VA revised chapter 3 of the Lender’s Handbook (M26-7). Topics 1 through 6 of chapter 3 were revised as follows:
- Topic 1 to include a note in table 1 stating that for cash-out refinances, the loan amount, including the funding fee, may not exceed 100% of the reasonable value as determined by VA;
- Topic 2 to include an eligible loan purpose “refinancing of contracts for deed” and to indicate in section c that Veterans may receive cash back for amounts credited for prorated taxes paid in arrears;
- Topic 3 to rename table 2 in section a, to provide more detail on determining the maximum loan amount by loan type, and to remove from section c the “rule of thumb” lenders should employ when determining the down payment amount;
- Topic 4 to reflect the implementation the Blue Water Navy Vietnam Veterans Act of 2019 and to provide additional information on calculating remaining entitlement for Veterans with partial, or encumbered, entitlement;
- Topic 5 to remove references to the Regional Loan Center and to remove from section i the reference to VA Form 26-1802a (as the form has been discontinued); and
- Topic 6 to update section b to ensure borrowers receive updated disclosures, as applicable, when the agreed upon interest rate changes.
In addition, topics 1 through 6 were updated to remove hyperlinks and to make minor grammatical edits. The revisions went into effect May 14, 2024.
Click to view the VA Pamphlet 26-7, Revised Change 40: https://www.tenaco.com/wp-content/uploads/2024/05/VA-Pamphlet-26-7-Revised-Change-40-05-21-24.pdf
