VA Updates

The VA has completely revamped their mortgage lending and appraisal guideline handbook and there is one change that should be noted that will affect ALL VA purchases.

Each buy sell agreement, drafted where the financing is for a VA loan, MUST contain the VA escape clause language. If the VA escape clause is not contained in the buy sell agreement received by the VA approved appraiser it will likely delay the financing and closing process. Below you will find the exact language required by the VA to be placed in the buy sell agreement and the directive to the VA appraiser in the newly revised handbook.

'It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest money or otherwise or be obligated to complete the purchase of the property described herein, if the contract purchase price or cost exceeds the reasonable value of the property established by the Department of Veterans Affairs. The purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value established by the Department of Veterans Affairs. (Authority: 38 U.S.C. 501, 3703(c)(1))”

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