VA Guaranteed Home Loan Briefing Appraisal and Loan Production Highlights May 2018

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1 VA Guaranteed Home Loan Briefing Appraisal and Loan Production Highlights May 2018 This document contains U.S. Department of Veterans Affairs proprietary business information and may not be reproduced without permission.

2 Loan Guaranty (LGY): Mission, Vision, and Strategic Plan LGY Mission: To maximize Veterans and Servicemembers opportunity to obtain, retain, and adapt homes by providing a viable and fiscally responsible benefit program in recognition of their service to the nation. LGY Vision: To empower Veterans with information and access to innovative products and services by providing a Veteran-focused experience, strengthening our partnerships, driving continuous performance improvements, and never forgetting who we serve. In order to support VBA s strategic plan and achieve LGY s vision for Veterans, Servicemembers, and their families, LGY will: Serve as the leading voice related to housing for Veterans. Attract and retain a workforce with the skills, knowledge, and commitment necessary to serve Veterans. Create and sustain a culture of innovation that ensures the VA home loan is the product of choice. Deliver a quality customer experience through consistent, timely, and accurate benefits and services that meet their needs. 2

3 Serving Veterans since 1944 VA Guaranteed Home Loan program established in 1944 This row house in Washington DC was the first home purchased by a Veteran with a VA Guaranteed Loan Maximum guaranty amount in 1944 was $2000, maximum interest rate 4%, maximum loan term 20 years In FY17, VA guaranteed a record 740,386 loans, totaling over $188B a 5% increase from FY16 3

4 Regional Loan Centers St. Paul Cleveland Denver Roanoke Phoenix Honolulu Houston 5 Atlanta St. Petersburg

5 Service to Veterans provided by Regional Loan Centers Construction and Valuation Serving Veterans through oversight of VA appraisals and appraisal-related work Loan Production - Serving Veterans who are purchasing or refinancing a home and conducting oversight of mortgage lenders on a nationwide basis Specially Adapted Housing Serving Veterans who are obtaining a Specially Adapted Housing grant to construct, purchase or remodel their home Loan Administration - Serving Veterans who are seeking alternatives to foreclosure on a nationwide basis 5

6 Advantages of a VA Guaranteed Home Loan No downpayment option Competitive terms: interest rate, monthly payments, and closing costs. No mortgage insurance premium No prepayment penalty Mortgages are assumable Reusable VA assists Veteran homeowners retain their homes through supplemental servicing 6

7 VA Lender s Handbook VA Lender s Handbook and current Circulars are available online at VA.gov Please click on Home Loans and Lenders Page Circulars are issued so that guidance is available promptly when there is a program change VA Lender s Handbook and current circulars include all information for processing VA guaranteed loans 7

8 VA Appraisal Highlights Appraisals assigned on a rotational basis to State-certified appraisers on VA s fee appraiser panel Timeliness closely monitored Oversight of appraisal work through desk and field reviews conducted by VA staff 8

9 Appraisal Management Service (AMS) VA s contractor CoreLogic provides LoanSafe Appraisal Manager (LSAM) LSAM enhances the appraisal review process VA-authorized rules used to evaluate valuation risk Lenders reviewing appraisals under VA s Lender Appraisal Processing Program must use LSAM in administrative review of appraisal Risk-based appraisal review 9

10 Appraisal-related Items Condominiums Manufactured Homes Farm Residences Minimum Property Requirement Repairs Reconsiderations of Value 10

11 Appraisal-related Time Savers Provide accurate contact information for access to the property Include complete legal description with appraisal request Sales contract must be uploaded into WebLGY If sales contract is amended before appraisal is completed, notify the appraiser and upload the amended contract into WebLGY If needed, request a VA builder ID number from the RLC while the appraisal is being done since this will be required for the Notice of Value to be issued 11

12 Loan Production Updates Interest Rate Reduction Refinance Loans (IRRRL) (Circular change 1) Construction/Permanent home Loans (Circular ) Loans for Alterations and Repair (Circular ) 12

13 County Conforming Loan Amounts 2018 No changes for Florida Counties this year $453,100 Collier County (Naples and vicinity) $529,000 Monroe County (Florida Keys) $453,100 All other Florida Counties VA has no maximum loan amount, however lender will likely require a down payment on the portion of the loan exceeding the conforming loan amount 13

14 Energy Efficient Mortgages Advantage for Veterans seeking to make energy efficient improvements No cash outlay, cost is included in mortgage Available to Veterans who are purchasing or refinancing an existing home Does not apply to proposed or newly constructed homes Up to $3000 of improvements based on documented costs If the cost is $3,000 to $6,000, the increase in mortgage payment must not exceed the savings in utility costs If cost is over $6000, VA will review the increase in market value compared to cost 14

15 Prior Approval Loans Veteran purchasing a home with a non-veteran who is not a spouse Two Veterans who are not married purchasing a home Dual entitlement loans, 2 Veterans using both entitlements who are married to each other Veterans in receipt of Non Service Connected Pension Veterans with a Fiduciary in receipt of Service Connected Compensation 15

16 Full Reviews and LGC Process WebLGY will identify loans selected for full review Once the loan has been guaranteed, YES will appear at the upper right corner of the screen to indicate the loan has been selected for review Loan documents should be uploaded into WebLGY in the required stacking order 16

17 Lender Maintenance Lenders and Agents must be approved by VA Annual Audited Financial Statements are required for non supervised automatic lenders only Online training is required for underwriters Information & forms may be obtained at VA.gov please select Home Loans, then Lenders 17

18 Additional Information and Contact Information Complete information about the VA Guaranteed Home Loan Program is available online at VA.gov Please select Home Loans National Loan Centers Thank you for helping us serve our Veterans! 18