38 CFR 36.4307 - Interest rate reduction refinancing loan.

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There are 2 Updates appearing in the Federal Register for 38 CFR 36. View below or at eCFR (GPOAccess)
§ 36.4307 Interest rate reduction refinancing loan.
(a) Pursuant to 38 U.S.C. 3710(a)(8), (a)(9)(B)(i), and (a)(11), a veteran may refinance an existing VA guaranteed, insured, or direct loan to reduce the interest rate payable on the existing loan provided that all of the following requirements are met:
(1) The new loan must be secured by the same dwelling or farm residence as the loan being refinanced.
(2) The veteran owns the dwelling or farm residence securing the loan and
(i) Occupies the dwelling or residence as his or her home; or
(ii) Previously occupied the dwelling or residence as his or her home and certifies, in such form as the Secretary shall require, that he or she has previously occupied the dwelling or residence as a home; or
(iii) In a case in which the veteran is or was unable to occupy the residence or dwelling as a home because the veteran was on active duty status as a member of the Armed Forces, the spouse of the veteran occupies, or previously occupied, the dwelling or residence as the spouse's home and certifies to that occupancy in such form as the Secretary shall require.
(3) The monthly principal and interest payment on the new loan is lower than the principal and interest payment on the loan being refinanced; or the term of the new loan is shorter than the term of the loan being refinanced; or the new loan is a fixed-rate loan that refinances a VA-guaranteed adjustable rate mortgage; or the increase in the monthly payments on the loan results from the inclusion of energy efficient improvements, as provided by § 36.4339(a)(4); or the Secretary approves the loan in advance after determining that the new loan is necessary to prevent imminent foreclosure and the veteran qualifies for the new loan under the credit standards contained in § 36.4340.
(4) The amount of the refinancing loan does not exceed:
(i) An amount equal to the balance of the loan being refinanced, which is not delinquent, except as provided in paragraph (a)(5) of this section, plus closing costs authorized by § 36.4313(d) and a discount not to exceed 2 percent of the loan amount; or
(ii) In the case of a loan to refinance an existing VA-guaranteed or direct loan and to improve the dwelling securing such loan through energy efficient improvements, the amount referred to with respect to the loan under paragraph (a)(4)(i) of this section, plus the amount authorized by § 36.4339(a)(4).
(Authority: 38 U.S.C. 3703, 3710)
(5) If the loan being refinanced is delinquent (delinquent means that a scheduled monthly payment of principal and interest is more than 30 days past due), the new loan will be guaranteed only if the Secretary approves it in advance after determining that the borrower, through the lender, has provided reasons for the loan deficiency, has provided information to establish that the cause of the delinquency has been corrected, and qualifies for the loan under the credit standards contained in § 36.4340. In such cases, the term “balance of the loan being refinanced” shall include any past due installments, plus allowable late charges.
(6) The dollar amount of guaranty on the 38 U.S.C. 3710(a)(8) or (a)(9)(B)(i) loan does not exceed the greater of the original guaranty amount of the loan being refinanced or 25 percent of the new loan.
(7) The term of the refinancing loan (38 U.S.C. 3710(a)(8)) may not exceed the original term of the loan being refinanced plus ten years, or the maximum loan term allowed under 38 U.S.C. 3703(d)(1), whichever is less. For manufactured home loans that were previously guaranteed under 38 U.S.C. 3712, the loan term, if being refinanced under 38 U.S.C. 3710(a)(9)(B)(i), may exceed the original term of the loan but may not exceed the maximum loan term allowed under 38 U.S.C. 3703(d)(1).
(b) Notwithstanding any other regulatory provision, the interest rate reduction refinancing loan may be guaranteed without regard to the amount of guaranty entitlement available for use by the veteran, and the amount of the veteran's remaining guaranty entitlement, if any, shall not be charged for an interest rate reduction refinancing loan. The interest rate reduction refinancing loan will be guaranteed with the lesser of the entitlement used by the veteran to obtain the loan being refinanced or the amount of the guaranty as calculated under § 36.4302(a). The veteran's loan guaranty entitlement originally used for a purpose as enumerated in 38 U.S.C. 3710(a)(1) through (7) and (a)(9)(A)(i) and (ii) and subsequently transferred to an interest rate reduction refinancing loan (38 U.S.C. 3710(a)(8) or (a)(9)(B)(i)) shall be eligible for restoration when the interest rate reduction refinancing loan or subsequent interest rate reduction refinancing loans on the same property meets the requirements of § 36.4302(h).
(Authority: 38 U.S.C. 3703(a))
(c) Title to the estate which is refinanced for the purpose of an interest rate reduction must be in conformity with § 36.4354.
(Authority: 38 U.S.C. 3710(a)(8), (a)(9)(B)(i) and (e))
(The Office of Management and Budget has approved the information collection requirements in this section under control number 2900-0601)
[73 FR 6310, Feb. 1, 2008. Redesignated at 75 FR 33705, June 15, 2010, as amended at 75 FR 65238, Oct. 22, 2010]

Title 38 published on 2013-07-01

The following are only the Rules published in the Federal Register after the published date of Title 38.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-05-09; vol. 79 # 90 - Friday, May 9, 2014
    1. 79 FR 26620 - Loan Guaranty: Ability-To-Repay Standards and Qualified Mortgage Definition Under the Truth in Lending Act
      GPO FDSys XML | Text
      DEPARTMENT OF VETERANS AFFAIRS
      Interim final rule.
      Effective Date: This interim final rule is effective May 9, 2014. Comment Date: Comments must be received on or before June 9, 2014. While the standard comment period is 60 days, in order for VA to provide thorough responses to all comments and publish the final regulation as soon as possible with a target date of within 90 days of the publication of this interim final rule, we are limiting the period for comments to 30 days. VA believes it is important to publish the final rule soon because of the certainty the final rule will provide veterans and lenders. See below for further explanation.
      38 CFR Part 36

Title 38 published on 2013-07-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 38 CFR 36 after this date.

  • 2014-05-09; vol. 79 # 90 - Friday, May 9, 2014
    1. 79 FR 26620 - Loan Guaranty: Ability-To-Repay Standards and Qualified Mortgage Definition Under the Truth in Lending Act
      GPO FDSys XML | Text
      DEPARTMENT OF VETERANS AFFAIRS
      Interim final rule.
      Effective Date: This interim final rule is effective May 9, 2014. Comment Date: Comments must be received on or before June 9, 2014. While the standard comment period is 60 days, in order for VA to provide thorough responses to all comments and publish the final regulation as soon as possible with a target date of within 90 days of the publication of this interim final rule, we are limiting the period for comments to 30 days. VA believes it is important to publish the final rule soon because of the certainty the final rule will provide veterans and lenders. See below for further explanation.
      38 CFR Part 36