Virginia Security Instruments:
In response to Virginia House Bill 304, Fannie Mae recently revised Virginia Security Instrument Model Form 3047 by adding the following new paragraph:
Assumption upon Decree of Annulment or Divorce. Virginia Code § 6.2-419 provides that any existing Borrower on the Loan may purchase the Property interest of another Borrower on the Loan by assuming the selling Borrower’s portion of the Loan in connection with a decree of annulment or divorce. The assuming Borrower must qualify for the underlying Loan as determined by the Lender. This Section 29 will apply only if (a) the Loan is not insured or guaranteed by the federal government, (b) the Property consists of four or fewer dwelling units, (c) the Property is owner-occupied and (d) the Loan is made primarily for personal, family, or household purposes.
As stated in the new paragraph, Virginia’s assumption requirements apply only to a “conventional home mortgage loan.” The statute defines a “conventional home mortgage loan” as “any loan made primarily for personal, family, or household purposes that is secured by a mortgage or deed of trust on owner-occupied residential real estate improved by housing consisting of four or fewer dwelling units.” The statute further provides that a “conventional home mortgage loan” does not include a loan that is federally insured, guaranteed, or otherwise secured by the federal government. Va. Code Ann. § 6.2-419(E).
Accordingly, these system changes will apply only to conventional loans secured by owner-occupied primary residences and second homes. The changes will not apply to FHA, Veterans Affairs (VA), or USDA/RD loans because those programs are insured, guaranteed, or otherwise secured by the federal government and are therefore excluded from the statutory definition of a conventional home mortgage loan. For purposes of this announcement, these eligible loan types are referred to as “applicable loans,” and the related disclosures are referred to as “applicable disclosures.”
This new paragraph now appears in the following documents:
(Applicable loans only)
For consistency, all versions of the documents listed above, including Cx26164 - FHA VA Deed of Trust 2021, have been updated to reflect the new revision date in the footer, even though this paragraph only applies to conventional loans.
State Assumption Notice (Cx28523):
Last Fall, Cx28523 “Maryland Assumption Notice” was created to disclose the assumption paragraph language from the FNMA Maryland model form. “Print Maryland Assumption Notice” (FI 193824) was also created to be globally mapped to “Yes” for all Maryland Pre-Disclosure and Initial Disclosure packages.
We have now updated Cx28523 to be a multistate document titled “State Assumption Notice,” which will print the applicable assumption paragraph language from the FNMA Virginia model form. In addition, FI 193824 has been renamed “Print State Assumption Notice” and will be globally mapped to “Yes” for all applicable Virginia Initial Disclosure packages because Va. Code Ann. § 6.2-419(E) states, in part:
“The lender shall disclose such assumption provision in writing to a conventional home mortgage loan applicant within three days of receiving a completed loan application.”
Clients may map this field to include the notice in other document packages as needed.
LE/CD Assumption Disclosure:
We have also updated the logic on the LE/CD assumption disclosure required by 12 CFR 1026.37(m)(2). The interpretation to 37(m)(2) states, in part:
“If the creditor can determine that such assumption is not permitted, the creditor complies with § 1026.37(m)(2) by disclosing that the loan is not assumable. In all other situations, including where assumption of a loan is permitted or is dependent on certain conditions or factors, or uncertainty exists as to the future assumability of a mortgage loan, the creditor complies with § 1026.37(m)(2) by disclosing that, under certain conditions, the creditor may allow a third party to assume the loan on its original terms.”
Because applicable loans in Virginia may now be assumable in annulment or divorce scenarios, the box will be checked when the lender “will allow, under certain conditions, this person to assume this loan on the original terms.” This will be implemented by globally mapping “Assumable Loan” (FI 1170) to “Yes” for applicable Virginia loans.
Exemptions:
Field Triggers:
“Maryland Apply Exemption to Assumption Upon Decree of Absolute Divorce” (FI 193924) has been renamed “Apply Exemption to State Assumption Upon Decree of Absolute Divorce.” When FI 193924 = “Yes,” it indicates that the lender is exempt from the assumption disclosure requirements and has opted out of the related ConformX functionality. This field allows lenders to:
When FI 1714 “Property State” = “VA,” FI 193924 defaults to “Yes” if FI 194350 “Closing Date On or After 07/01/2026” is not set to “Yes.”
Global Standard Value Field Mappings:
Standard “State Assumption Notice” (Cx28523) prints for Virginia loans when “Print State Assumption Notice” (FI 193824) is set to “Yes.” If "Apply Exemption to State Assumption Upon Decree of Absolute Divorce" (FI 193924) is set to “Yes,” the global standard value field mapping for “Print State Assumption Notice” will no longer set the field to “Yes” for applicable Virginia Initial Disclosure packages.
Among other things, “Assumable Loan” (FI 1170) determines how the Loan Estimate and Closing Disclosure “Assumable” section gets marked. If FI 193924 is set to “Yes,” the global standard value field mapping for “Assumable Loan” will no longer set the field to “Yes” for all applicable Virginia conventional loans. The multistate logic based on program settings will be applied instead. This will allow the “Assumption” provision of the LE/CD to be marked as “will not allow assumption of this loan on the original terms” for applicable Virginia loans as required.
Exemption Not Activated by Default:
“Apply Exemption to State Assumption Upon Decree of Absolute Divorce” is not set by default except as needed to accommodate the July 1, 2026 effective date. If FI 193924 is left blank, the functionality will assume there is no exemption. Clients may request that FI 193924 be set to “Yes” if they are exempt and choose to be excluded from the related default functionality.
These changes are available for testing on Stage & Stage 2 servers and will take effect on June 19, 2026. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
LEG-3735
DR-223877