VA 4.03(3)(n)3. 3. When the roof is on, the house is enclosed, and all other work is roughed in to include electrical, plumbing, heating and carpentry including windows and doors.
VA 4.03(3)(n)4. 4. After final inspection. Minor items that do not affect livability or work prevented because of weather related circumstances may be incomplete provided the lender establishes an adequate escrow of at least one and one-half times the cost to complete the items.
VA 4.03(3)(q)1. 1. The authorized lender obtains an agreement from the general contractor stating that should painting become necessary, the contractor shall do such painting at no expense to the mortgagor, authorized lender or the department;
VA 4.03(3)(q)3. 3. The authorized lender and general contractor agree not to authorize occupancy by the mortgagor until the required painting and other sweat equity tasks are completed.
VA 4.03(4)(b) (b) The loan documents shall be submitted to the department as an application for purchase of a completed housing accommodation and, if applicable, a garage.
VA 4.03(4)(c) (c) The housing accommodation and garage shall be fully constructed not more than 8 months from the date of commitment.
VA 4.03(4)(d)1. 1. An offer to purchase the land on which the housing accommodation is to be constructed, if the land is owned by the builder or a third party; or
VA 4.03(4)(d)2. 2. A copy of the recorded deed, if the land is owned by the applicant.
VA 4.03(4)(f) (f) The appraisal submitted to the department shall be based upon the value of the property after completion of construction in accordance with the plans and specifications.
VA 4.03(4)(g) (g) Upon completion of construction, the general contractor shall warrant, in writing, against defects in materials and workmanship for a period of not less than one year from the date of completion.
VA 4.03(4)(h) (h) Lien waivers shall be obtained and submitted to the lender upon completion.
VA 4.03(4)(i) (i) The housing accommodation and garage, if applicable, shall be fully completed. Final inspection shall be made by an appropriate inspector prior to closing.
VA 4.03(4)(j) (j) A single disbursement by the department may be made only upon compliance with all of the foregoing requirements. Minor items that do not affect livability or work prevented because of weather related circumstances may be incomplete provided the lender establishes an adequate escrow of at least one and one-half times the cost to complete the items.
VA 4.03(5) (5)Second applications.
VA 4.03(5)(b) (b) If an applicant failed to repay a department loan in a timely manner or quitclaimed real estate back to the department in lieu of foreclosure within the 5 years preceding application for a second certificate of eligibility, the applicant is ineligible to receive a second certificate of eligibility or a primary housing loan unless the applicant can establish strong offsetting characteristics. The department may consider whether or not the department incurred a loss as a result of the quitclaim and whether a loss of employment due to no fault of the applicant or other unavoidable circumstances caused the underlying repayment problem.
VA 4.03(7) (7)Floodplain. Life of loan flood certifications are required for loan applications. If the property is in a 100 year floodplain, flood insurance shall be obtained on the property and shall be available at the time of closing. The property is deemed to be in a 100 year floodplain only if the buildings thereon are in the 100 year floodplain.
VA 4.03(8) (8)Wells and septic systems.
VA 4.03(10) (10)Term. The amortization period of a housing loan may not exceed 30 years.
VA 4.03(11) (11)Business use. Except for a housing loan for a purpose designated in s. 45.34 (1) (c), Stats., the department may not approve a housing loan for a residence, other than a multi-family residence which may be financed under sub. (12), in which it is reasonably expected that more than 15% of the total area is to be used in a trade or business.
VA 4.03(12) (12)Multi-family residence. Except for a housing loan for a purpose designated in s. 45.34 (1) (c), Stats., the department may not approve a housing loan for a multi-family residence unless the housing accommodation has four units or less, the applicant intends to occupy one unit of the housing accommodation and the housing accommodation was first occupied as a residence at least 5 years before the mortgage is executed.
VA 4.03 History History: Cr. Register, May, 2000, No. 533, eff. 6-1-00; CR 05-008: am. (2) Register May 2005 No. 593, eff. 6-1-05.
VA 4.05 VA 4.05 Financial requirements.
