Virginia Law

The executive director may establish mortgage loan programs funded by taxable bonds or other resources. 13VAC10-40-10 through 13VAC10-40-220 shall apply to such mortgage loan programs, with the following modifications:

1. The following requirements shall not apply: (i) the requirement as to maximum allowable sales price of the property to be financed; (ii) the requirement that each applicant shall not have had a present ownership interest in his principal residence within the preceding three years (the first-time homebuyer or three-year requirement); (iii) the net worth requirement; and (iv) the lot size restriction in 13VAC10-40-50 C 3.

2. The gross income of the applicants shall not exceed 120% of the applicable median family income without regard to household size, provided, however, that the authority may increase such percentage of applicable median family income, not to exceed 150%, if the executive director determines that it is necessary to provide financing in underserved areas identified by the executive director to persons with disabilities (i.e., physically or mentally disabled, as determined by the executive director on the basis of medical evidence from a licensed physician or other appropriate evidence satisfactory to the executive director), to applicants with a household size of two or more persons, or other similarly underserved individuals identified by the executive director.

3. At the time of closing, each applicant must occupy or intend to occupy within 60 days (or such longer amount of time as the executive director determines is reasonable in the case of new construction) the property to be financed as his principal residence.

4. The property to be financed must be one of the following types: (i) a single family residence (attached or detached); (ii) a unit in a condominium or PUD that is approved for financing by Fannie Mae or Freddie Mac or satisfies the requirements for such financing, except that the executive director may waive any of such requirements if he determines that any additional risk as a result of such waiver is adequately compensated or otherwise covered by the terms of the mortgage loan or the financial strength or credit of the applicants; or (iii) a doublewide manufactured home permanently affixed to the land.

5. The land, residence, and all other improvements on the property to be financed must be expected to be used by the borrowers primarily for residential purposes.

6. Mortgage insurance shall not be required, unless the executive director determines that it is reasonable or necessary to protect the financial interests of the authority.

7. The documents relating to requirements of the federal tax code governing tax-exempt bonds shall not be required.

8. For assumptions of loans, the requirements for (i) occupancy of the property as the borrower's principal residence and (ii) the income limit in this section must be satisfied.

9. The authority may accept an approval of an automated underwriting system if the executive director determines that such delegated underwriting system is designed so as to adequately protect the financial integrity of the loan programs funded by taxable bonds.

Except as modified in this section, all requirements, terms, and conditions set forth in 13VAC10-40-10 through 13VAC10-40-220 shall apply to the mortgage loan programs established pursuant to this section.