{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/6.2-327.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/6.2-327.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/6.2-327.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/6.2-327.html"}],"law_id":66025,"edition_id":1,"section_id":66025,"structure_id":13915,"section_number":"6.2-327","catch_line":"Certain loans secured by a subordinate deed of trust or mortgage","history":"1987, c. 622, \u00a7\u00a7 6.1-330.59, 6.1-330.69, 6.1-330.71; 1991, c. 157; 1996, c. 243; 2010, c. 794.","full_text":"A\n\nAs used in this section:\n\t\t\t“Exempt subordinate mortgage lender” means (i) a bank, savings institution, industrial loan association, or credit union or (ii) a seller in a real estate sales transaction who takes a subordinate mortgage or deed of trust on such real estate.\n\t\t\t“New money” means money advanced in excess of the outstanding principal balance at the time a new advance is made.\n\t\t\t“Real estate” includes a leasehold estate of not less than 25 years.\n\t\t\t“Residential real estate” means real estate improved by the construction thereon of housing consisting of one- to four-family dwelling units.B\n\nAn add-on interest loan shall be subject to the following provisions:1\n\nAny person may charge add-on interest that results in an annual yield of not more than 18 percent upon loans secured in whole or in part by a subordinate mortgage or deed of trust on residential real estate;2\n\nAn add-on interest loan may be made only under this subsection and shall not exceed a period of five years and one month; and3\n\nThe lender may also impose a loan fee not exceeding two percent of the principal amount of the loan provided that such loan fee shall not be imposed more often than once each 18 months except to the extent that new money is advanced within such 18-month period by a renewal or additional loan. New money shall be money advanced in excess of the outstanding principal balance at the time such new advance is made. These provisions shall apply whether such loan fee is payable directly to the lender or to a third party in connection with such loan.C\n\nNo charge, other than actual costs documented to the applicant and expended for a credit report and an appraisal of the real estate conducted in connection with the loan application, may be made if a loan secured by a subordinate mortgage or deed of trust is not made. Such charge:1\n\nShall not exceed one percent of the amount of the loan applied for; but in no event shall such charge exceed $50 or one-half of such costs, whichever is less; and2\n\nMay be made only if the lender commits to make the loan. Such commitment shall be in writing and signed by the lender or a person who the lender has authorized to execute such documents.D\n\nAny loan secured by a subordinate mortgage or deed of trust on residential real estate upon which the interest is charged at an annual interest rate on the unpaid balance thereof shall be subject to the following provisions:1\n\nSuch a loan may be lawfully enforced at the annual interest rate stated in the contract of indebtedness on the principal amount of the loan. Such annual interest rate may vary in accordance with an exterior standard;2\n\nIn addition to the annual interest rate permitted by subdivision 1, the lender may charge the borrower a loan fee not exceeding five percent of the principal amount of the loan, provided that such loan fee shall not be imposed more often than once each 18 months except to the extent that new money is advanced within such 18-month period by a renewal or additional loan. Such loan fee may only be reimposed by the lender upon a borrower in connection with the refinancing of a loan made pursuant to this subsection; and3\n\nThe lender may charge the borrower with the actual costs of the loan as permitted by § 6.2-328.E\n\nThe rates, charges and other provisions permitted or required by this section or by § 6.2-328 shall apply to all loans secured by a subordinate mortgage or deed of trust, including, without limitation, (i) single maturity loans, (ii) amortizing loans, and (iii) loans secured by a credit line deed of trust as permitted by § 55.1-318.F\n\nExcept for the loan fee permitted in this section, no discount, initial interest, points or charges by any other name may be collected, charged or added to a loan secured by a subordinate