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Topic 20. New Construction Sold by the Lender
March 11, 2019
This Chapter has been revised in its entirety.
a. Appraisal Request
If a lender acquires title to a newly constructed home due to a builder’s bankruptcy or cessation of business, the lender must order the appraisal as follows:
As "existing", not "new", construction, and
As "IND", not "LAPP", as properties sold by the lender are not eligible for processing under LAPP.
b. Documentation Required
The lender must:
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provide evidence of property ownership,
complete any repairs needed for the property to meet VA’s MPRs,
obtain a certificate of occupancy from the local authority, and
obtain the Veteran’s signed acknowledgement that "This property is being purchased as existing construction from a lender who acquired this new construction property from the builder. There is no warranty and VA will not provide assistance with any construction defects."