Part IV. Terms and Conditions
13VAC10-150-80. Maximum amount.
The authority shall provide to an eligible applicant a maximum amount available under the home equity account based upon the interest rate or rates to be charged thereon, the age of an individual applicant or of the youngest joint applicant as of the application date, and the value of the home.
The value of the home shall be determined by the authority based on the home's assessed value, unless the authority, at its option and at its cost, elects to have the home appraised and to use the appraised value rather than the assessed value in so determining the value of the home. Also, if requested by the applicant, the authority may, at its option and at the cost of such applicant, obtain an appraisal of the home for use by the authority, in lieu of the assessed value, in determining the value of the home.
Prior to September 1, 1988, and on or about January 1 of each subsequent year, the executive director shall establish a schedule which sets the maximum percentages of the home value by age group based upon the interest rate to be in effect for such year. The maximum amount of the home equity account during such year shall be equal to such maximum percentage applicable to the age group of the applicant (or, in the case of joint applicants, the youngest applicant) as of the application date times the value of the home.
The maximum amount which may be disbursed under any home equity account shall in no event exceed $50,000.
The applicant may, at its option, request a lower maximum amount than may be approved by the authority, in which case the maximum amount shall be the amount so requested.
Statutory Authority
§ 36-55.30:3 of the Code of Virginia.
Historical Notes
Derived from VR400-02-0015 § 4.1, eff. July 19, 1988; amended, Virginia Register Volume 5, Issue 6, eff. November 21, 1988; Volume 5, Issue 21, eff. July 1, 1989.
13VAC10-150-90. Adjustments in the maximum amount.
The maximum amount available under a home equity account shall be adjusted annually in accordance with the schedule then established pursuant to 13VAC10-150-80 hereof. For the purpose of determining such adjusted maximum amount, the age of the borrower shall be his age (or, in the case of joint borrowers, the youngest borrower's age) as of January 1 of such year. Notwithstanding the foregoing, such maximum amount shall not be increased if (i) the authority has determined not to make funds available for such increase, or (ii) the applicant requests that the maximum amount not be increased.
If on or after five years from the date of extension of the home equity account the borrower has utilized the maximum amount available thereunder, he may request the authority to approve an increase in the value of the home. Such increase may be granted only if such increase is due to appreciation or improvements. Any such increase shall be determined by the authority based upon the then current assessed value, except that the authority may, at its option and at the request and cost of the borrower, obtain an appraisal for use by the authority, in lieu of the assessed value, in so determining the value of the home. The maximum amount available under the home equity account, as so increased, shall be calculated in accordance with the schedule established pursuant to 13VAC10-150-80 using the age of the borrower (or, in the case of joint borrowers, the age of the youngest borrower) as of January 1 of the year in which the request was made. Increases in such maximum amount are subject to the determination by the authority to make funds available therefor and shall be at the sole discretion of the authority.
In the event that the borrower had originally requested and received a home equity account in a maximum amount less than the maximum amount for which he was eligible under the schedule established pursuant to 13VAC10-150-80, the authority may, at its option and upon the written request of the borrower, increase the maximum amount available under the home equity account up to the maximum amount for which the borrower would then be eligible. Such an increase may be granted at any time upon the request of the borrower and without a determination of a new assessed or appraised value, subject to the authority's determination to make funds available therefor and shall be at the sole discretion of the authority.
Statutory Authority
§ 36-55.30:3 of the Code of Virginia.
Historical Notes
Derived from VR400-02-0015 § 4.2, eff. July 19, 1988; amended, Virginia Register Volume 5, Issue 6, eff. November 21, 1988; Volume 5, Issue 21, eff. July 1, 1989.
13VAC10-150-100. Loan term.
The term of a home equity account loan shall not be a fixed period of time; provided, however, that the term of such loan shall in no event exceed 50 years. Such loan shall be due and payable upon the occurrence of any of the following events:
1. A sale or transfer (whether voluntary or involuntary) of the home or any interest therein (other than a transfer to a joint borrower) without the authority's prior written consent.
2. Failure by the borrower and, in the case of joint borrowers, all borrowers to occupy the home as his or their principal residence. Absence from the home for a period of more than 180 consecutive days, without the prior written consent of the authority, shall be deemed to be such a failure.
3. The use of the home, in whole or in part, for purposes other than as a principal residence without the prior written consent of the authority.
4. Failure to pay the home equity balance in full within nine months after the death of the borrower or, in the case of joint borrowers, within nine months after the death of the last surviving borrower.
The home equity account loan may also be declared immediately due and payable in full, at the option of the authority, upon the occurrence of any of the acts of default set forth in 13VAC10-150-140 of this chapter.
Statutory Authority
§ 36-55.30:3 of the Code of Virginia.
Historical Notes
Derived from VR400-02-0015 § 4.3, eff. July 19, 1988; amended, Virginia Register Volume 5, Issue 6, eff. November 21, 1988; Volume 5, Issue 21, eff. July 1, 1989.
13VAC10-150-110. Interest rate and compounding.
The interest rate to be charged on equity payments disbursed under the program during any calendar year shall be established by the authority prior to January 1 of such year. Any such interest rate shall not apply to equity payments disbursed during prior calendar years. Interest shall be compounded on the first day of each month at the applicable interest rate.
The authority shall establish from time to time a maximum interest rate to be charged on home equity account loans closed subsequent to the establishment of such rate.
Statutory Authority
§ 36-55.30:3 of the Code of Virginia.
