Change date

September 15, 2004, Change 4

This section has been changed to create subsection lettering.

a. Amount of Cash Required

The applicant or spouse must have sufficient cash to cover

·   any closing costs or points which are the applicant’s responsibility and are not financed in the loan

·   the down payment, if a Graduated Payment Mortgage, and

·   the difference between the sales price and the loan amount, if the sales price exceeds the reasonable value established by VA.

VA does not require the applicant to have additional cash to cover a certain number of mortgage payments, unplanned expenses, or other contingencies.

However, the applicant’s ability to accumulate liquid assets and the current availability of liquid assets for unplanned expenses should be considered in the overall credit analysis.

b. Verification Requirement

Verify all liquid assets owned by the applicant or spouse to the extent they are needed to close the loan.  In addition, verify any liquid assets that may have a bearing on the overall credit analysis; that is, significant assets.

·   Use VA Form 26-8497a, Request for Verification of Deposit, as appropriate,

OR original or certified true copies of the applicant’s last 2 bank statements.

OR the borrower’s bank statements available to them by Internet or faxed from the depository directly to the lender.  In cases where the lending institution uses Internet based verifications, ensure the URL appears on the document. 

·   Verifications must be no more than 120 days old (180 days for new construction).

-   For automatically closed loans, this means the date of the deposit verification is within 120 days of the date the note is signed (180 days for new construction).