VA issued Circular 26-24-17, introducing secondary borrowing requirements on assumption transactions. Per the Circular, a servicer must ensure requirements related to lien position, documentation, allowable purposes of proceeds, cash back, recurring monthly payment, assumability counseling, and grace period are met when an assumer is obtaining secondary borrowing simultaneously with the assumption of a VA-guaranteed home loan. Previously, VA has not specifically addressed requirements related to secondary borrowing. The new requirements become effective August 14, 2024.
Click to view the VA Circular 26-24-17: https://www.tenaco.com/wp-content/uploads/2024/08/VA-Circular-26-24-17-08-14-24.pdf
