VA Lender Handbook M26-7 Chapter 3 — The VA Loan and Guaranty

va-m26-7-ch03

VA Pamphlet 26-7 Chapter 3 governs the basic elements of a VA-guaranteed loan including occupancy, amortization, and records.

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source:
  type: regulation
  id: va-m26-7-ch03
  authority: VA Lender Handbook M26-7 Chapter 3 — The VA Loan and Guaranty
  description: |
    VA Pamphlet 26-7 Chapter 3 governs the basic elements of a
    VA-guaranteed loan including occupancy, amortization, and records.
  effective_date: '2012-11-08'
obligations:
  - id: va-m26-7-ch03-occupancy-reasonable-time
    canonical_id: va-m26-7-ch03-occupancy-reasonable-time
    section: VA M26-7 Ch. 3, Topic 5, Subsection b — What is a "Reasonable Time?"
    description: |
      [LENDER] must apply VA's "reasonable time" occupancy standard, which
      means within 60 days after the loan closing, when reviewing the
      Veteran's occupancy certification. More than 60 days may be
      considered reasonable only if (i) the Veteran certifies a specific
      future occupancy date and (ii) a particular future event makes that
      occupancy possible. Occupancy beyond 12 months after loan closing
      generally cannot be considered reasonable by VA.
    type: do
    audit_question: For every non-IRRRL VA loan, can [LENDER] evidence that the Veteran's occupancy certification was reviewed against the 60-day "reasonable time" standard, that any longer period is supported by a specific-future-date certification AND a particular future event, and that no certification beyond 12 months after loan closing was accepted as reasonable absent specific VA approval?
    program_review: Does the program account for the 'reasonable time' occupancy standard and its exceptions — generally 60 days after closing; longer only with a specific-future-date certification AND a particular enabling future event; and not beyond 12 months absent specific VA approval?
    file_review: Spot-check non-IRRRL files; confirm the occupancy certification meets the 60-day standard or a documented exception. The officer judges whether a longer-than-60-day certification is reasonable on the stated facts.
    judgment: true
    feeds: []
    workflow_phase: origination
    owner_role: loan_officer
    secondary_owner_role: underwriter
    cadence: per_loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - va
      - m26-7
      - ch03
      - occupancy
      - reasonable-time
      - promoted
    primary_source:
      tier: 1
      authority: VA Lender Handbook M26-7 Chapter 3 — The VA Loan and Guaranty
      source_class: va-handbook-m26-7
      source_url: https://benefits.va.gov/WARMS/M26_7.asp
      snapshot_id: 73e5d344e2743889
      fetched_at: '2026-05-23T01:50:00Z'
      content_hash: sha256:b452379ce6dbdb528896ce1d9ac9ca8a9cf03b5fab6fa9af7766dc2dc17c2bbe
      paragraph_quote: 'closing. More than 60 days may be considered reasonable if both of the following conditions are met: • the veteran certifies that he or she will personally occupy the property as his or her home at a specific date after loan closing, and • there is a particular future event that will make it possible for the veteran to personally occupy the property as his or her home on a specific future date.'
      drafter_attestation: Copied verbatim from VA Handbook snapshot 73e5d344e2743889 (M26-7 Ch. 3, Topic 5b — Reasonable Time) at 2026-05-23. Source PDF retrieved via Wayback Machine.
      quote_healed: true
      effective_date: '2012-11-08'
      effective_date_source: va-change-date-preceding
    promoted_at: '2026-05-23T02:01:05+00:00'
    promoted_from: va-m26-7-ch03-roundb-v1.yaml
  - id: va-m26-7-ch03-amortization-final-installment
    canonical_id: va-m26-7-ch03-amortization-final-installment
    section: VA M26-7 Ch. 3, Topic 1 — Basic Elements / Amortization Rules
    description: |
      For amortized VA loans, [LENDER] must ensure that payments are
      approximately equal, that principal is reduced at least once
      annually, and that the final installment does not exceed two times
      the average of the preceding installments (subject to specified
      exceptions for GPM, GEM, prior-approved alternative amortization,
      and construction loans).
    type: do
    audit_question: For every amortized VA loan [LENDER] originated (excluding GPM, GEM, prior-approved alternative amortization, and construction loans), can [LENDER] evidence that scheduled payments are approximately equal, principal is reduced at least once annually, and the final installment does not exceed two times the average of the preceding installments?
    program_review: Does the program ensure amortized VA loans (excluding GPM, GEM, prior-approved alternative amortization, and construction loans) have approximately equal payments, at least annual principal reduction, and a final installment within twice the average of preceding installments?
    file_review: Spot-check amortized files; confirm equal payments, annual principal reduction, and the final-installment cap.
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: underwriter
    secondary_owner_role: closer
    cadence: per_loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - va
      - m26-7
      - ch03
      - amortization
      - payment-structure
      - promoted
    primary_source:
      tier: 1
      authority: VA Lender Handbook M26-7 Chapter 3 — The VA Loan and Guaranty
      source_class: va-handbook-m26-7
      source_url: https://benefits.va.gov/WARMS/M26_7.asp
      snapshot_id: 73e5d344e2743889
      fetched_at: '2026-05-23T01:50:00Z'
      content_hash: sha256:b452379ce6dbdb528896ce1d9ac9ca8a9cf03b5fab6fa9af7766dc2dc17c2bbe
      paragraph_quote: '• the final installment must not exceed two times the average of the preceding '
      drafter_attestation: Copied verbatim from VA Handbook snapshot 73e5d344e2743889 (M26-7 Ch. 3, Topic 1 — Amortization) at 2026-05-23. Source PDF retrieved via Wayback Machine.
      effective_date: '2012-11-08'
      effective_date_source: va-change-date-preceding
    promoted_at: '2026-05-23T02:01:05+00:00'
    promoted_from: va-m26-7-ch03-roundb-v1.yaml
  - id: va-m26-7-ch03-maintain-origination-records
    canonical_id: va-m26-7-ch03-maintain-origination-records
    section: VA M26-7 Ch. 3 — Maintenance of Loan Records
    description: |
      [LENDER] must maintain copies of all loan origination records on
      VA-guaranteed home loans for at least 2 years from the date of loan
      closing, and even if the loan is sold, the original lender must
      maintain these records (or legible copies) for the required period.
    type: maintain
    audit_question: For every VA-guaranteed home loan [LENDER] originated, can [LENDER] evidence retention of complete loan origination records (loan application, verifications of employment and deposit, credit reports, sales contracts, appraisal and compliance inspection reports, closing papers, etc.) for at least 2 years from the date of loan closing, including for loans subsequently sold?
    program_review: Does the program retain copies of all loan-origination records (application, VOE/VOD, credit reports, sales contracts, appraisal and compliance inspection reports, closing papers) for at least 2 years from closing, including for loans subsequently sold?
    file_review: Spot-check originated (and sold) loans; confirm complete origination-record copies retained for the 2-year minimum.
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: compliance_officer
    secondary_owner_role: closer
    cadence: continuous
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - va
      - m26-7
      - ch03
      - recordkeeping
      - promoted
    primary_source:
      tier: 1
      authority: VA Lender Handbook M26-7 Chapter 3 — The VA Loan and Guaranty
      source_class: va-handbook-m26-7
      source_url: https://benefits.va.gov/WARMS/M26_7.asp
      snapshot_id: 73e5d344e2743889
      fetched_at: '2026-05-23T01:50:00Z'
      content_hash: sha256:b452379ce6dbdb528896ce1d9ac9ca8a9cf03b5fab6fa9af7766dc2dc17c2bbe
      paragraph_quote: Lenders must maintain copies of all loan origination records on VA-guaranteed home loans for at least 2 years from the date of loan closing.
      drafter_attestation: Copied verbatim from VA Handbook snapshot 73e5d344e2743889 (M26-7 Ch. 3 — Maintenance of Loan Records) at 2026-05-23. Source PDF retrieved via Wayback Machine.
      quote_healed: true
      effective_date: '2012-11-08'
      effective_date_source: va-change-date-preceding
    promoted_at: '2026-05-23T02:01:05+00:00'
    promoted_from: va-m26-7-ch03-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-23T02:01:05+00:00'
    candidate_path: obligations\_remediation\_round_b_drafts\va-m26-7-ch03-roundb-v1.yaml
    candidates_promoted: 3
    candidates_skipped_existing: 0