Historical Notes
Derived from VR400-02-0015 § 4.4, eff. July 19, 1988; amended, Virginia Register Volume 5, Issue 6, eff. November 21, 1988; Volume 5, Issue 21, eff. July 1, 1989.
13VAC10-150-120. Equity payments.
A borrower may from time to time request and receive equity payments under a home equity account, subject to the requirements and limitations set forth in these rules and regulations.
No scheduled equity payments shall be made to a borrower. The borrower is required to request and receive an initial equity payment at the time of closing of the home equity account in an amount of not less than $1,000 for any of the purposes set forth in 13VAC10-150-190. Subsequent to the initial equity payment, the borrower may request and receive no more than one equity payment during a single calendar month, and each such equity payment must be in an amount of not less than $250.
All equity payments, other than the initial equity payment, shall be made to the borrower by the authority in the form of a check which will be mailed to the borrower's home.
The authority shall bill the borrower for payment of real property taxes and hazard insurance premiums as they become due. The borrower shall be obligated to submit payment to the authority within 30 days after the date of mailing. If payment is not so made, the authority, at its option, may pay property taxes and insurance premiums from the home equity account, to the extent not fully utilized, or may deem such nonpayment by the borrower to be an act of default under 13VAC10-150-140.
Statutory Authority
§ 36-55.30:3 of the Code of Virginia.
Historical Notes
Derived from VR400-02-0015 § 4.5, eff. July 19, 1988; amended, Virginia Register Volume 5, Issue 6, eff. November 21, 1988; Volume 5, Issue 21, eff. July 1, 1989.
13VAC10-150-130. Repayments.
The borrower is not required to make any repayments of principal or interest on the home equity account loan until such time as the loan is due and payable as described in 13VAC10-150-100 and 13VAC10-150-140. The borrower may, at his option, elect to prepay at any time the home equity account loan, in whole or in part, and any such prepayments shall be applied first to accrued interest and then to the outstanding principal amount of the home equity account loan.
Statutory Authority
§ 36-55.30:3 of the Code of Virginia.
Historical Notes
Derived from VR400-02-0015 § 4.6, eff. July 19, 1988; amended, Virginia Register Volume 5, Issue 6, eff. November 21, 1988; Volume 5, Issue 21, eff. July 1, 1989.
13VAC10-150-140. Acts of default.
The occurrence of any of the following events will constitute an act of default for which the home equity account loan shall, at the option of the authority, become immediately due and payable:
1. The imposition on the home or any part thereof of any lien or encumbrance (including mechanics' or tax liens) without the authority's prior written consent, if such lien or encumbrance may have priority over the lien of the home equity account loan or any prior or future equity payments thereunder and is not removed within 90 days.
2. Physical deterioration of the home beyond normal wear and tear and failure to repair, replace and maintain the various components of the home when required or necessary, including the failure to repair damage caused by fire or other casualty within a reasonable time after the occurrence as determined by the authority in its sole discretion.
3. Failure to make payment to the authority for taxes and insurance premiums as described in 13VAC10-150-120.
4. A borrower's admission of his inability to pay his debts, making any assignment for the benefit of creditors or filing for relief under federal bankruptcy statutes. The filing of a petition in bankruptcy against the borrower without the borrower's consent will not be an act of default if the petition is dismissed within 60 days of filing.
5. Any omission or misrepresentation by the applicant in the application or in any equity payment request.
6. Any other occurrence which constitutes a default under the terms of the deed of trust securing the home equity account loan.
Upon default, the authority shall be entitled to exercise any one or more of the remedies set forth in the home equity account loan documents or available at law or in equity; provided, however, that, except in the case of a default as described in subdivisions 2 and 5 of this section, the authority shall not seek any personal judgment against the borrower but shall look solely to the home for payment of the home equity account loan.
Statutory Authority
§ 36-55.30:3 of the Code of Virginia.
Historical Notes
Derived from VR400-02-0015 § 4.7, eff. July 19, 1988; amended, Virginia Register Volume 5, Issue 6, eff. November 21, 1988; Volume 5, Issue 21, eff. July 1, 1989.
13VAC10-150-150. Term and extensions of home equity account.
The term during which the borrower shall have the right to request and receive equity payments under a home equity account shall be (i) five years, if the application shall be received prior to September 1, 1989; or (ii) such period of time as the executive director may establish prior to the closing thereof, if the application shall be received on or after September 1, 1989. The executive director may extend such term and any extensions thereof for such period of time and upon such terms and conditions as he may deem appropriate to accomplish the purposes of the program and to best utilize the resources of the authority. The expiration of such term or any extensions thereof shall not in any way affect the then existing principal balance of the home equity account loan or any accrued interest thereon.
Statutory Authority
§ 36-55.30:3 of the Code of Virginia.
Historical Notes
Derived from VR400-02-0015 § 4.8, eff. July 19, 1988; amended, Virginia Register Volume 5, Issue 6, eff. November 21, 1988; Volume 5, Issue 21, eff. July 1, 1989.
13VAC10-150-160. Repairs.
The authority shall have the right to inspect the home from time to time, to require the borrower to make such repairs as are determined by the authority to be necessary to maintain the home in good condition, and, if such repairs are not promptly made, to cause such repairs to be made and to disburse equity payments under the borrower's home equity account to the parties performing such repairs in amounts necessary to pay the costs thereof.
Statutory Authority
§ 36-55.30:3 of the Code of Virginia.
Historical Notes
Derived from VR400-02-0015 § 4.9, eff. July 19, 1988; amended, Virginia Register Volume 5, Issue 6, eff. November 21, 1988; Volume 5, Issue 21, eff. July 1, 1989.