Prior Approval Loan Procedures. Which loans require prior underwriting by VA?. Joint loans Veteran/Non-Veteran Veteran/Veteran Loans to veterans receiving nonservice-connected pension Loans to veterans rated incompetent by VA
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Any joint loan for which title to the property will be held by the veteran and any person other than the veteran’s spouse must be submitted to VA for prior approval.
Two or more veterans each using their VA entitlement to guaranty the loan.
A loan involving at least one veteran and one non-veteran (not including the spouse).
What does this mean to the lender?
Because VA will only guaranty the veteran’s portion of the loan, the lender could end up with less than 25% coverage on the total loan. The lender’s investor may require that a down payment be made on the non-veteran’s portion of the loan.
See Chapter 3, section 4a of the VA Lender's Handbook for the guaranty calculation table.
(made to refinance a delinquent VA loan)
Except for the types of loans previously discussed, an automatic lender must use their automatic authority in every possible instance before submitting a loan to VA for underwriting on the prior approval basis.*
*The lender’s underwriter must provide analysis and explanation for submitting to VA for prior approval.
VA Lender’s Handbook
Contact your nearest VA Regional Loan Center
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