e. General Procedures

No prior approval of VA is required to escrow funds.  Lenders are responsible for establishing escrows in accordance with the guidelines presented in this topic.  Lenders are also responsible for assuring that the postponed work is completed.  Once the loan closes, VA will randomly monitor cases to ensure completion of escrowed items. 

Lenders escrowing funds should follow the procedures below:

Step

Action

1

Execute VA Form 26-1847, Request for Postponement of Offsite or Onsite Improvements - Home Loan.

2

Close loan and escrow the required funds

3

Submit closed loan package for issuance of guaranty with completed

·   VA Form 26-1847

·   VA Form 26-1849, Escrow Agreement for Postponed Exterior Onsite Improvements, or, if improvements are offsite, and

·   VA Form 26-6378, Escrow Agreement for Postponed Exterior Offsite Improvements.

4

Release escrowed funds when work is satisfactorily completed, as evidenced by

·   a completed VA Form 26-1839, Compliance Inspection Report, indicating the postponed work has been satisfactorily completed, or

·   if the postponed work is minor, uncomplicated, and not involving structural issues)

-   written certification from the lender indicating the work has been completed, and

-   statement from the veteran-purchaser that he or she is satisfied with the work.

Note:  In cases involving postponed improvements which affect more than one loan by a lender in a tract development, VA Form 26-1849 and VA Form 26-6378 will only be required for the initial loan to a veteran in the development.