Section 190. Property guidelines

A. For each application the authority must make the determination that the property will constitute adequate security for the loan. That determination shall in turn be based solely upon a real estate appraisal's determination of the value and condition of the property. Such appraisal must be performed by an appraiser licensed in the Commonwealth of Virginia.

When the residence is located in an area experiencing a decline in property values as determined by the appraiser or the executive director based upon objective quantitative data, the executive director may establish additional requirements, including, without limitation, lower loan to value ratios, for such loan as determined necessary by the executive director to protect the financial interests of the authority.

All properties must be structurally sound and in adequate condition to preserve the continued marketability of the property and to protect the health and safety of the occupants. Eligible properties must possess features which are acceptable to typical purchasers in the subject market area and provide adequate amenities. Eligible properties must meet Fannie Mae and Freddie Mac property guidelines unless otherwise approved by the authority.

All properties must be structurally sound and in adequate condition to preserve the continued marketability of the property and to protect the health and safety of the occupants. Eligible properties must possess features that are acceptable to typical purchasers in the subject market area and provide adequate amenities. Eligible properties must meet FNMA and FHLMC property guidelines unless otherwise approved by the authority.

In addition, manufactured housing, both new construction and certain existing, may be financed only if the loan is insured 100% by FHA (see subsection C of this section). The authority may also impose other property requirements and offer other financing terms for manufactured housing, provided that the executive director determines that such property requirements and financing terms adequately protect the financial integrity of the program.

B. The following rules apply to conventional loans.

1. The following requirements apply to both new construction and existing housing to be financed by a conventional loan: (i) all property must be located on a state maintained road; provided, however, that the authority may, on a case-by-case basis, approve financing of property located on a private road acceptable to the authority if the right to use such private road is granted to the owner of the residence pursuant to a recorded right-of-way agreement providing for the use of such private road and a recorded maintenance agreement provides for the maintenance of such private road on terms and conditions acceptable to the authority (any other easements or rights-of-way to state maintained roads are not acceptable as access to properties); (ii) any easements, covenants or restrictions which will adversely affect the marketability of the property, such as high-tension power lines, drainage or other utility easements will be considered on a case-by-case basis to determine whether such easements, covenants or restrictions will be acceptable to the authority; (iii) property with available water and sewer hookups must utilize them; and (iv) property without available water and sewer hookups may have their own well and septic system; provided that joint ownership of a well and septic system will be considered on a case-by-case basis to determine whether such ownership is acceptable to the authority, provided further that cisterns will be considered on a case-by-case basis to determine whether the cistern will be adequate to serve the property.

2. New construction financed by a conventional loan must also meet Virginia Statewide Building Code and local code.

C. The following rules apply to FHA, VA or Rural Development loans.

1. Both new construction and existing housing financed by an FHA, VA or Rural Development loan must meet all applicable requirements imposed by FHA, VA or Rural Development.

2. Manufactured housing being financed by FHA loans must also meet federal manufactured home construction and safety standards, satisfy all FHA insurance requirements, be on a permanent foundation to be enclosed by a perimeter masonry curtain wall conforming to standards of the Virginia Statewide Building Code, be permanently affixed to the site owned by the borrower or borrowers and be insured 100% by FHA under its section 203B program. In addition, the property must be classified and taxed as real estate and no personal property may be financed.

Historical Notes

Derived from VR400-02-0003 § 2.14, 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 17, Issue 22, eff. June 20, 2001; Volume 19, Issue 25, eff. August 1, 2003; Volume 20, Issue 03, eff. September 25, 2003; Volume 24, Issue 07, eff. November 13, 2007.

Statutory Authority

§ 36-55.30:3 of the Code of Virginia.