CODE OF VIRGINIA

CERTAIN LOANS NOT CONSIDERED LOANS SECURED BY REAL ESTATE (§ 6.2-879)

A. If the bank reasonably and prudently relies upon factors other than or in
addition to the real estate security, such as general credit standing,
guarantees, commitments, or tangible or intangible personal property security,
and enters in its records a written statement of the factors it relies on, the
loan does not constitute a loan secured by real estate within the meaning of §
6.2-878, except that if the terms of the transaction shall be more favorable
than in the absence of a lien, an appraisal shall be required as provided under
§ 6.2-878.

B. Loans made to homeowners for maintenance, repair, landscaping, modernization,
alteration, improvement to, and furnishings and equipment for, their homes,
whether or not secured, shall not be considered as loans secured by real estate
within the meaning of § 6.2-878, provided each such loan shall (i) be payable
in approximately equal monthly installments, (ii) not be for a term longer than
12 years, and (iii) not exceed an amount specified in accordance with subsection
C of § 6.2-878. Such home loans may otherwise be made under the provisions of
§ 6.2-878 or 6.2-880. If such loan is in excess of the amount specified under
subsection C of § 6.2-878, unless the taking of real estate security is solely
in the abundance of caution and the terms are not more favorable than in the
absence of such a real estate lien, an appraisal as required by § 6.2-878 or
6.2-880 shall be required by the bank.

HISTORY: Code 1950, §§ 6-78, 6-79.2; 1952, c. 25; 1956, c. 622; 1960, c. 23;
1962, c. 267; 1964, c. 150; 1966, c. 584, §§ 6.1-65, 6.1-66; 1970, c. 13;
1976, c. 94; 1980, c. 714; 1991, c. 160; 1994, c. 501; 2005, c. 263; 2010, c.
794.