Mississippi Administrative Code
Title 25 - Military and Veterans - Veterans' Home Purchase Board
Part 202 - Loan Policies
Chapter 8 - Loan Assumption Policy
Rule 25-202-8.1 - VA Guaranteed Loans

Universal Citation: MS Code of Rules 25-202-8.1

Current through September 24, 2024

A. Loans closed prior to March 1988 may be assumed by veterans and /or non-veterans. Board approval is not required. Department of Veterans' Affairs policies, rules and regulations will apply.

1. Requirements:
a. A $35.00 transfer fee.

b. Title Certificate must be provided to and approved by VHPB prior to close of new loan package. Title must be clear of all encumbrances except VHPB.

c. A recorded Assumption Transfer Deed signed by both the grantees and grantors. The attached assumption clause must be signed by the grantees and grantors and included as an attachment to the Assumption Transfer Deed. (Exhibit A)

d. A current hazard insurance policy in the new borrower's name with the Veterans' Home Purchase Board shown as mortgagee must be provided at closing.

e. A paid receipt for the first year's insurance premium required at closing.

f. Home and work telephone numbers, mailing address, and social security numbers of the new borrowers must be provided at closing.

g. A copy of the Driver's License and Social Security card of each borrower is required at closing.

h. An acknowledgement signed by the sellers and buyers determining who is to receive the current escrow balance on the loan. If there is an escrow shortage, then the shortage amount must be paid at closing.

2. Applicant must send in $35.00 at time of application. Application is a letter signed by the veteran and the new purchasers requesting the loan assumption. The application letter must contain current loan number, purchaser's social security numbers, home and work address, and home and work telephone numbers. The Closing attorney must provide VHPB with a Title Certificate prior to loan closing. The Loan Servicing Manager or Supervisor or the Executive Director prior to closing of the loan assumption must approve the Title Certificate. The closing attorney must call and obtain current loan balance and determine if payments are current provide VHPB with the recorded Assumption Warranty Deed with the attached clause (Exhibit A) signed by all parties, provide VHPB with a current hazard insurance policy for at least the amount of the loan balance with VHPB as mortgagee, provide VHPB with a paid receipt for the first year of hazard insurance premium, provide VHPB with a copy of the new purchaser's social security card and driver license, and provide VHPB with an acknowledgement signed by all parties determining the responsibility of the current escrow account and shortage, if required. Once all of this information is received by the VHPB loan processing specialist, then the loan will be amended on the computer system to reflect the new borrower's information. The loan processing specialist will order the flood certification. All items will then be placed in a file folder and placed in the permanent file by the loan processing specialist. Nothing is to be changed on the computer until all documents and fees are received from the attorney and correct.

B. Loans closed between March 1988 and January 1, 1991 may be assumed by veterans and / or non-veterans. Board approval of satisfactory income, employment, and credit is required. DVA policies, rules and regulations will apply.

1. Requirements:
a. Veteran Assumption requires a $60.00 credit report fee to be paid at time of application. A $35.00 transfer fee and a funding fee of .05¢ of the loan balance are to be paid at closing. The closing attorney must call when preparing closing documents to verify the loan balance.

b. Non-veteran assumption requires a $360.00 processing fee to be paid at time of application. ($50.00 refundable if the loan is disapproved) A funding fee of 1% of the loan balance is to be paid at closing. The closing attorney must call when preparing closing documents to verify the loan balance.

c. A Title Certificate must be provided to and approved by VHPB prior to loan closing.

d. The funding fee is not required if veteran has a service-connected disability. Veteran must show valid proof of service-connected disability from DVA.

e. A completed application packet must be provided at the time of application.

f. A recorded assumption transfer deed signed by both the grantees and grantors. The attached assumption cause must be signed by the grantees and grantors and included as an attachment to the Assumption Transfer Deed. (Exhibit A)

g. A current hazard insurance policy in the new borrowers name with the Veterans' Home Purchase Board shown as mortgagee must be provided at closing.

h. A paid receipt for the first year's insurance premium required at closing.

i. An acknowledgement signed by the sellers and buyers determining who is to receive the current escrow balance on the loan. If there is an escrow shortage, then the shortage amount must be paid at closing.

j. The loan must be current at the time of closing. If any payments are due they must be received by VHPB and Posted to the account prior to closing.

k. A Copy of the HUD-1 Settlement Statement must be furnished.

l. No Appraisal required.

