Change Date

September 15, 2004, Change 4

This section has been changed to create subsection lettering.

a. Procedures

Prior to requesting an appraisal of proposed construction, the lender must review the sales contract or purchase agreement on the property.  The lender must determine whether the contract

·   is acceptable, and

·   does not contain unfair contractual provisions.

The lender may request revision of an unacceptable contract by the parties to the transaction.

The lender should report unacceptable contract practices by a VA program participant (such as a builder) to VA if

·   the program participant is engaged in practices which seriously prejudice the interests of veterans or the Government, or

·   the program participant repeatedly uses unacceptable contracts or contracts containing unfair contractual provisions, and is uncooperative in changing such practices.

The closing of the loan indicates that the lender has determined the contract is acceptable.