Section 4.05. Financial requirements.

 

(1)   Veteran's contribution. If the applicant's contribution required under s. 45.35 , Stats., or any closing costs and moving expenses as the applicant may be required to pay, has been or is to be acquired by borrowing, other than from a government sponsored program, a program approved by the department or from the applicant's own assets, the application shall not be approved. The applicant must be financially able with the aid of the housing loan applied for to complete the purchase, construction or improvement and to pay all required closing and moving expenses. When the sales price, construction cost or total cost exceeds the value pursuant to s. VA 4.07 (2) , the applicant's contribution required under s. 45.35 , Stats., will be increased by the excess. Work credits, rent credits or other reductions of the price of the property being acquired by an applicant may be allowed but only after the applicant establishes that a 5% down payment has been made from the applicant's own funds. Mortgage funds may not be utilized to pay closing costs. Applicants shall submit verifications of all deposits in excess of $100 which will constitute a portion of their contribution.

(2)   Other owned real estate. All or any portion of or interest in other owned real estate, assigned to or encumbered in favor of the department in connection with primary loans, may be released pursuant to s. VA 4.08 (9) .

(3)   Personal property. The cost of any personal property included in a construction or improvement contract shall be paid by the applicant. The payment may not constitute part of the applicant's equity in the property. Carpeting, built-ins, fixtures or other items permanently affixed to the structure may not be considered personal property. No personal property may be financed with primary housing loans.

(4)   Employment. The applicant shall have stable employment and sufficient income and financial stability to assure repayment according to the terms of the loan. In the case of a primary loan, income and employment that is not maintained at closing as stated on the application shall result in the authorized lender canceling the loan commitment.

(5)   Liabilities. To determine whether the level of indebtedness is excessive, the department and authorized lender shall analyze the stated purposes for which an applicant's debts were incurred, the total amount of the indebtedness in relation to income, and the applicant's record of meeting past financial obligations. The purpose for which all debts were incurred shall be stated on the application. If the department or authorized lender determines the accumulated indebtedness indicates financial instability or the amount of monthly payments will impair the applicant's ability to make shelter cost payments and meet ordinary living expenses, the loan application shall be denied. Accumulation of net worth may be considered to be an indication of creditworthiness.

History: Cr. Register, May, 2000, No. 533 , eff. 6-1-00.