mortgage or deed of trust upon residential real estate.G\n\nThe provisions of this section shall not apply to any loan by an exempt subordinate mortgage lender.H\n\nFor the purpose of this section, an interest rate that varies in accordance with any exterior standard, or that cannot be ascertained from the contract without reference to any exterior circumstances or documents, shall be enforceable as agreed in the contract of indebtedness or other signed agreement.I\n\nThe borrower under any loan to which the provisions of this section apply may assert any defense or claim he may have under §§ 6.2-304 and 6.2-305 against any assignee or transferee of the contract of indebtedness.","order_by":null,"text":{"0":{"id":239921,"text":"As used in this section:\n\t\t\t“Exempt subordinate mortgage lender” means (i) a bank, savings institution, industrial loan association, or credit union or (ii) a seller in a real estate sales transaction who takes a subordinate mortgage or deed of trust on such real estate.\n\t\t\t“New money” means money advanced in excess of the outstanding principal balance at the time a new advance is made.\n\t\t\t“Real estate” includes a leasehold estate of not less than 25 years.\n\t\t\t“Residential real estate” means real estate improved by the construction thereon of housing consisting of one- to four-family dwelling units.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":239922,"text":"An add-on interest loan shall be subject to the following provisions:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"B1"},"2":{"id":239923,"text":"Any person may charge add-on interest that results in an annual yield of not more than 18 percent upon loans secured in whole or in part by a subordinate mortgage or deed of trust on residential real estate;","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"3":{"id":239924,"text":"An add-on interest loan may be made only under this subsection and shall not exceed a period of five years and one month; and","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"B3"},"4":{"id":239925,"text":"The lender may also impose a loan fee not exceeding two percent of the principal amount of the loan provided that such loan fee shall not be imposed more often than once each 18 months except to the extent that new money is advanced within such 18-month period by a renewal or additional loan. New money shall be money advanced in excess of the outstanding principal balance at the time such new advance is made. These provisions shall apply whether such loan fee is payable directly to the lender or to a third party in connection with such loan.","type":"section","prefixes":["B","3"],"prefix":"3","entire_prefix":"B3","prefix_anchor":"B3","level":2,"prior_prefix":"B2","next_prefix":"C"},"5":{"id":239926,"text":"No charge, other than actual costs documented to the applicant and expended for a credit report and an appraisal of the real estate conducted in connection with the loan application, may be made if a loan secured by a subordinate mortgage or deed of trust is not made. Such charge:","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B3","next_prefix":"C1"},"6":{"id":239927,"text":"Shall not exceed one percent of the amount of the loan applied for; but in no event shall such charge exceed $50 or one-half of such costs, whichever is less; and","type":"section","prefixes":["C","1"],"prefix":"1","entire_prefix":"C1","prefix_anchor":"C1","level":2,"prior_prefix":"C","next_prefix":"C2"},"7":{"id":239928,"text":"May be made only if the lender commits to make the loan. Such commitment shall be in writing and signed by the lender or a person who the lender has authorized to execute such documents.","type":"section","prefixes":["C","2"],"prefix":"2","entire_prefix":"C2","prefix_anchor":"C2","level":2,"prior_prefix":"C1","next_prefix":"D"},"8":{"id":239929,"text":"Any loan secured by a subordinate mortgage or deed of trust on residential real estate upon which the interest is charged at an annual interest rate on the unpaid balance thereof shall be subject to the following provisions:","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C2","next_prefix":"D1"},"9":{"id":239930,"text":"Such a loan may be lawfully enforced at the annual interest rate stated in the contract of indebtedness on the principal amount of the loan. Such annual interest rate may vary in accordance with an exterior