 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