source:
  type: guide
  id: va-m26-7-ch09-t01
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 9, Topic 1 — Security
    Instruments
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 9, Topic 1 — Security
    Instruments.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch09-t01-full
  canonical_id: va-m26-7-ch09-t01-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 9, Topic 1 — Security Instruments
  type: do
  tags:
  - regulator-direct
  - va
  - va-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 9, Topic 1 — Security
      Instruments
    source_class: va-handbook
    source_url: https://www.benefits.va.gov/warms/pam26_7.asp
    snapshot_id: 23782f6842a5daf5
    fetched_at: '2026-05-23T01:53:53Z'
    content_hash: sha256:b7c7fcb001b1097e51e4479c70f74c0d981cc1a7a38109e8cd455e205071d9e8
    paragraph_quote: '1. Security Instruments Change Date July 30, 2019 • This chapter
      has been revised in its entirety. a. Requirements Department of Veterans Affairs
      (VA) does not have a specific note or mortgage form that lenders must use for
      VA-guaranteed loans. VA regulations at 38 C.F.R. 36.4337 provide that security
      instruments used by a lender which are inconsistent with VA regulations in effect
      on the date the loan is closed will be considered amended and supplemented to
      conform to the regulations. Lenders must ensure that the security instruments
      they use: • establish the required lien • comply with the laws and regulations
      governing VA’s home loan program • comply with applicable state laws, and •
      contain the following VA clauses: o assumption approval clause, o acceleration
      clause, o funding fee clause, o processing charge clause, and o indemnity liability
      assumption clause. b. Assumption Approval Clause The instruments evidencing
      the loan must read substantially as follows: “THIS LOAN IS NOT ASSUMABLE WITHOUT
      THE APPROVAL OF THE DEPARTMENT OF VETERANS AFFAIRS OR ITS AUTHORIZED AGENT.”
      The loan assumption notice must appear conspicuously on at least one of the
      security instruments for the loan. Continued on next page VA Pamphlet 26-7,
      Revised Chapter 9: Legal Instruments, Liens, Escrows, and Related Issues 9-3
      1. Security Instruments, continued c. Other Clauses The mortgage or deed of
      trust must contain four additional clauses related to the assumption of the
      loan. VA does not specifically require that these clauses also be included in
      the note, unless this is required under state law to make them enforceable.
      Due to variations in local laws, the lender should obtain legal guidance as
      to any minor changes in these sample clauses which may be necessary to ensure
      that they have the effect required by the law and regulations; that is, the
      lender does not have to use the exact language provided for these four clauses.
      Acceleration Clause This loan may be declared immediately due and payable upon
      transfer of the property securing such loan to any transferee, unless the acceptability
      of the assumption of the loan is established pursuant to 38 U.SC. 3714. Funding
      Fee Clause A fee equal to one-half of one percent of the balance of this loan
      as of the date of transfer of the property shall be payable at the time of transfer
      to the loan holder or its authorized agent, as trustee for the VA. If the assumer
      fails to pay this fee at the time of transfer, the fee shall constitute an additional
      debt to that already secured by this instrument, shall bear interest at the
      rate herein provided, and at the option of the payee of the indebtedness hereby
      secured or any transferee thereof, shall be immediately due and payable. This
      fee is automatically waived if the assumer is exempt under the provisions of
      38 U.S.C. 3729(c). Processing Charge Clause Upon application for approval to
      allow assumption of this loan, a processing fee may be charged by the loan holder
      or its authorized agent for determining the creditworthiness of the assumer
      and subsequently revising the holder’s ownership records when an approved transfer
      is completed. The amount of this charge shall not exceed the maximum established
      by VA for a loan to which 38 U.S.C. 3714 applies. Indemnity Liability Assumption
      Clause If this obligation is assumed, then the assumer hereby agrees to assume
      all of the obligations of the Veteran under the terms of the instruments creating
      and securing the loan. The assumer further agrees to indemnify VA to the extent
      of any claim payment arising from the guaranty or insurance of the indebtedness
      created by this instrument. VA Pamphlet 26-7, Revised Chapter 9: Legal Instruments,
      Liens, Escrows, and Related Issues 9-4'
  judgment: false
