Section 140. Loan assumptions

A. VHDA may from time to time, in its discretion, permit assumptions of all or some of its single family mortgage loans, subject to satisfaction of the applicable requirements in this section; provided, however, that assumptions shall be permitted when required by the mortgage insurer or guarantor rules or applicable law if the applicable requirements in this section are met. For all loans closed prior to January 1, 1991, except FHA loans which were closed during calendar year 1990, the maximum gross income for the person or persons assuming a loan shall be 100% of the applicable median family income. For such FHA loans closed during 1990, if assumed by a household of three or more persons, the maximum gross income shall be 115% of the applicable median family income (140% for a residence in a targeted area) and if assumed by a household of fewer than three persons, the maximum gross income shall be 100% of the applicable median family income (120% for a residence in a targeted area). For all loans closed after January 1, 1991, the maximum gross income for the person or persons assuming loans shall be the highest percentage, as then in effect under 13VAC10-40-100 A, of applicable median family income for the number or persons to occupy the dwelling upon assumption of the mortgage loan, unless otherwise provided in the deed of trust. The requirements for each of the two different categories of mortgage loans listed below (and the subcategories within each) are as follows:

1. The following rules apply to assumptions of conventional loans, if permitted by the authority.

a. For assumptions of conventional loans financed by the proceeds of bonds issued on or after December 17, 1981, the requirements of the following sections hereof must be met:

(1) Maximum gross income requirement in 13VAC10-40-140 A

(2) 13VAC10-40-50 C (Principal residence requirement)

(3) 13VAC10-40-130 (Authority underwriting requirements)

(4) 13VAC10-40-50 B (Three-year requirement)

(5) 13VAC10-40-60 B (Acquisition cost requirements)

(6) 13VAC10-40-120 (Mortgage insurance requirements).

b. For assumptions of conventional loans financed by the proceeds of bonds issued prior to December 17, 1981, the requirements of the following sections hereof must be met:

(1) Maximum gross income requirement in 13VAC10-40-140 A

(2) 13VAC10-40-50 C (Principal residence requirements)

(3) 13VAC10-40-130 (Authority underwriting requirements)

(4) 13VAC10-40-120 (Mortgage insurance requirements).

2. The following rules apply to assumptions of FHA, VA or Rural Development loans, if permitted by the authority.

a. For assumptions of FHA, VA or Rural Development loans financed by the proceeds of bonds issued on or after December 17, 1981, the following conditions, if applicable, must be met:

(1) Maximum gross income requirement in this 13VAC10-40-140 A

(2) 13VAC10-40-50 C (Principal residence requirement)

(3) 13VAC10-40-50 B (Three-year requirement)

(4) 13VAC10-40-60 B (Acquisition cost requirements).

In addition, all applicable FHA, VA or Rural Development underwriting requirements, if any, must be met.

b. For assumptions of FHA, VA or Rural Development loans financed by the proceeds of bonds issued prior to December 17, 1981, only the applicable FHA, VA or Rural Development underwriting requirements, if any, must be met.

B. If the authority will permit an assumption, the authority will determine whether or not the applicable requirements referenced above for assumption of the loan have been met and will advise the originating agent or servicing agent of such determination in writing. The authority will further advise the originating agent or servicing agent of all other requirements necessary to complete the assumption process. Such requirements may include but are not limited to the submission of satisfactory evidence of hazard insurance coverage on the property, approval of the deed of assumption, satisfactory evidence of mortgage insurance or mortgage guaranty including, if applicable, pool insurance, submission of an escrow transfer letter and execution of a Recapture Requirement Notice (VHDA Doc. R-1).

Historical Notes

Derived from VR400-02-0003 § 2.9, eff. July 16, 1985; amended, Volume 02, Issue 03, eff. October 15, 1985; Volume 02, Issue 10, eff. January 21, 1986; Volume 02, Issue 18, eff. May 20, 1986; Volume 03, Issue 03, eff. December 10, 1986; Volume 03, Issue 23, eff. August 10, 1987; Volume 04, Issue 14, eff. March 16, 1988; Volume 05, Issue 03, eff. October 19, 1988; Volume 05, Issue 12, eff. March 1, 1989; Volume 05, Issue 21, eff. July 1, 1989; Volume 06, Issue 10, eff. January 16, 1990; Volume 07, Issue 10, eff. January 16, 1991; Volume 07, Issue 23, eff. July 18, 1991; Volume 08, Issue 06, eff. December 1, 1991; Volume 08, Issue 17, eff. April 23, 1992; Volume 09, Issue 20, eff. July 1, 1993; Volume 10, Issue 15, eff. March 16, 1994; Volume 10, Issue 21, eff. June 21, 1994; Volume 11, Issue 19, eff. June 1, 1995; Volume 12, Issue 11, eff. February 5, 1996; Volume 14, Issue 11, eff. January 28, 1998; Volume 19, Issue 25, eff. August 1, 2003; Volume 25, Issue 21, eff. June 5, 2009.

Statutory Authority

§ 36-55.30:3 of the Code of Virginia.