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Unformatted text preview: can be acceptable income for qualifying if received monthly and consistently. Co–Buyers – If both husband and wife are veterans, the amount of the USDVA guarantee may be doubled. Also, several veterans may use their entitlements to acquire property together. GPM – Graduated Payment Mortgage. – Since 1981, the DVA (now the USDVA) has been authorized to guarantee GPM loans, which require small down-payments but allow lower monthly payments for the first year, increasing annually during a graduation period. There is negative amortization during this graduation period. The plan is based on Plan III, Section 245, FHA–insured loans. This plan provides for increasing loan payments at a rate of 7 ½% per year for the first five years. Refinance – Interest Rate Reduction. An existing GI loan can be refinanced with a new USDVA–guaranteed loan at a lower interest rate without the use of additional loan guarantee entitlement. The refinancing
5-40 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 5: GOVERNMENT PARTICIPATION & BACKED LOANS
loan must be secured by the same home. The loan may not exceed the old loan balance plus allowable closing costs and a reasonable discount. The veteran may not receive any cash proceeds. Requirements – USDVA–to–USDVA refinancing is a much simpler process than obtaining a new GI loan: • • • • • No termite inspection is required. No credit report is required; however, Rear payments must have been made on time. The loan fee can be included in the new loan. The appraisal must establish an adequate value to secure the new loan balance. Appraisal – The DVA–completed appraisal is turned in to the Regional Office to be checked and reviewed. The next step is to issue a Certificate of Reasonable Value (CRV). Reasonable value means current market value, which the certificate states. In practice, the DVA never issues a certificate showing a value greater...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10