VA 4.05(1) (1) Veteran's contribution. If the applicant's contribution required under s. 45.35, Stats., or any closing costs and moving expenses as the applicant may be required to pay, has been or is to be acquired by borrowing, other than from a government sponsored program, a program approved by the department or from the applicant's own assets, the application shall not be approved. The applicant must be financially able with the aid of the housing loan applied for to complete the purchase, construction or improvement and to pay all required closing and moving expenses. When the sales price, construction cost or total cost exceeds the value pursuant to s. VA 4.07 (2), the applicant's contribution required under s. 45.35, Stats., will be increased by the excess. Work credits, rent credits or other reductions of the price of the property being acquired by an applicant may be allowed but only after the applicant establishes that a 5% down payment has been made from the applicant's own funds. Mortgage funds may not be utilized to pay closing costs. Applicants shall submit verifications of all deposits in excess of $100 which will constitute a portion of their contribution.
VA 4.05(3) (3)Personal property. The cost of any personal property included in a construction or improvement contract shall be paid by the applicant. The payment may not constitute part of the applicant's equity in the property. Carpeting, built-ins, fixtures or other items permanently affixed to the structure may not be considered personal property. No personal property may be financed with primary housing loans.
VA 4.05(5) (5)Liabilities. To determine whether the level of indebtedness is excessive, the department and authorized lender shall analyze the stated purposes for which an applicant's debts were incurred, the total amount of the indebtedness in relation to income, and the applicant's record of meeting past financial obligations. The purpose for which all debts were incurred shall be stated on the application. If the department or authorized lender determines the accumulated indebtedness indicates financial instability or the amount of monthly payments will impair the applicant's ability to make shelter cost payments and meet ordinary living expenses, the loan application shall be denied. Accumulation of net worth may be considered to be an indication of creditworthiness.
VA 4.06 VA 4.06 Property qualifications.
VA 4.06(1) (1) General. The department may approve a housing loan only on a housing accommodation which is determined to be adequate housing, either at the time of loan closing or after the completion of the improvements or rehabilitation to be completed with the assistance of a housing loan. If the property has any deficiencies, it may be considered adequate housing if the lender has established an adequate escrow of the sellers funds. The housing accommodation must be located in Wisconsin. The housing accommodation shall be occupied by the applicant as the applicant's and dependent's residence.
VA 4.06(4) (4)Property analysis. The department shall use federal regulations and guidelines issued by the Fannie Mae Program for evaluating properties. Loans may not be approved on properties that fail to meet the standards and the standards and guidelines shall be used for determining the maximum number of years for which loans will be made on properties offered as security.
VA 4.06 History History: Cr. Register, May, 2000, No. 533, eff. 6-1-00.
VA 4.07 VA 4.07 Appraisals.
VA 4.07(2) (2)Use of appraisals. Appraisals shall be used to determine whether the properties so appraised adequately secure proposed housing loans, but the appraisals are advisory only. The department may determine the value of properties for its purposes by means of property inspection by department representatives, by obtaining appraisal reports at its own expense, or by such other means as it deems practical.
VA 4.07(3) (3)Appraisers. The secretary may designate appraisers in any county for the protection of veterans and the department.
VA 4.07(4) (4)Disinterest. The appraiser may not have an interest in the property to be purchased or constructed, or be employed by the lender, except under exceptional circumstances with prior approval of the department.
VA 4.07(5)(c) (c) The appraiser may evaluate personal property if personal property of value is included in the property to be purchased or constructed.
VA 4.07 History History: Cr. Register, May, 2000, No. 533, eff. 6-1-00.
VA 4.08(1)(b) (b) A certificate of eligibility may be issued only to an applicant whose previous transactions with the department would in no way bar approval of another loan by the department.
VA 4.08(1)(d) (d) If the original certificate has been lost and the applicant is still an eligible veteran at time of application for reissue, a certificate of eligibility may be reissued.
