Compliance Calendar

The Selling Guide has been updated to include changes to the following:

▪ Employment offers or contracts: prohibits an employment offer or contract for future employment from a family member or interested party to the transaction

▪ Lender staffing, training, and policies and procedures: updating general lender requirements regarding lender staffing, training, and policies and procedures to maintain seller/servicer eligibility

▪ Shared appreciation: clarifying the policy in regard to an unauthorized transfer of ownership or change in occupancy status In addition, we updated Special Lender Approval Form (Form 1000A) to make it easier for lenders to apply to sell or acquire servicing for HomeStyle® Renovation Mortgages. The updated form will provide an option for standard or conditional approval depending on whether the lender will manage the renovation services in-house or leverage a third-party vendor.

The Selling Guide has been updated to include changes to the following:

▪ Value acceptance + property data for condos: expanding value acceptance + property data offering to include

attached and detached condos as an eligible property type and other clarifications

▪ Qualifying rate for 7- and 10-year ARMs: clarifying policy that lenders must qualify 7- and 10-year ARM borrowers

at no less than the note rate for loans that are not high-priced mortgage loans or higher-priced covered

transactions

▪ Manufactured housing cash-out refinance term extension: allowing loan term up to or equal to 30 years on cashout refinance transactions for multi-width manufactured homes

▪ Eligible types of nontraditional credit references: adding additional examples of nontraditional credit references

related to housing expenses

▪ Use of business income: clarifying income calculation requirements for self-employed borrowers and borrowers

with less than a 25% interest in a business

▪ Property insurance requirements: providing various clarifications for coverage requirements

▪ Mortgage origination definitions: updating existing and adding new language to address the mortgage origination

definitions in the Glossary

▪ Miscellaneous updates:

o Unacceptable Appraisal Practices

o National Flood Insurance Program lapse

o Borrowers’ signatures on notes

View the list of impacted topics.

1. Purpose. The purpose of this Circular is to extend the rescission date of Circular 26-19-31

2. Action. Therefore, Circular 26-19-31, Change 2 is changed as follows:

Page 5, Paragraph 4: Delete “January 1, 2024.” and replace with “This Circular is valid until rescinded.”

3. Rescission. This Circular is valid until rescinded.

1. Purpose. The purpose of this Circular is to update, clarify, and consolidate instructions related to the COVID-19 Home Retention Waterfall and COVID-19 Refund Modification home retention option. Key features include a 40-year repayment term for a COVID-19 Refund Modification, clarification of VA’s expectations under Starting Point III, Step D, of the COVID-19 Home Retention Waterfall, and extension of the availability of COVID-19 related assistance through May 31, 2024.

2. Effective and Applicability Dates. This Circular is effective immediately. This Circular applies to borrowers being offered assistance under the COVID-19 Home Retention Waterfall. Servicers are to utilize the COVID-19 Home Retention Waterfall as part of their available loss mitigation options through May 31, 2024.

3. Background. In July 2021, VA published Circular 26-21-13,1, which outlines VA’s preferred order of home retention options to help servicers assist borrowers affected by the COVID-19 pandemic. In July 2023, VA published VA Circular 26-23-12,2 which (1) updated the COVID-19 Home Retention Waterfall to remove the COVID-19 Veterans Assistance Partial Claim Payment option (COVID-VAPCP), 3 and (2) reiterated the parameters of the COVID-19 Refund Modification with two updates. Through this Circular, VA is once again updating the COVID-19 Home Retention Waterfall to reiterate existing home retention options, including the COVID-19 Refund Modification, for borrowers who received COVID-19 forbearance. VA remains committed to assisting borrowers who experience financial hardship due directly or indirectly to the COVID-19 pandemic.

Servicers are to follow this updated waterfall, choosing appropriate options based on borrowers’ self-assessment of their ability to resume regular payments on a VA-guaranteed loan4 and to repay amounts missed under a COVID-19 forbearance. 5 VA is also reminding servicers that, where applicable, servicers must comply with all Ginnie Mae program requirements.

4. How This Circular Is Arranged. Section 5 identifies the borrowers to whom the COVID-19

1. Purpose. The purpose of this Circular is to consolidate updates related to VA’s disaster modification and loan deferment options. These options were previously described by Circular 26-21-07 and subsequent change circulars. For borrowers affected by COVID-19, these options will continue to be available through May 31, 2024.

2. Effective Date. This Circular is effective immediately.

3. Disaster Modifications and Loan Deferment.

a. Chapter 5.06 of the VA Servicer Handbook M26-4 provides circumstances in which servicers may offer a VA Disaster Modification or a Disaster Extend Modification.1

The Servicing Guide has been updated to include changes to the following:

▪ Property insurance requirements**: clarifies servicer responsibilities related to monitoring and verification of property insurance coverage

▪ Miscellaneous updates:

o Flood insurance*

o Remote online notarization requirements*

View the list of impacted topics.

*Policy change not applicable to reverse mortgage loans.

**Policy change applies only to Home Keeper® loans and is not applicable to HECM mortgage loans.

Click the link to read the full USDA notification.

Please click the link to read the full circular.

Click the link to read the full circular.

The provisions of this DLL apply to Section 184 and Section 184A case numbers assigned on or after February 28, 2024.

For appraisals related to Servicing and Loss Mitigation, the provisions of this DLL apply to appraisals with effective dates on or after February 28, 2024.