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Contract for Deed Loans (Pre 12/1/07)


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star Loan Servicing Fees (per occurrence):
Fee Amount
Assumption Fee $75
Easement Processing Fee $75
Mineral Lease Service Fee $75
Mineral Lease Assignment Fee $75
Severance Release Fee $75
Release of Deed Fee $75
Return Check Penalty

$25

star Severance (partial release) Policy
The VLB’s severance policy allows veterans to obtain fee title to a portion of their VLB tract in order to facilitate the financing of a home for the veteran. It is not intended to allow a veteran to sell a portion of the tract to another person.

Note: Such partial resale requests are always at the sole discretion of the VLB and subject to higher valuation pricing and stricter guidelines than severances for a homesite. It is also the policy of the VLB that any request for a severance represents a request to "subdivide" the existing tract. Therefore, all severances must be in compliance with state laws and county and local ordinances governing any such "subdivision." If any such law or ordinance imposes a condition that is more restrictive than the policy or procedure contained herein, the law or ordinance will control.

Procedures for severance (partial release) are included on this page in PDF format.

What are the conditions for a VLB severance? Learn More

Tracts less than 3 acres
The VLB will not grant a severance.

3 – 19 acres
A homesite severance is possible. The severance must be a minimum of one acre or the minimum size required by county and local regulations, whichever is larger. The partial release must allow sufficient room for the house, septic system and water well (where applicable), all of which must fit entirely within the boundaries of the partial release.

20 or more acres
At least one homesite severance is possible. Requests for additional severances are considered on a case-by-case basis.

Submitting a Severance Request
Before hiring a surveyor, it is very important to contact our servicer at 1-866-654-6345 to obtain information regarding the process for submitting a request for a severance price and approval.

star Assumptions (transfers)
For information concerning Assumptions (also known as transfers), contact our servicer at 1-866-654-6345 and ask for Special Loans. Assumption forms must be requested by, and will only be mailed to the account-holder.

star Forfeiture and Reinstatement Process
When a scheduled loan payment on a contract for deed loan is not received by the VLB within the time allotted, the account becomes delinquent. If the delinquent payments are not repaid, the VLB will give a minimum of 30 days written notice to the borrower. This notice is sent by certified mail to the last known address of the borrower. If the reason for the forfeiture is cured or corrected within the 30 days, the VLB will take no forfeiture action.

Reasons for VLB forfeiture of account. Learn More

A forfeiture may occur for any of the following reasons:

  1. Account remains delinquent outside the time allotted
  2. the contract has been transferred without the VLB's permission
  3. property taxes are delinquent
  4. any provisions of the Natural Resources Code, Chapter 161, terms of the contract, or the rules of the VLB are not satisfied.

If the borrower fails to cure the delinquency, the forfeiture will be effective at the same time the Veterans Land Board meets and adopts a resolution forfeiting the contract. At that time, the land and all payments previously made are forfeited to the VLB. The VLB is the sole judge of whether any contract may be forfeited.

When forfeiture happens on a contract for deed, the full title to the land will revert to the VLB, and the borrower now only has the right of reinstatement. The borrower's right to reinstatement ends when VLB meets and orders the tract for sale.

star Borrower’s Right of Reinstatement After Forfeiture
As part of the forfeiture process, the VLB may assess certain fees and penalties as a requirement to reinstate the loan. Current VLB policy only allows for two forfeitures and subsequent reinstatements of the original contract terms and conditions. If there is a third forfeiture, the account may only be reinstated by paying the loan in full.

star Penalties and Fees
Any account that is forfeited for the first or second time and is subsequently reinstated will be assessed a penalty of 1.5% of the unpaid delinquent amount due (principal and interest) for each month the account remains in a state of forfeiture. All past due amounts and late charges must also be paid including any delinquent property taxes.

In order to reinstate after the third forfeiture, the loan must be paid in full and a penalty of 1.5% of the outstanding principal balance is assessed each month the account remains in a state of forfeiture. This penalty is in addition to the amount required to pay the loan in full including all principal, accrued interest, late charges, deed fees and any other costs that may have accrued while this account was in forfeiture.

star Order for Sale (Foreclosure)
If the loan is not reinstated, the VLB will order the property sold. The land will then be offered for sale to veteran purchasers in one of our Forfeited Land Sales held in April or October.