Change Date

September 15, 2004, Change 4

This section has been changed to create subsection lettering..

a. General rules

The following table provides general rules and information critical to understanding a VA  loan guaranty.  Exceptions and detailed explanations have been omitted.  Instead, a reference to the section in this handbook which addresses each subject is provided.

Subject

Explanation

Section

Maximum Loan Amount

VA has no specified dollar amount(s) for the “maximum loan.”  The maximum loan amount depends upon

·   the reasonable value of the property indicated on the [ ] NOV, and

·   the lenders needs in terms of secondary market requirements.

3 of this chapter

Down payment

No down payment is required by VA unless the purchase price exceeds the reasonable value of the property, or the loan is a GPM.  The lender may require a down payment if necessary to meet secondary market requirements.

3 of this chapter

Amount of Guaranty

The lesser of

·   the veteran’s available entitlement indicated on the COE (plus up to $24,000 additional for certain loans over $144,000), or

the maximum potential guaranty from the maximum guaranty table (Highest possible guaranty is $60,000).

4 of this chapter

Occupancy

The veteran must certify that he or she intends to personally occupy the property as his or her home.

5 of this chapter