Back to VHDA Home
Helping Virginians Attain Quality, Affordable Housing
Follow VHDA LinkedIn Facebook YouTube RSS Feed Twitter VHDA Blog Instagram
Español | Text Size: A- A  A+ | Text Only | Print Print

Documentation Updates and Changes

Single Family Documentation Updates and Changes

To: VHDA Originating Lenders

Date: June 2, 2003

From: Sheila Pollard, Single Family Closing and Quality Review Manager

VHDA Single Family Documentation Updates and Changes

Forms on the Website:

Completed VHDA forms and documents can now be printed from the website by entering borrower and loan information directly onto the form or document. This capability is located at or, select Lending Partners on the menu, and then select the Forms and Documents option.

In Closing, the appropriate allonge to be attached to the Note on the Step Rate Loans will print with the Note. Appropriate Riders will print with Deeds of Trust. However, if PUD or Condo Riders are applicable, they will need to be pulled separately and attached to the Deeds of Trust.

Changes in Closing Requirements:

Surveys are only required on MRB, first time homebuyer, programs that are new construction. VHDA no longer requires a survey on existing construction, if the title insurance policy does not take exception to a survey. Originating agents must always comply with insurer’s requirements. The appraisal will be looked at with greater scrutiny to determine lot size, private road, well and septic, or other matters normally revealed on a survey.

Termite Inspection Reports on all structures within the boundaries of the property is required on existing construction. However, if the termite report reflects that only the house was inspected, we will not condition the loan for a more complete report. Originating Agents will be responsible for resolving any issues that may arise from accepting a report that does not include all structures within the boundaries of the property. Originating Agents must always comply with insurer’s requirements.

Well and Septic Inspection Reports are not required by VHDA on conventional loans if there is no documentation indicating problems, or requiring the inspection reports as a condition of the loan approval or appraisal. Originating Agents will be responsible for resolving any issues that may arise from not requiring a well or septic inspection report. Originating Agents must always comply with insurer’s requirements.

Tax Service Fee has increased to $55.00 on all loans serviced by VHDA. The increase is effective with reservations made on or after May 1, 2003.

Second Deeds of Trust: The General Assembly passed an amendment to Code Section 55-58.3 which provides for automatic subordination of second liens when the first lien is refinanced. Chapter 381, the amendment, provides an exception for loans by political subdivisions, such as VHDA, to low and moderate income persons and households. Therefore, effective with any VHDA Second Mortgage Loan (FHA Plus or HOME Stretch) closed on or after July 1, 2003, the following language must be on the first page of the Second Deed of Trust in bold and capitalized letters.

Notes and Deeds of Trust in Originating Agents Name:
Originating Agents may now close VHDA loans in their name with an immediate assignment of the Note and Deed of Trust to VHDA. If this procedure is preferred by Originating Agents, instructions are provided on the attached memorandum from Fred Bryant, Senior Legal Counsel with VHDA.


To: Originating Agents

From: VHDA

Date: 5/27/03

Re: Notes and Deeds of Trust in Originating Agent’s Name

This memorandum sets forth the circumstances in which VHDA Originating Agents may close a VHDA loan with the Originating Agent’s name in the Note and Deed of Trust and immediately assign the loan to VHDA (VHDA still funds the loan).

1. Note Endorsement. The post-closing package must contain the original note endorsed as follows:

Pay to the order of Virginia Housing Development Authority

Without Recourse

Lender’s Name

(Authorized Signature)

Name of Authorized Signer

Title of Authorized Signer

This endorsement “without recourse” will in no way affect the Originating Agreement’s repurchase obligations under the VHDA Originating Agreement. The endorsement must be on the Note rather than in a separate allonge. The endorsement must be signed only by individuals specifically authorized to execute documents on the Originating Agent’s behalf. Facsimile signatures are not permitted.

2. Assignment of Deed of Trust. The post-closing package must contain a copy of a certificate of transfer or assignment to be recorded simultaneously with the deed of trust. The original, stamped copy of this document must be forwarded to VHDA with the recorded deed of trust when returned from the clerk’s office. If the Originating Agent chooses not to use the certificate of transfer form drafted by VHDA, the mortgage assignment that it prepares must show the assignee as Virginia Housing Development Authority, a political subdivision of the Commonwealth of Virginia with an address of 601 S. Belvidere St. Richmond, VA 23220 and must not include a recitation that the assignment of the mortgage is “without recourse” because the loan repurchase requirements are still in effect. (See Fannie Mae form 3744 for example).

3. Costs of Assignment. The HUD 1 Settlement Statement may not contain any charge to the borrower for the recordation of the assignment. This fee must be absorbed by the Originating Agent.

4. Title Insurance. Since the assignment will be recorded simultaneously with the deed of trust, VHDA will continue to require that the title policy be in the name of VHDA and its successors and assigns.

5. Mortgage Insurance. If the original mortgage insurance or guarantee (including FHA, VA & RD) certificate will not be issued in the name of VHDA, the Originating Agent must complete the assignment portion of the insurance certificate to reflect the assignment to VHDA and file it with the insurer or guarantor. A copy of this completed document must be included in the post-closing package. The VHDA post-closer must subsequently receive such endorsed certificate.

6. Hazard Insurance. If VHDA will not be named as the mortgagee on the initial hazard insurance policy, the policy must insure the Originating Agent and “its successors and assigns”. The Originating Agent must notify the hazard insurance company of the assignment and the company must issue an endorsement listing VHDA as mortgagee. A copy of such notification must be included in the post-closing package with the original endorsement to follow.

7. Real Estate Taxes. If the Originating Agent has not previously provided the local real estate taxing authority with the contact information for the applicable VHDA servicer, the Originating Agent must do so immediately following closing and include a copy of such correspondence in the post-closing package.

Please contact the VHDA closing department with any questions concerning these requirements.

Contact Us

Homeownership Program Department

Toll free: 800-227-8432
Local: 804-783-6725
Homeownership Staff Directory

Customer Service

Toll Free: 877-VHDA-123
Local: 804-782-1986


Virginia Relay

In Virginia: 711
Toll Free: 800-828-1140


VHDA Fraud, Waste or Abuse Hotline

Phone: 804-915-3146
Website: Reporting Fraud, Waste or Abuse