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Update to COVID-19 Forbearance Guidance

March 24,2021

Last year COVID-19 brought uncertainty to the mortgage market. In response, Virginia Housing provided relief to our lending partners related to loans in forbearance that required additional documentation and tightened timelines to reduce risk in purchasing loans in these uncertain economic times. Today we have good news! We are relaxing the two-day VVOE requirement to five business days. As a reminder, the complete list of required items is below. The Originating Lender is also responsible for meeting the requirements of the insurer or agency.

Effective immediately Virginia Housing has loosened its requirements to not consider a loan in forbearance as an early payment default where the following requirements are met:

  • Complete closed loan packages are delivered to Virginia Housing within 7 business days of the closing date of the mortgage loan.
  • The lender obtains a verbal verification of employment (VVOE) five business days prior to closing. This is in addition to all other employment and income documentation requirements of the agency and/or insurer. In cases where a borrower has experienced a reduction of income the lender must reassess the loan eligibility and provide documentation that the borrower qualifies based upon the reduced earnings.
  • COVID-19 Certification is executed by all borrowers at closing attesting that COVID-19 has not impacted the employment status of the borrower or the ability to make a mortgage loan payment in a timely manner. Lenders may continue using Borrower COVID-19 Certifications developed by their legal departments in lieu of Virginia Housing’s COVID-19 Certification as long as they meet the intent noted above.

Virginia Housing COVID-19 Attestation Click for Virginia Housing COVID-19 Attestation.

As this economic environment continues to unfold, Virginia Housing may find it necessary to amend the above procedures and will communicate that as early as possible. We appreciate your understanding and continued support as we collectively navigate these unprecedented times.

Should you have any questions or concerns, please feel free to contact Toni Ostrowski, Managing Director of Homeownership.