Policy: IX.D.6x (inactive)
Issued: November 7, 1997
Owner: University of Virginia Investment Management Company (UVIMCO)
REGULATIONS GOVERNING THE FACULTY HOME MORTGAGE LOAN PROGRAM
This policy describes the general guidelines governing the faculty home mortgage loan program.
2.0 Policy [Top]
(As amended by the Finance Committee of the Board of Visitors effective March 25, 1991, and further amended by the Finance Committee of the Board of Visitors effective April 2, 1996)
The University of Virginia Faculty Home Mortgage Loan Program was modified as of April 2, 1996, for eligible faculty members (i.e., tenured or tenure-track faculty, who are ranked assistant professor or above, with at least a three-year appointment who began work prior to April 2, 1996) and was eliminated for faculty members who began or will begin work after April 2, 1996. Eligible faculty members will continue to have four (4) years from the date on which they became eligible to apply for a loan.
The Program is designed to assist faculty in purchasing a house or condominium in Charlottesville/Albemarle County. Prior to purchasing a house/condominium, applicants should contact the University of Virginia Investment Management Company (UVIMCO) at 804-924-4245. If the intended purchase is a condominium, additional guidelines apply and are available from UVIMCO.
- Three mortgage options are offered [see #2 for value determination guidelines]:
a. $65,000 to $100,000 on a First Deed of Trust with a maximum loan to value ratio of 90%;
b. $45,000 to $65,000 on a Second Deed of Trust with a maximum loan to value ratio of 90%; or
c. $35,000 on a Second Deed of Trust with a maximum loan to value ratio of 95%, given that the purchase price of the home does not exceed $200,000.
- Houses shall be appraised as follows:
a. For first mortgages, one appraisal is required by the University to be conducted by an appraiser selected by the University. The University reserves the right to require a second University appraisal should it be deemed necessary. The loan amount will be based on the lower of the purchase price or the appraised value. The cost of the appraisal, to be paid by the applicant at the time of loan application, is as follows:
- $250 each for existing residential properties in Charlottesville/Albemarle County.
- For houses under construction, a final inspection will be required per appraisal at an additional cost of $50.00 each for properties in Charlottesville/Albemarle County.
- Appraisals of condominiums and other unusual properties will be negotiated separately.
b. For second mortgages, the University will attempt to obtain the first lender's appraisal. In addition, a second appraisal is required by the University, to be made by an appraiser selected by the University, pursuant to the guidelines for first mortgages. The loan amount will be based on the lower of the purchase price or the average of the two appraisals. If, however, the University is unable to obtain a copy of the first lender's appraisal, the University reserves the right to require a second University appraisal should it be deemed necessary.
- Housing payments, including principal, interest, taxes and insurance on the first mortgage, and second mortgage, if applicable, cannot exceed 28% of gross monthly income (note: the University does not escrow for taxes and insurance). Housing payments, plus other debts/monthly payments, cannot exceed 36% of gross monthly income.
- Interest rates are changed daily and are comparable to local rates. For the current rate, please call UVIMCO. Applicants may lock into a rate for a maximum of 60 days. If for any reason the loan does not close within 60 days of the initial lock-in period, the initial guaranteed rate will expire and the applicant will receive the greater of (1) the original locked-in rate, or (2) the prevailing rate 5 days prior to the rescheduled closing.
- The University cannot consummate a loan more than sixty (60) days prior to the effective date of the applicant-borrower's appointment to the faculty.
- At the time of application a person must be eligible for a University home mortgage loan.
- Maximum length of time for repayment of a loan is 20 years, although payments can be set up based on a 30-year amortization schedule, with a balloon payment of the remaining balance falling due at the end of 20 years.
- An origination fee is due and payable at the time of closing. The fee is calculated as follows: Option #1, 1% of the loan amount; Option #2, 1.5% of the loan amount; Option #3, 2% of the loan amount.
- A document preparation and review fee in the amount of $250 is due and payable by the applicant-borrower at the time of closing. This fee is in addition to the origination fee (paragraph 6) and the appraisal fee (paragraph 2).
- Faculty members, who are eligible for the program, are limited to one University home mortgage loan per family during the period of employment. Eligibility expires four years after the date of becoming eligible for the loan program.
- Loans are limited to the purchase of homes to be occupied by the applicant-borrower (i.e., faculty member) as the primary residence. The University will not participate in any refinancing. An applicant owning a residence in the University community not financed by a University mortgage may obtain a University mortgage on another residence provided the applicant-borrower agrees to sell and convey the present residence within six (6) months following the closing of the University mortgage; if the applicant-borrower fails to sell and convey the present residence within six (6) months, the holder may, at its option, call the University mortgage loan.
- A second mortgage will be made only as part of the total original financing package. A second mortgage commitment is contingent upon the first lien amount and monthly payment of interest and principal not exceeding amounts agreed upon between the borrower and the University.
- In the event the applicant-borrower (i.e., faculty member) moves out of the property, or upon sale or conveyance of the property, the unpaid balance shall become immediately due and payable at the option of the University.
- In the event the applicant-borrower ceases to be a full-time employee of the University, or ceases to meet other qualifications originally required to obtain the loan, the debt shall become immediately due and payable at the option of the University, except that a retiring faculty member will be given an extension of time in which to pay off a loan, equal to the lesser of: (1) the original loan maturity date, or (2) an additional five years.
- To consummate a loan, the applicant-borrower will need the services of an attorney. Once the amount of the loan has been determined by the University, the applicant-borrower's attorney should communicate with the Special Counsel for the University, or his designee, in order to complete the transaction. All costs and expenses incurred by the University in connection with such mortgage loans shall be reimbursed to the University by the borrower upon request, but not later than at the time the loan is closed.
- To process and complete a loan requires a period of approximately 60 days from the date the application is submitted.
- Monthly payments are to be mailed as directed by the Mortgage Servicing Agent. Automatic drafting of mortgage payments can be arranged with the Mortgage Servicing Agent.
3.0 Definitions [Top]
4.0 References [Top]
5.0 Approvals and Revisions [Top]