Change Date

September 15, 2004, Change 4

·  This section has been changed to create subsection lettering.

·  Subsection c has been changed to delete Step 12.  VAF 26-1805 is now available through TAS.  The form is no longer required for issuance of a commitment on prior approval loans. Steps following 12 have been renumbered.

a. Which Loans are Submitted for Prior Approval?

Lenders without automatic authority must submit all loans to VA for prior approval except IRRRLs made to refinance loans that are not delinquent.

All lenders, whether or not they have automatic authority, must submit the following types of loans to VA for prior approval:

·   Joint loans

·   Loans to veterans in receipt of VA nonservice-connected pension*

·   Loans to veterans rated incompetent by VA*

·   Interest Rate Reduction Refinancing Loans made to refinance delinquent VA loans

·   Manufactured home loans (Except when the manufactured home is permanently affixed to the lot and considered real estate under state law) unless the lender has been separately approved for this purpose

·   Cooperative loans (contact VA to discuss)

·   Unsecured loans or loans secured by less than a first lien

·   Supplemental loans

*Lenders with automatic authority may also elect to submit a loan (of a type not on the above list) for prior approval when issues or circumstances cannot be resolved by the lender’s own underwriting staff.

·   The submission must include the underwriter’s analysis and explanation of why it is being submitted for prior approval.

Do not use this provision to shift the burden of a loan rejection to VA.