Verbatim regulatory text (3)

Verbatim provisions from VA Lender Handbook M26-7 Chapter 3 — The VA Loan and Guaranty — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

VA M26-7 Ch. 3, Topic 5, Subsection b — What is a "Reasonable Time?"

Effective 2012-11-08 · VA Change Date for this topic

closing. More than 60 days may be considered reasonable if both of the following conditions are met: • the veteran certifies that he or she will personally occupy the property as his or her home at a specific date after loan closing, and • there is a particular future event that will make it possible for the veteran to personally occupy the property as his or her home on a specific future date.

Source: VA Lender Handbook M26-7 Chapter 3 — The VA Loan and Guaranty · source URL · snapshot 73e5d344e2743889

VA M26-7 Ch. 3, Topic 1 — Basic Elements / Amortization Rules

Effective 2012-11-08 · VA Change Date for this topic

• the final installment must not exceed two times the average of the preceding

Source: VA Lender Handbook M26-7 Chapter 3 — The VA Loan and Guaranty · source URL · snapshot 73e5d344e2743889

VA M26-7 Ch. 3 — Maintenance of Loan Records

Effective 2012-11-08 · VA Change Date for this topic

Lenders must maintain copies of all loan origination records on VA-guaranteed home loans for at least 2 years from the date of loan closing.

Source: VA Lender Handbook M26-7 Chapter 3 — The VA Loan and Guaranty · source URL · snapshot 73e5d344e2743889

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Operationalizing VA Lender Handbook M26-7 Chapter 3 — The VA Loan and Guaranty

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Source of record: https://claudeforcompliance.com/regs/va-m26-7-ch03/ · register va-m26-7-ch03 · Claude for Compliance. Free to read and download; see regulatory updates and methodology.