VA Updates Lender Guidance for Borrowers Affected Financially by COVID-19

The VA has issued an update to Circular 26-20-10 which provides guidance to lenders regarding borrowers affected financially by the COVID-19 national emergency.  The update extends the rescission date of the circular from April 1, 2022, to July 1, 2023.

By way of background, the VA had previously issued Circular 26-20-10 to provide temporary guidance relating to VA home loan borrowers affected by COVID-19 and it describes temporary measures regarding loan origination, closing, and guaranty.  In particular, Circular 26-10-10 provides guidance related to: (i) income verification; (ii) loan underwriting; (iii) electronic mortgages, electronic notes and the use of allonges; (iv) lien positions; and (v) the timeline to request evidence of guaranty.

Note that the rescission date of Circular 26-20-10 was previously changed from April 1, 2021, to April 1, 2022.