VA 4.08(2) (2)Contracts. No lender may process a mortgage loan application until the lender has entered into a contract with the department. The contract shall delineate or include reference to the responsibilities of the authorized lenders and other matters set forth in s. 45.37 (5) (a) 1., Stats., shall vest authorized lenders with such powers as the department deems necessary to enable them to properly carry out their servicing responsibilities, shall specify the minimum number of days notice to the department of anticipated closing or first disbursement dates, and shall specifically require such lenders to execute warranties and servicing agreements in connection with primary loans closed by them. The provisions of the warranties and agreements shall be deemed to be incorporated into the contract.
VA 4.08(3) (3)Application. Application for a primary loan shall be made through the authorized lender of the applicant's choice. The application shall be completed on forms prescribed by the department, and shall include the applicant's certificate of eligibility, a fact-built credit report, appraisal report, employment and deposit verifications and, if appropriate, plans, specifications, a construction contract, a survey, water analysis report, purchase agreement, and such other instruments and exhibits as the authorized lender deems necessary to complete the application.
VA 4.08(5) (5)Submission to the department. All applications approved by authorized lenders shall be submitted to the department for review and approval or denial. A loan application which has been submitted but which is found to lack the necessary information or documentation for the department to approve a loan, shall be denied, unless the lender corrects the deficiency within 60 days after notice of the deficiency by the department to the lender. Immediately upon approval of an application the department shall send a commitment letter to the authorized lender, committing the department to transfer funds as provided under s. 45.37 (5) (a) 4., Stats., subject to such funds being made available to the department. Loan commitments will expire 6 months from date of issuance, commitments for the purchase of a housing accommodation to be constructed (PC) and construction takeout loans (TO) will expire 8 months from the date of issuance, and construction (C) loan commitments will expire 12 months from the date of issuance. Commitments may be extended at the discretion of the department.
VA 4.08(7) (7)Warranty. As soon as practicable after the closing of a loan or after the first disbursement of funds in a construction loan the authorized lender shall transmit the executed mortgage note, summary of closing worksheet, mortgagor's affidavit and lender's warranty to the department. The lender's warranty shall be made on a form furnished by the department and shall contain information sufficient to enable the department to determine that a valid first lien complying with the requirements of all federal and state laws, exists in favor of the authority or of the department on the mortgaged premises and that the mortgagor has obtained, or in the case of construction loans will obtain, adequate fire and extended coverage insurance on the mortgaged premises. The lender's warranty will also contain such other information as the department requires from time to time.
VA 4.08(8) (8)Servicing agreements. Servicing agreements shall specifically empower authorized lenders to collect and retain late charges, NSF check charges, partial release fees, and amounts representing expenditures made by them with respect to mortgages executed or properties mortgaged to the department or to the lenders or to the authority for which they have not been reimbursed by the department. Late charges, NSF check charges and partial release fees not collected by such lenders from mortgagors, in addition to required principal, interest and escrow payments, may not be deducted from such payments, charged to the department or the authority or added to mortgage loan balances. The agreements shall specify the items for which authorized lenders may incur reimbursable expenses and the terms and conditions under which the department may pay such expenses.
VA 4.08(9) (9)Partial releases. An authorized lender may, with the consent of the department, release a portion of the property mortgaged to it or the department or the authority under a primary loan if the release of such property will not unduly diminish the value of the remainder of the property. The authorized lender shall require that any funds received by a mortgagor from the sale of property released be applied to reduction of the mortgage loan balance unless it is proposed that a part or all of such funds will be used to improve the property, in which case the authorized lender may approve and supervise the disbursement of funds for improvements.
VA 4.09 VA 4.09 Secondary loan program.
VA 4.09(2) (2)Payment distribution. Payments shall be applied first to interest, then to mortgage cancellation life insurance premiums, and then to principal.
VA 4.09(3) (3)Reduction in monthly payments. The terms of the contract between the mortgagor and the department shall be complied with by the mortgagor after the note and mortgage have been executed, but the department may change the time and manner of repaying the obligation at the request of the mortgagor when a change is justified by circumstances not in existence at the time the loan was made.
VA 4.09(5) (5)Release of satisfaction. The department's satisfaction of mortgage, the mortgage and mortgage note may not be released for a period of 3 weeks following receipt of final payment, unless final payment is received in the form of cash, bank draft bank money order, cashier's check, certified check, savings and loan or building and loan association check, credit union check, insurance check, finance company check, mortgage banker's check, or real estate broker's or attorney's trust account check.
