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U.S. DOD Form dod-va-26-8978 DEPARTMENT OF VETERANS AFFAIRS RIGHTS OF VA LOAN BORROWERS IMPORTANT NOTICE You have certain basic rights as a VA loan borrower that you should know about. These include Assumable Loan* For all VA Loans committed on or after March 1 1988 you may sell your home to someone who agrees to assume your loan if the loan holder or VA approves the creditworthiness of the purchaser s. If the purchaser s is creditworthy and assumes the liability to the lender and VA to the same extent that you did when you obtained the loan you will be released from liability on the loan* To obtain a release from liability you should check with the company to whom you make your payments before you sell your home. The loan may becxome immediately due and payable if you do not obtain approval of the loan assumption before selling your home. Keep in mind that you will not be able to get another VA loan with the entitlement that you used for this loan until the property is sold and the loan is paid in full unless the purchaser is a veteran and can qualify for substitution of entitlement. The local VA office can provide you with details concerning substitution of entitlement. No Prepayment Penalty. If you pay off your loan early your lender cannot require that you pay a prepayment penalty. No Late Charge Unless Payment Is More Than 15 Days Overdue. Also late charge may not exceed 4 percent of payment amount. These rights apply to you and if you sell your home to any buyer who assurmes your loan* Some mortgage notes used by lenders may have provisions which seem to take away these rights. However the lender cannot enforce these provisions for a VA loan* Your loan is guaranteed or insured under Title 38 United States Code. The law and regulations that are in effect on the date your loan is closed govern the rights duties and liabilities of you and the lender. Any provision of any instrument executed in connection with your loan which is inconsistent with the law or the regulations is invalid* If your loan has been funded by a State or local housing program these basic rights may not apply to you. If you are a participant in this type of program you should receive a notice stating the restrictions that apply to your loan* If you believe your rights as a VA loan borrower are being violated by the lender or if you have any questions about your loan which the lender cannot answer to your satisfaction please contact the local VA office for assistance. These include Assumable Loan* For all VA Loans committed on or after March 1 1988 you may sell your home to someone who agrees to assume your loan if the loan holder or VA approves the creditworthiness of the purchaser s. If the purchaser s is creditworthy and assumes the liability to the lender and VA to the same extent that you did when you obtained the loan you will be released from liability on the loan* To obtain a release from liability you should check with the company to whom you make your payments before you sell your home.

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