Closing Procedures for Disaster Designated Areas (Hurricane)
To: VHDA Originating Lenders
Date: September 29, 2003
In an effort protect our customers and VHDA's security interest and to expedite loan closings, the following procedures have been established for closings on properties located in areas affected by the recent Hurricane. These safeguards have been established based on concern for our customers and response to conditions in these market areas. These procedures are to be implemented immediately for all loans scheduled to close on properties located in designated disaster areas as determined by Federal Emergency Management Agency (FEMA). http://www.fema.gov
These procedures apply to all areas identified on FEMA's web page "FEMA Declared for Virginia Hurricane Isabel" dated September 18, 2003. Click here to view a map of the designated areas.
All loans schedule to close on properties located in these designated disaster areas with appraisals dated on or before September 18, 2003 must following the procedures listed below.
A "Borrower Certification Regarding Property Condition" must be executed prior to loan closing on all properties located in these designated areas regardless of the existence of damage. This certification ensures that the borrower has inspected the property subsequent to the hurricane and provides an acknowledgement and assessment of the condition. This certification is available via the link above.
Repair Requirements and Loan Closing:
Loan closing will not be allowed if there has been any damage to property improvements. All repairs to property improvements must be completed and a final inspection provided prior to closing. Escrow for minor repairs may be considered on a case-by-case basis. Please contact VHDA directly for consideration of these special cases.
Fallen or Uprooted Trees Only (with no property damage):
At the borrower's request, VHDA will allow loans to close with an escrow in situations where improvements have not been damaged, however tree removal has not been completed. VHDA will require no less than one estimate for removal of trees or other debris from a licensed contractor. VHDA will require escrow in the amount of the one and one half times the estimated costs. Lenders may use their standard escrow agreement. Escrows for up to 90 days will be allowed.
Reservation and Commitment Extension Request:
VHDA will consider extensions to both reservation and commitment periods based on difficulties related to the Hurricane disaster including delays due to office closings.
Any questions regarding these procedures or other related issues should be directed to Single Family Development at 804-782-1986.
Thank you for your cooperation and assistance as we all work through the problems related to this disaster. Please review this Lender "Updates and Announcements" page on our website regularly for revisions or changes which may occur or become necessary.