2. Applicant must send in $60.00 at the time of application. Application is a full credit application package. A Title Certificate must be provided to and approved by VHPB prior to closing. The Loan Servicing Manager or Supervisor or the Executive Director prior to closing must approve the Title Certificate. The closing attorney must call and obtain the current loan balance and determine if payments are current; provide VHPB with the recorded Assumption Warranty Deed with the attached Exhibit A (if required) signed by all parties; provide VHPB with a current hazard insurance policy for at least the amount of the loan balance with VHPB as mortgagee; provide VHPB with a paid receipt for the first year of hazard insurance premium; provide VHPB with a copy of the new purchaser's social security card and driver license; collect and provide to VHPB $35 transfer fee or $360 assumption fee and the 5% funding fee; HUD Settlement Statement and provide VHPB with an acknowledgement signed by all parties determining the responsibility of the current escrow account and shortage, if required. Once all of this information is received by the VHPB loan processing specialist, the loan will be amended on the computer system to reflect the new borrowers' information. The loan processing specialist will order the flood certificate. All items will then be placed in a file folder and placed in the permanent file by the loan processing specialist. Nothing is to be changed on the computer until all documents and fees are received and correct.

C. Loans closed after January 1, 1991, may be assumed by veterans only, unless a non-veteran receives a waiver by the Board. Board approval of satisfactory income, employment, and credit is required. DVA policies, rules, and regulations will apply.

1. Requirements:
a. Veteran Assumption requires a $60 credit report fee to be paid at time of application. A $35 transfer fee and a funding fee of .5% of the loan balance are to be paid at closing. The closing attorney must call when preparing closing documents to verify the loan balance.

b. Non-Veteran assumption requires a $360 processing fee to be paid at time of application. ($50 refundable if the loan is disapproved) A funding fee of 1% of the loan balance is to be paid at closing. The closing attorney must call when preparing closing documents to verify the loan balance.

c. A Title Certificate must be provided to and approved by VHPB prior to loan closing.

d. The funding fee is not required if veteran has a service connected disability. Veteran must show valid proof of service connected disability from DVA.

e. A completed application packet must be provided at the time of application.

f. A recorded Assumption Transfer Deed signed by both the grantees and grantors. The attached assumption clause must be signed by the grantees and grantors and included as an attachment to the Assumption Transfer Deed. (Exhibit A)

g. A current hazard insurance policy in the new borrowers name with the Veterans' Home Purchase Board shown as mortgagee must be provided at closing.

h.A paid receipt for the first year's insurance premium required at closing.

i. An acknowledgement signed by the sellers and buyers determining who is to receive the current escrow balance on the loan. If there is an escrow shortage then the shortage amount must be paid at closing.

j. The loan must be current at the time of closing. If any payments are due they must be received by VHPB and posted to the account prior to closing.

k. A Copy of the HUD-1 Settlement Statement must be furnished.

l. No Appraisal required.

2. Applicant must send in $60.00 at the time of application. Application is a full credit application package. A Title Certificate must be provided to and approved by VHPB prior to loan closing. The Division Director or the Executive Director prior to loan closing must approve the Title Certificate. The closing attorney must call and obtain current loan balance and determine if payments are current, provide VHPB with the recorded Assumption Warranty Deed with any Exhibits signed by all required parties; provide VHPB with a current hazard insurance policy for at least the amount of the loan balance with VHPB as mortgagee; provide VHPB with a paid receipt for the first year of hazard insurance premium; provide VHPB with a copy of the new purchaser's social security card and driver license; collect and provide to VHPB $35 transfer fee or $360 assumption fee and the .5% funding fee; HUD Settlement Statement and provide VHPB with an acknowledgement signed by all required parties determining the responsibility of the current escrow account and shortage, if required. Once all of this information is received by the VHPB, the loan processing specialist will amend the computer records with the new borrower's information. The loan processing specialist will order the flood certificate. All items will then be placed in a file folder and placed in the permanent file by the loan processing specialist. Nothing is to be changed on the computer records until all documents and fees are received and correct.

Miss. Code Ann. § 35-7-7

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