standard;","type":"section","prefixes":["D","1"],"prefix":"1","entire_prefix":"D1","prefix_anchor":"D1","level":2,"prior_prefix":"D","next_prefix":"D2"},"10":{"id":239931,"text":"In addition to the annual interest rate permitted by subdivision 1, the lender may charge the borrower a loan fee not exceeding five percent of the principal amount of the loan, provided that such loan fee shall not be imposed more often than once each 18 months except to the extent that new money is advanced within such 18-month period by a renewal or additional loan. Such loan fee may only be reimposed by the lender upon a borrower in connection with the refinancing of a loan made pursuant to this subsection; and","type":"section","prefixes":["D","2"],"prefix":"2","entire_prefix":"D2","prefix_anchor":"D2","level":2,"prior_prefix":"D1","next_prefix":"D3"},"11":{"id":239932,"text":"The lender may charge the borrower with the actual costs of the loan as permitted by § 6.2-328.","type":"section","prefixes":["D","3"],"prefix":"3","entire_prefix":"D3","prefix_anchor":"D3","level":2,"prior_prefix":"D2","next_prefix":"E"},"12":{"id":239933,"text":"The rates, charges and other provisions permitted or required by this section or by § 6.2-328 shall apply to all loans secured by a subordinate mortgage or deed of trust, including, without limitation, (i) single maturity loans, (ii) amortizing loans, and (iii) loans secured by a credit line deed of trust as permitted by § 55.1-318.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D3","next_prefix":"F"},"13":{"id":239934,"text":"Except for the loan fee permitted in this section, no discount, initial interest, points or charges by any other name may be collected, charged or added to a loan secured by a subordinate mortgage or deed of trust upon residential real estate.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"14":{"id":239935,"text":"The provisions of this section shall not apply to any loan by an exempt subordinate mortgage lender.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"15":{"id":239936,"text":"For the purpose of this section, an interest rate that varies in accordance with any exterior standard, or that cannot be ascertained from the contract without reference to any exterior circumstances or documents, shall be enforceable as agreed in the contract of indebtedness or other signed agreement.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G","next_prefix":"I"},"16":{"id":239937,"text":"The borrower under any loan to which the provisions of this section apply may assert any defense or claim he may have under §§ 6.2-304 and 6.2-305 against any assignee or transferee of the contract of indebtedness.","type":"section","prefixes":["I"],"prefix":"I","entire_prefix":"I","prefix_anchor":"I","level":1,"prior_prefix":"H"}},"ancestry":[{"id":13915,"edition_id":1,"name":"Loans Exempt From Limit on Contract Rate of Interest","identifier":"4","label":"article","depth":4,"order_by":1,"parent_id":13814,"metadata":{},"date_created":"2026-06-26 03:46:17","date_modified":"2026-06-26 03:46:17","permalink":{"id":263377,"object_type":"structure","relational_id":13915,"identifier":"4","token":"6.2\/I\/3\/4","url":"\/6.2\/I\/3\/4\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13814,"edition_id":1,"name":"Interest and Usury","identifier":"3","label":"chapter","depth":3,"order_by":1,"parent_id":12853,"metadata":{},"date_created":"2026-06-26 03:45:57","date_modified":"2026-06-26 03:45:57","permalink":{"id":263333,"object_type":"structure","relational_id":13814,"identifier":"3","token":"6.2\/I\/3","url":"\/6.2\/I\/3\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12853,"edition_id":1,"name":"General Provisions","identifier":"I","label":"subtitle","depth":2,"order_by":1,"parent_id":12852,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":263251,"object_type":"structure","relational_id":12853,"identifier":"I","token":"6.2\/I","url":"\/6.2\/I\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12852,"edition_id":1,"name":"Financial Institutions and Services","identifier":"6.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":263249,"object_type":"structure","relational_id":12852,"identifier":"6.2","token":"6.2","url":"\/6.