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Topic 8. Maturity
April 10, 2009
This section has been updated to correct hyperlinks and make minor grammatical edits.
a. Maximum Maturity
Amortized loans: 30 years and 32 days,
Nonamortized loans: 5 years.
In addition, every loan must be repayable within the estimated economic life of the property securing the loan.
The period for repayment of a loan is measured from the date of the note or other evidence of indebtedness.
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b. Maturity Extending Beyond the Maximum
VA regulations provide that any amounts, which fall due beyond the maximum maturity automatically, fall due on the maximum maturity date.
Thus, if a lender inadvertently makes a loan that exceeds the maximum maturity, it may still be subject to guaranty.
However, the regulations also limit the amount that can be collected as a final installment, such as, they prohibit excessive ballooning. The holder of a loan that violates this provision may desire to correct the situation through means which are legally proper in the jurisdiction.