Change Date

September 15, 2004, Change 4

·  This section has been changed to update formatting for subsection lettering.

·  Subsection a has been changed to include the previous subsection c.

a. What are they?

These consist of loans to refinance

·  construction loans

·  installment land sale contracts, and

·  loans assumed by veterans at interest rates higher than that for the proposed refinance.

Note: These loans are like cash-out refinancing loans except:

·  the maximum loan amount is different—these loans are not based on 90 percent of reasonable value, and

·  no cash is received by the borrower at close.

b. Maximum Loan

These loans may not exceed the lesser of

·  the VA reasonable value plus the VA funding fee, or

·  the sum of the outstanding balance of the loan to be refinanced plus allowable closing costs (including the funding fee) and discounts.

The cost of energy efficiency improvements can also be added to the loan.