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":64100,"structure_id":13915,"section_number":"6.2-309","catch_line":"Charges by banks and savings institutions on installment loans","url":"\/6.2-309\/","token":"6.2\/I\/3\/4\/6.2-309","metadata":false},{"id":77440,"structure_id":13915,"section_number":"6.2-310","catch_line":"Rate of interest chargeable by state banks and savings institutions","url":"\/6.2-310\/","token":"6.2\/I\/3\/4\/6.2-310","metadata":false},{"id":68100,"structure_id":13915,"section_number":"6.2-311","catch_line":"Closed-end installment loans by sellers of goods or services","url":"\/6.2-311\/","token":"6.2\/I\/3\/4\/6.2-311","metadata":false},{"id":71317,"structure_id":13915,"section_number":"6.2-312","catch_line":"Open-end credit plans","url":"\/6.2-312\/","token":"6.2\/I\/3\/4\/6.2-312","metadata":false},{"id":71741,"structure_id":13915,"section_number":"6.2-313","catch_line":"Open-end credit extended by banks or savings institutions","url":"\/6.2-313\/","token":"6.2\/I\/3\/4\/6.2-313","metadata":false},{"id":55614,"structure_id":13915,"section_number":"6.2-314","catch_line":"Motor vehicle purchase loans by subsidiaries and affiliates of banks and savings institutions","url":"\/6.2-314\/","token":"6.2\/I\/3\/4\/6.2-314","metadata":false},{"id":57088,"structure_id":13915,"section_number":"6.2-315","catch_line":"Loans by certain financial institutions or brokers payable on demand or having a term up to one year","url":"\/6.2-315\/","token":"6.2\/I\/3\/4\/6.2-315","metadata":false},{"id":80987,"structure_id":13915,"section_number":"6.2-316","catch_line":"Loans of $5,000 or more made by certain financial institutions","url":"\/6.2-316\/","token":"6.2\/I\/3\/4\/6.2-316","metadata":false},{"id":69996,"structure_id":13915,"section_number":"6.2-317","catch_line":"Loans of $5,000 or more for business or investment purposes","url":"\/6.2-317\/","token":"6.2\/I\/3\/4\/6.2-317","metadata":false},{"id":86413,"structure_id":13915,"section_number":"6.2-318","catch_line":"Loans by credit unions","url":"\/6.2-318\/","token":"6.2\/I\/3\/4\/6.2-318","metadata":false},{"id":73942,"structure_id":13915,"section_number":"6.2-319","catch_line":"Loans by pension plans to participants","url":"\/6.2-319\/","token":"6.2\/I\/3\/4\/6.2-319","metadata":false},{"id":80507,"structure_id":13915,"section_number":"6.2-320","catch_line":"Loans by industrial loan associations","url":"\/6.2-320\/","token":"6.2\/I\/3\/4\/6.2-320","metadata":false},{"id":63304,"structure_id":13915,"section_number":"6.2-321","catch_line":"Loans pursuant to stock option financing programs","url":"\/6.2-321\/","token":"6.2\/I\/3\/4\/6.2-321","metadata":false},{"id":59573,"structure_id":13915,"section_number":"6.2-322","catch_line":"Extensions of credit on pledged securities","url":"\/6.2-322\/","token":"6.2\/I\/3\/4\/6.2-322","metadata":false},{"id":54963,"structure_id":13915,"section_number":"6.2-323","catch_line":"Educational loans by banks or savings institutions","url":"\/6.2-323\/","token":"6.2\/I\/3\/4\/6.2-323","metadata":false},{"id":77770,"structure_id":13915,"section_number":"6.2-324","catch_line":"Educational loans by private institution of higher education","url":"\/6.2-324\/","token":"6.2\/I\/3\/4\/6.2-324","metadata":false},{"id":81140,"structure_id":13915,"section_number":"6.2-325","catch_line":"Certain loans secured by first deed of trust or mortgage","url":"\/6.2-325\/","token":"6.2\/I\/3\/4\/6.2-325","metadata":false},{"id":57847,"structure_id":13915,"section_number":"6.2-326","catch_line":"Fees and charges in connection with loans by real estate lenders","url":"\/6.2-326\/","token":"6.2\/I\/3\/4\/6.2-326","metadata":false},{"id":66025,"structure_id":13915,"section_number":"6.2-327","catch_line":"Certain loans secured by a subordinate deed of trust or mortgage","url":"\/6.2-327\/","token":"6.2\/I\/3\/4\/6.2-327","metadata":false},{"id":55296,"structure_id":13915,"section_number":"6.2-328","catch_line":"Charges allowed on loan secured by subordinate mortgage","url":"\/6.2-328\/","token":"6.2\/I\/3\/4\/6.2-328","metadata":false},{"id":71049,"structure_id":13915,"section_number":"6.2-329","catch_line":"Loans insured or guaranteed by certain governmental agencies","url":"\/6.2-329\/","token":"6.2\/I\/3\/4\/6.2-329","metadata":false}],"previous_section":{"id":57847,"structure_id":13915,"section_number":"6.2-326","catch_line":"Fees and charges in connection with loans by real estate lenders","url":"\/6.2-326\/","token":"6.2\/I\/3\/4\/6.2-326","metadata":false},"next_section":{"id":55296,"structure_id":13915,"section_number":"6.2-328","catch_line":"Charges allowed on loan secured by subordinate mortgage","url":"\/6.2-328\/","token":"6.2\/I\/3\/4\/6.2-328","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/6.2-327\/","history_text":"

