do we have any restrictions on our CES loans for going behind a VA loan?
None of the available CES programs explicitly prohibit a VA first lien. Each lender defines ineligibility by specific structural features or performance history — a standard, current, fully amortizing VA mortgage would not trigger any of those disqualifiers.
Guideline Requirements by Lender
Greenbox Loans — CES (Full/Alt Doc)
Ineligible senior lien features per Section 11 :
- Forbearance, modifications, or deferrals completed or reinstated within 12 months of the Note date; loans in active forbearance or deferment
- Negative amortization, including loans with Paid-In-Kind (PIK) features
- Balloon payments becoming due during the amortization period of the new 2nd lien
- Cross-collateralized/blanket mortgages; first lien HELOCs; notes with a default interest rate greater than the Note rate; reverse mortgages
Lien position: "The new loan must be a valid second lien. All other junior debt must be satisfied to ensure no third or fourth lien positions exist."
Continuity of obligation: "At least one borrower who is legally obligated on the senior (first) lien must also be a signed borrower on the new second lien."
VA is not listed as an ineligible first-lien type.
JMAC Lending — CES (Zuma Prime)
Ineligible senior lien features :
- Forbearance, modifications, or deferrals completed or reinstated within 12 months; loans in active forbearance or deferment
- Negative amortization (including PIK features); balloon payments becoming due during the amortization period
- Reverse mortgages; first lien HELOCs; cross-collateralized loans; notes with a default interest rate greater than the Note rate
- Private party mortgages / loans not reporting on credit
The first lien must be reporting on the credit report — a servicer-reported VA mortgage satisfies this. VA is not listed as an ineligible type.
AmWest Funding Corp. — CES (Full Doc & Alt Doc)
Full Doc unallowable first mortgage types :
- Interest Only terms; negative amortization payment terms; balloon terms
- Land contracts or contracts for deed; reverse mortgages; HELOCs or any other future advance liens
Alt Doc additional restrictions :
- Loans in active forbearance or deferment; balloon with less than 3 years remaining
- Reverse mortgages; private mortgages opened within the past 12 months
VA is not listed as an ineligible type under either program.
Forward Lending — CES
Ineligible first lien types per the Product Restrictions 1st Liens – Standalone Close table :
- All Affordable Purchase, Refi & DPA programs (HomeStyle, FHA, Refi Now, HomeReady, etc.)
- ARMs (Select only); balloon notes; construction loans; cross-collateralized loans; HELOCs
- Land trusts; loans in forbearance; negative amortization; private mortgages
- Renovation loans; reverse mortgages; assumable loans
Note: FHA is explicitly named as ineligible. There is no blanket "government loan" prohibition — exclusions are named specifically. VA is not listed and VA borrowers are eligible.
Nations Direct Mortgage — CES
Ineligible senior lien features :
- No forbearance, repayment plans, or deferred balances in the last 7 years; modification from original loan terms
- Negative amortization; first mortgages not reporting on credit; reverse mortgages
- Terms greater than 30 years; first lien HELOC; land contract, construction loan, lease option, renovation loan, temporary buydowns
- Loans with a balloon feature; private party loans
VA is not listed as an ineligible type. Note the forbearance lookback here is 7 years — stricter than other lenders.
Eligibility Summary by Lender
| Lender | VA First Lien Prohibited? | Key Conditions to Verify |
|---|---|---|
| Greenbox | No | No forbearance/mod within 12 mos; reporting on credit; continuity of obligation |
| JMAC Lending | No | Reporting on credit; no forbearance/mod within 12 mos; continuity of obligation |
| AmWest (Full & Alt Doc) | No | No IO, balloon, neg-am, or forbearance |
| Forward Lending | No | VA not named; FHA explicitly excluded |
| Nations Direct | No | No forbearance/repayment plan in last 7 years; must report on credit |
Conditions to Confirm on Every VA First Lien File
- Forbearance / modification history — no active or recent forbearance, deferment, or modification (12-month lookback for most lenders; 7-year lookback for Nations Direct Mortgage)
- Credit reporting — VA first lien must be reporting on credit (critical for JMAC and Nations Direct Mortgage; private or unreported liens are ineligible)
- Continuity of obligation — at least one borrower on the VA first lien must also appear on the CES (required by Greenbox and JMAC)
- Loan structure — confirm no balloon, negative amortization, IO terms, or default interest rate above the Note rate
I was unable to find any explicit guideline in the available materials that prohibits a VA loan from serving as the senior lien behind a CES.
