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RULE §177.12Assumptions

(a) A loan under this program may be assumed after obtaining approval of the board and the participating lending institution in writing and by complying with the following requirements.

  (1) The original veteran borrower must have occupied the home as a principal residence for at least three years from the date of purchase.

  (2) All mature interest, principal, and taxes must have been paid.

  (3) The party wishing to assume the loan must meet the qualification requirements of the participating lending institution.

  (4) The assumption agreement must be on forms approved by the administrator and the board and must be executed by the chairman of the board.

(b) The board may in its discretion waive the requirement that the original veteran occupy the home as a principal residence for three consecutive years if it deems a waiver to be in the best interests of the program or upon receiving and approving evidence of one of the following circumstances:

  (1) death of the veteran purchaser;

  (2) bankruptcy of the veteran purchaser;

  (3) financial incapacity of the veteran purchaser; or

  (4) forced sale of the home due to:

    (A) divorce and property settlement;

    (B) move required by change in the employment of the veteran or veteran's spouse;

    (C) condemnation of the property through no fault of the veteran.

(c) The board may prescribe any forms or methods by which the required evidence shall be submitted to the board. If the veteran shall attempt to violate the three-year limitation on assignments, the board may accelerate all principal and interest on the loan. The board, in its discretion, may adopt any other remedy it deems appropriate. The participating lending institution and the administrator shall monitor to the extent practically possible each loan during its first three years to determine if a violation of the three-year limitation on assumptions or residence occurs.

(d) The veteran shall not make any other attempt to sell, convey, rent, or lease the property purchased under this program except in the manner prescribed in these rules and the Natural Resources Code, Chapter 162. Any attempt to sell, assign, transfer, convey, rent, or lease the property purchased under this program without the express written approval of the board shall be deemed a violation of these rules and the Veterans Housing Assistance Act and will be subject to the provisions of the Natural Resources Code, §162.016(d).

Source Note: The provisions of this §177.12 adopted to be effective May 4, 1984, 9 TexReg 2263.

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