Jul 5, 2018

VA Program Guidelines Update

The President of the United States signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act. The Act prohibits Ginnie Mae from guaranteeing securities issued on or after May 24, 2018, if such securities are backed by a refinance loan that is guaranteed under the United States Department of Veteran Affairs benefit program and that does not meet the condition provided in the Act. 
To qualify for inclusion in a Ginnie Mae guaranteed MBS, the Act requires VA refinance loans to have a note date that is on or after, the later of:
1. the date that is 210 days after the date on which the first monthly payment is made on the mortgage being refinanced, or
2. the date on which six (6) full monthly payments have been made on the mortgage being refinanced. 
Effective immediately, VA refinance transactions must meet the revised seasoning requirements in order to be eligible for funding/purchase. Plaza's VA Program Guidelines have been updated to align with Ginnie Mae requirements. 
Additionally, for applications taken on or after May 25, 2018 VA IRRRLs must provide a net tangible benefit as described in VA Circular 26-18-13 and all fees and incurred costs referenced in the circular, shall be recouped by the veteran within 36 months after the loan closes. The recoupment calculation is the result of lower monthly payments of the refinanced loan.

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