VA 4.10(1)(1) False statement by applicant. Whenever it is determined that an applicant has obtained any department loan through fraud, misrepresentation, or through concealment of a material fact, the mortgage note may be accelerated and full payment demanded.
VA 4.10 History History: Cr. Register, May, 2000, No. 533, eff. 6-1-00.
VA 4.11 VA 4.11 Procedure for suspension of builders, authorized lenders and appraisers. Upon determination by the department that adequate cause exists for the suspension of a builder, authorized lender or appraiser from participation in the housing loan programs, the department shall do all of the following:
VA 4.11(2) (2)Notice of hearing. If a written request for a hearing filed with the department by the affected party meets the requirements of s. 227.42 (1) (a) to (d), Stats., and if the request is not denied by the department under s. 227.42 (2), Stats., the hearing granted by the department shall be treated as a "class 3 proceeding" as defined in s. 227.01 (3) (c), Stats., and written notice complying with s. 227.44 (2), Stats., shall be sent to the affected party by certified mail, return receipt requested, at least 10 days prior to the date of hearing.
VA 4.11(7) (7)Appeal to board.
VA 4.11(7)(a)(a) Upon the denial of a petition for rehearing by the department, an affected party may appeal to the board of veterans affairs within 20 days. The board of veterans affairs shall hear and act upon the appeal within 60 days after submission. If the affected party which is aggrieved by the final decision of the department does not appeal to the board of veterans affairs, the party is deemed to have exhausted all administrative remedies.
VA 4.11(7)(b) (b) If the affected party which is aggrieved by the final decision in the department exercises the option to appeal to the board of veterans affairs and the appeal is denied by the board of veterans affairs, the affected party is deemed to have exhausted all administrative remedies.
VA 4.12 VA 4.12 Omissions and material errors as grounds for suspension of authorized lenders.
VA 4.12(1) (1) Grounds for suspension. The department may suspend any authorized lender who makes excessive omissions or material errors on loan application packages the authorized lender submits to the department. An error is material if it prevents, or would prevent if the loan application package were not subsequently withdrawn, the correct processing to final determination of the loan application package as submitted. A loan application package is any loan application together with all supporting documents required by the department which is submitted to the department for processing, whether or not the loan application package is subsequently withdrawn before final determination by the department. For purposes of this section, an appeal of a loan denial is a new and separate loan application package.
VA 4.12(3) (3)Procedure for suspension. If the secretary determines that an authorized lender, who has been given notice pursuant to sub. (2), has made excessive accumulated omissions and material errors on loan application packages it has submitted after receiving the notice, the secretary may give notice to the lender that the lender is temporarily suspended from originating primary housing loans. The notice of temporary suspension shall be sent by certified mail, return receipt requested. The notice of temporary suspension is effective 5 days after it is mailed, except for applications which the authorized lender commenced processing prior to the effective date of the temporary suspension. The notice of temporary suspension shall also contain notice of a hearing on indefinite suspension from participation in the primary housing loan program. The hearing shall be treated as a "class 3 proceedings" defined in s. 227.01 (3) (c), Stats. The hearing shall be conducted pursuant to s. VA 4.11 (3). The temporary suspension shall be effective until a final decision is reached following the hearing, pursuant to s. VA 4.11 (4). A party aggrieved by a final decision may petition for rehearing pursuant to s. VA 4.11 (5) and (6), and may appeal to the board of veterans affairs pursuant to s. VA 4.11 (7).
VA 4.12 History History: Cr. Register, May, 2000, No. 533, eff. 6-1-00.
VA 4.13 VA 4.13 Primary loan forbearance.
