Announcement 2019-090: VA Handbook Updates - Chapters 9 and 12

Effective immediately, VA has updated Chapter 9, Legal Instruments, Liens, Escrows and Related Issues, and Chapter 12, Minimum Property Requirements. They have been revised to reflect updates to VA systems and incorporate all appropriate Circulars.

chapter 9, legal instruments, liens, escrows and related issues

Key changes include:

  • Topic 2 states that the Escape Clause must be contained in the sales contract for all VA-guaranteed loans.
  • Topic 3 describes the requirements under which a beneficial interest in a revocable Family Living Trust will be acceptable to VA.
  • Topic 3 requires that an individual taking title to a property must sign either the mortgage note or a mortgage deed of trust.
  • Topic 8 includes a certification that lenders must provide after verifying the Veteran's status.
  • Topic 8 confirms that digital signatures are acceptable in accordance with the Electronic Signatures in Global and National Commerce Act, commonly referred to as the E-sign Act.
  • Topic 10 raises the estimated cost of postponed improvements which may be completed without funds being escrowed from $500 to $2,500.


chapter 12, minimum property requirements

Key changes include:

  • Topic 1 has been revised to add information about including detached improvements in the appraised value.
  • Topic 2 has been revised to specify that if more than one parcel is included in the appraisal the appraiser must prepare the appraisal subject to the parcels being placed on one deed.
  • Topic 7 has been revised to update the description of hairline cracks.
  • Topic 8 has been revised to specify that based on the appraiser's knowledge of the market area, properties that are subject to regular flooding are not eligible, whether or not the area has been designated a Special Flood Hazard Area (SFHA).
  • Topic 21 has been revised to specify that the integrity of the envelope of the structure must not be compromised.
  • Topic 34 has been revised to specify that radon resistant construction techniques are considered to be applicable for properties located in Radon Zone 1 as designated by the Environmental Protection Agency (EPA).

Please reference the product profiles for full details.