h. Veteran’s Statement

The following statement must be signed by the veteran and submitted with each prior approval application or automatic loan report involving a VA GPM:

   “I fully understand that because of the graduated-payment loan obligation I am undertaking, my mortgage payment excluding taxes and insurance will start at $________ and will increase by 7.5% each year for five years to a maximum payment of $_________ , and the mortgage balance will increase to no more than $_________ at the end of the _____ year.  The maximum total amount by which the deferred interest will increase the principal is $________.  Monthly installments will be due according to the following schedule:

·   $__________ during the first year of the loan

·   $__________ during the second year of the loan

·   $__________ during the third year of the loan

·   $__________ during the fourth year of the loan

·   $__________ during the fifth year of the loan

·   $__________ during the sixth year of the loan and every year thereafter.”

If the interest rate increases after the veteran has signed the initial statement, an amended statement must be prepared and signed by the veteran before loan closing, and included with the loan closing package.

i. Other Requirements

The property securing the loan must have a remaining economic life of at least 30 years, as shown on the [ ] NOV.

While a GPM cannot be used to refinance another loan, a GPM can be refinanced by a fixed rate VA-guaranteed refinancing loan.