source:
  type: regulation
  id: va-m26-7-ch07
  authority: "VA Lender Handbook M26-7 Chapter 7 — Loans Requiring Special Underwriting, Guaranty, and Other Considerations"
  description: 'VA Pamphlet 26-7 Chapter 7 governs special-underwriting VA loans.

    '
obligations:
- id: va-m26-7-ch07-construction-draw-borrower-approval
  canonical_id: va-m26-7-ch07-construction-draw-borrower-approval
  section: "VA M26-7 Ch. 7 — Construction Loan Draw Approvals"
  description: 'On a VA-guaranteed construction loan, [UNDERWRITER] must obtain

    written approval from the borrower before each draw payment is

    provided to the builder. The loan will not be guaranteed until

    construction is complete and all Notice of Value (NOV) conditions

    are met.

    '
  type: do
  audit_question: For every VA-guaranteed construction loan, can [UNDERWRITER] evidence (i) written borrower approval in file before each draw payment to the builder and (ii) completion of construction with all NOV conditions met before VA guaranty is requested?
  workflow_phase: closing
  owner_role: underwriter
  secondary_owner_role: closer
  cadence: per_event
  consequence: ''
  tags:
  - round-b
  - regulator-direct
  - va
  - m26-7
  - ch07
  - construction-loan
  - draws
  - promoted
  primary_source:
    tier: 1
    authority: "VA Lender Handbook M26-7 Chapter 7 — Loans Requiring Special Underwriting, Guaranty, and Other Considerations"
    source_class: va-handbook-m26-7
    source_url: https://benefits.va.gov/WARMS/M26_7.asp
    snapshot_id: 0e2735cf8ca44400
    fetched_at: '2026-05-23T01:50:00Z'
    content_hash: sha256:74297ad4fadd5e592b5688f5567170f8c128f7c9749dd06edd59e735a69099d8
    paragraph_quote: 'The lender must obtain written approval from the borrower before each draw '
    drafter_attestation: "Copied verbatim from VA Handbook snapshot 0e2735cf8ca44400 (M26-7 Ch. 7 — Construction draws) at 2026-05-23. Source PDF retrieved via Wayback Machine."
  promoted_at: '2026-05-23T02:05:45+00:00'
  promoted_from: va-m26-7-ch07-roundb-v1.yaml
  program_review: Does the program ensure written borrower approval precedes each construction-loan draw to the builder, and that guaranty is requested only after construction completion with all NOV conditions met?
  file_review: Spot-check construction loans; confirm written borrower approval for each draw and completion/NOV-condition evidence before guaranty request.
  judgment: false
- id: va-m26-7-ch07-limited-guaranty-marketability
  canonical_id: va-m26-7-ch07-limited-guaranty-marketability
  section: "VA M26-7 Ch. 7 — Joint/Limited-Guaranty Marketability Check"
  description: 'For VA loans with a limited (less-than-standard) guaranty (e.g.,

    joint loans with non-Veteran borrowers), [UNDERWRITER] must satisfy

    itself that the requirements of its investor or the secondary market

    can be met with this limited guaranty.

    '
  type: do
  audit_question: For every VA loan with a limited guaranty (joint loan with a non-Veteran borrower, etc.), can [UNDERWRITER] evidence its determination that the investor or secondary-market requirements can be met with the limited guaranty?
  workflow_phase: origination
  owner_role: underwriter
  secondary_owner_role: loan_officer
  cadence: per_loan
  consequence: ''
  tags:
  - round-b
  - regulator-direct
  - va
  - m26-7
  - ch07
  - joint-loan
  - limited-guaranty
  - promoted
  primary_source:
    tier: 1
    authority: "VA Lender Handbook M26-7 Chapter 7 — Loans Requiring Special Underwriting, Guaranty, and Other Considerations"
    source_class: va-handbook-m26-7
    source_url: https://benefits.va.gov/WARMS/M26_7.asp
    snapshot_id: 0e2735cf8ca44400
    fetched_at: '2026-05-23T01:50:00Z'
    content_hash: sha256:74297ad4fadd5e592b5688f5567170f8c128f7c9749dd06edd59e735a69099d8
    paragraph_quote: 'The lender must satisfy itself that the requirements of its investor or the '
    drafter_attestation: "Copied verbatim from VA Handbook snapshot 0e2735cf8ca44400 (M26-7 Ch. 7 — Limited guaranty marketability) at 2026-05-23. Source PDF retrieved via Wayback Machine."
  promoted_at: '2026-05-23T02:05:45+00:00'
  promoted_from: va-m26-7-ch07-roundb-v1.yaml
  program_review: Does the program ensure that, on limited-guaranty loans (e.g., joint loans with non-Veteran borrowers), the underwriter determines investor/secondary-market requirements can be met with the limited guaranty?
  file_review: Spot-check limited-guaranty files; confirm the documented investor/secondary-market satisfiability determination. The officer judges whether that determination is adequately supported.
  judgment: true
- id: va-m26-7-ch07-buydown-written-explanation
  canonical_id: va-m26-7-ch07-buydown-written-explanation
  section: "VA M26-7 Ch. 7 — Temporary Buydown Borrower Disclosure"
  description: '[UNDERWRITER] must provide the Veteran-borrower with a clear, written

    explanation of any temporary-buydown agreement, and a copy of the

    buydown and escrow agreements must accompany the loan submission to

    VA.

    '
  type: do
  audit_question: For every VA loan with a temporary buydown, can [UNDERWRITER] evidence (i) a clear written explanation of the buydown agreement provided to the Veteran-borrower and (ii) inclusion of the buydown and escrow agreements with the loan submission to VA?
  workflow_phase: origination
  owner_role: underwriter
  secondary_owner_role: closer
  cadence: per_loan
  consequence: ''
  tags:
  - round-b
  - regulator-direct
  - va
  - m26-7
  - ch07
  - buydown
  - disclosure
  - promoted
  primary_source:
    tier: 1
    authority: "VA Lender Handbook M26-7 Chapter 7 — Loans Requiring Special Underwriting, Guaranty, and Other Considerations"
    source_class: va-handbook-m26-7
    source_url: https://benefits.va.gov/WARMS/M26_7.asp
    snapshot_id: 0e2735cf8ca44400
    fetched_at: '2026-05-23T01:50:00Z'
    content_hash: sha256:74297ad4fadd5e592b5688f5567170f8c128f7c9749dd06edd59e735a69099d8
    paragraph_quote: 'the buydown. Lenders must provide the Veteran-borrower with a clear, '
    drafter_attestation: "Copied verbatim from VA Handbook snapshot 0e2735cf8ca44400 (M26-7 Ch. 7 — Buydown disclosure) at 2026-05-23. Source PDF retrieved via Wayback Machine."
  promoted_at: '2026-05-23T02:05:45+00:00'
  promoted_from: va-m26-7-ch07-roundb-v1.yaml
  program_review: Does the program ensure a clear written explanation of any temporary-buydown agreement is provided to the Veteran-borrower, and that the buydown and escrow agreements accompany the VA loan submission?
  file_review: Spot-check buydown files; confirm the written borrower explanation and the buydown/escrow agreements in the VA submission.
  judgment: false
_promotion_history:
- promoted_at: '2026-05-23T02:05:45+00:00'
  candidate_path: obligations\_remediation\_round_b_drafts\va-m26-7-ch07-roundb-v1.yaml
  candidates_promoted: 3
  candidates_skipped_existing: 0