VA 4.13(1) (1) Definitions. In this section the following terms shall have the meanings designated:
VA 4.13(3) (3)Request for forbearance. A written request for forbearance shall be submitted to the department by a primary loan mortgagor through the authorized lender servicing the loan. This request shall set forth the anticipated duration of the delinquency, the terms under which the delinquency will be repaid and the reasons for the delinquency. If the mortgagor receives rental income from the property mortgaged to the department, the mortgagor must agree in writing to assign this rental income to the department to be applied toward primary loan payments due until the loan is brought current. Full written financial disclosure may be required of a mortgagor in any case where the authorized lender or the department determines that the disclosure is necessary to enable the department to make a determination on the mortgagor's request for forbearance. Failure of the mortgagor to provide the disclosure in a timely manner are grounds for denial of forbearance.
VA 4.13(7) (7)Failure to keep agreement. If the mortgagor fails to make payments required by the agreement and the department determines that modification of the agreement is not warranted, the department may notify the mortgagor that the agreement has been terminated and accelerate the primary loan balance.
VA 4.13 History History: Cr. Register, May, 2000, No. 533, eff. 6-1-00.
VA 4.14 VA 4.14 Home improvement loan program.
VA 4.14(1)(1) Application. This section applies only to the program under s. 45.34 (1) (c), Stats. This section applies in conjunction with other provisions of this chapter, except that the provisions of s. VA 4.03 (3) do not apply to this section. This section supercedes any inconsistent provision of this chapter with respect to the program under s. 45.34 (1) (c), Stats.
VA 4.14(2) (2)Definitions. In this subsection:
VA 4.14(2)(a) (a) "Date of application" means the date a complete loan application with supporting documents is received by the department.
VA 4.14(2)(b) (b) "Loan" means a home improvement loan as authorized by s. 45.34 (1) (c), Stats., for the purpose of this subchapter.
VA 4.14 Note Note: It is the intent of the department to use 1/12 of the annual housing expense rather than monthly as sub. (2) (c) reads.
VA 4.14(3) (3)Application requirements.
VA 4.14(3)(c)2. 2. A copy of the prior year's income tax returns except if the applicant's employer, type of employment or method of compensation has changed. Applicants verifying their income by the prior year's income tax returns shall submit a complete copy of the state and federal tax return including all schedules, W-2s, and attachments.
VA 4.14(3)(c)5. 5. A profit and loss statement for at least 6 of the 12 months immediately preceding the loan application date of the income of a self employed applicant.
VA 4.14(3)(d) (d) All loans shall be amortized on a monthly basis and the term of the loan shall be at least 1 year and may not exceed 15 years. The department may set loan amortization terms based upon the loan amount.
VA 4.14(4) (4)Security required.
VA 4.14(4)(a)(a) Guarantors. The department may accept as adequate security the guarantee of home improvement loan program loan promissory notes by creditworthy and financially acceptable guarantors who are not the spouse of the applicant and who are Wisconsin residents. Guarantors are subject to the same underwriting criteria as the applicant and the department may request verification of information submitted. There must be at least 1 guarantor on guaranteed home improvement loan promissory notes. No employee of the department, no county veterans service officer and no other person in any way connected with the administrative duties of the department or serving in an advisory capacity thereto may be accepted as guarantor on any loan unless the applicant is a member of the guarantor's immediate family. Any other Wisconsin resident who is determined by the department to be financially responsible and whose joining in the obligation provides adequate security may be accepted as a guarantor.
VA 4.14(4)(b) (b) Real estate security. The department may accept the primary residence of the applicant as security if the applicant presents evidence of at least 10% equity therein after the home improvement loan program loan has been made. Possession of merchantable title to the primary residence by the applicant is required. If the title to the primary residence is held in more than one name, all parties with an interest in the real estate shall sign the mortgage.
VA 4.14(4)(c) (c) Appraisals.
VA 4.14(4)(c)2. 2. If the applicant submits an appraisal the appraisal is advisory only. The department may consider age of the appraisal, equity established by the appraisal, condition of the property or market value established by the appraisal in evaluating the appraisal submitted. The department may determine the value of properties for its purposes by means of property inspection by department representatives, by obtaining appraisal reports at its own expense, or by such other means as it may deem practical.
Published under authority of s. 35.93, Stats. Updated on the first day of each month. Entire code is alwaycurrent. The date shown on each chapter is the date the chapter was last published.