Department Of Veterans Affairs (Va) Acceptance Of Properties printable pdf download

Veterans Benefits Administration

Circular 26-13-19

Department of Veterans Affairs

September 27, 2013

Washington, DC 20420

Department of Veterans Affairs (VA) Acceptance of Properties

1. Purpose. This Circular provides guidance on requests for execution of documents related to

the conveyance or reconveyance of properties to the Secretary of the Department of Veterans

Affairs (VA) in order to provide more specific details to those authorized to sign documents for

the Secretary, and to those who submit such documents.

2. Background. Conveyance of properties to the Secretary is addressed in Title 38, Code of

Federal Regulations (CFR), section 36.4323, titled “Election to Convey Security”. This section

discusses the conditions in which a loan holder or servicer that acquires a property which secured

a VA-guaranteed loan at a liquidation sale, via foreclosure or through acceptance of a deed-in-

lieu of foreclosure, may decide to transfer the property to the Secretary. The regulation provides

that the conveyance is subject to a number of provisions, particularly that the holder will convey

the title to the Secretary via a special warranty deed and must provide evidence to the Secretary

of acceptability of title (which need not be provided if transfer is via a general warranty deed).

Thus, the fact that the VA Loan Electronic Reporting Interface (VALERI) accepts an event to

report the notice of election to convey, does not mean the Secretary has actually accepted

conveyance of the property until the other provisions of 38 CFR 36.4323 are satisfied.

3. Additional State Transfer Requirements. In some states, both the Grantor (seller) and the

Grantee (buyer) are required to execute a transfer deed. Additionally, some states require

execution of other documents by the Grantor and/or the Grantee. Sometimes these documents

must accompany the transfer deed when it is submitted for recordation. Some documents are

required to establish status and value for future real estate taxes, while others may relate to

potential taxable income from the sale of real estate. VA will execute such documents when

they are clearly in conformance with their stated purposes (e.g., to establish real estate tax

value). However, in no event will VA’s execution of such a document be deemed as VA’s

acceptance of a property. Furthermore, when there are questionable items shown, such as a

report that a deed to VA is a deed-in-lieu of foreclosure, although such a deed should be to the

loan holder, with a subsequent transfer deed to the Secretary, then VA may seek clarification

prior to execution of the document.

4. California Certificate of Acceptance. Recently, VA has received requests for execution of

certificates of acceptance, which are purportedly required under California Government Code,

section 27281. However, that section specifically refers to transfer to a political corporation or

governmental agency for public purposes. As previously stated, conveyances to VA are actually

made to the Secretary as an officer of the United States, as part of a salvage operation under the

Home Loan Guaranty program. Therefore, such properties do not fit this section of the

California Government Code, which requires either a resolution of acceptance on the part of the

political corporation, or else a certificate of acceptance substantially in the form provided in the

code. Accordingly, such a certificate is not necessary. However, if a local jurisdiction demands

such a form in order to record a deed involving the Secretary, then authorized VA officials will

(LOCAL REPRODUCTION AUTHORIZED)

Department Of Veterans Affairs (Va) Acceptance Of Properties