CODE OF VIRGINIA

APPRAISALS; LOAN-TO-VALUE RATIOS (§ 6.2-1180)

A. A savings institution may make a real estate loan only after a qualified
person designated by the savings institution has submitted a signed appraisal of
the security property, except that an insured or guaranteed loan may be made on
the basis of a valuation of the security property furnished to the savings
institution by the insuring or guaranteeing agency.

B. At the time of origination, a real estate loan may not exceed 100 percent of
the appraised fair market value of the security property. During the term of the
loan, the loan-to-value ratio may increase above the maximum permissible
percentage if the increase results from an adjustment authorized by § 6.2-1182.
In the case of a home loan secured by borrower-occupied property, the loan
balance may not exceed 125 percent of the original appraised value of the
property during the term of the loan, unless the loan contract provides that the
payment shall be adjusted at least once every five years, beginning no later
than the 10th year of the loan, to a level sufficient to amortize the loan at
the then-existing interest rate and loan balance for the remaining term of the
loan. The 125 percent limitation shall not apply to that portion of a loan
balance that is interest received in the form of a percentage of the
appreciation in value of the security property.

HISTORY: 1985, c. 425, § 6.1-194.63; 1991, c. 230, § 6.1-194.151; 2010, c.
794.