This law was first created in 1987. The record of its establishment is cataloged in chapter 622 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1987 \u201cActs\u201d aren\u2019t available online. It has been modified 3 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1991, chapter 157; in 1996, chapter 243<\/a>; in 2010, chapter 794<\/a>.<\/p>","references":[{"id":78551,"section_number":"6.2-1501","catch_line":"Compliance with chapter; license required; attempts to evade application of chapter","order_by":null,"url":"\/6.2-1501\/"},{"id":57733,"section_number":"6.2-307","catch_line":"Assertion of defenses or claims by borrowers; effect of assignment","order_by":null,"url":"\/6.2-307\/"},{"id":71317,"section_number":"6.2-312","catch_line":"Open-end credit plans","order_by":null,"url":"\/6.2-312\/"},{"id":86413,"section_number":"6.2-318","catch_line":"Loans by credit unions","order_by":null,"url":"\/6.2-318\/"},{"id":57847,"section_number":"6.2-326","catch_line":"Fees and charges in connection with loans by real estate lenders","order_by":null,"url":"\/6.2-326\/"},{"id":55296,"section_number":"6.2-328","catch_line":"Charges allowed on loan secured by subordinate mortgage","order_by":null,"url":"\/6.2-328\/"},{"id":61310,"section_number":"6.2-423","catch_line":"Prepayment of loans secured by certain subordinate mortgages or deeds of trust; rebates for unearned interest","order_by":null,"url":"\/6.2-423\/"}],"refers_to":[{"id":54820,"section_number":"6.2-304","catch_line":"Plea of usury; judgment","order_by":null,"url":"\/6.2-304\/"},{"id":87142,"section_number":"6.2-305","catch_line":"Recovery of twice total usurious interest paid; limitation of action; injunction to prevent sale of property pending action; effect of errors in computation","order_by":null,"url":"\/6.2-305\/"},{"id":55296,"section_number":"6.2-328","catch_line":"Charges allowed on loan secured by subordinate mortgage","order_by":null,"url":"\/6.2-328\/"}],"permalink":{"id":263451,"object_type":"law","relational_id":66025,"identifier":"6.2-327","token":"6.2\/I\/3\/4\/6.2-327","url":"\/6.2-327\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/6.2-327\/","token":"6.2\/I\/3\/4\/6.2-327","dublin_core":{"Title":"Certain loans secured by a subordinate deed of trust or mortgage","Type":"Text","Format":"text\/html","Identifier":"\u00a7 6.2-327","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> As used in this section:\n\t\t\t“Exempt subordinate mortgage lender<\/span>” means (i) a bank<\/span>, savings institution<\/span>, industrial loan<\/span> association, or credit union<\/span> or (ii) a seller in a real estate sales transaction who takes a subordinate mortgage or deed of trust<\/span> on such real estate.\n\t\t\t“New money<\/span>” means money advanced in excess of the outstanding principal balance at the time a new advance is made.\n\t\t\t“Real estate” includes a leasehold estate of not less than 25 years.\n\t\t\t“Residential real estate<\/span>” means real estate improved by the construction thereon of housing consisting of one- to four-family dwelling units. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> An add-on interest loan<\/span> shall be subject to the following provisions: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Any person<\/span> may charge add-on interest that results in an annual yield of not more than 18 percent upon loans<\/span> secured in whole or in part by a subordinate mortgage or deed of trust<\/span> on residential real estate<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> An add-on interest loan<\/span> may be made only under this subsection and shall not exceed a period of five years and one month; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> The lender may also impose a loan<\/span> fee not exceeding two percent of the principal amount of the loan<\/span> provided that such loan<\/span> fee shall not be imposed more often than once each 18 months except to the extent that new money<\/span> is advanced within such 18-month period by a renewal or additional loan<\/span>. New money<\/span> shall be money advanced in excess of the outstanding principal balance at the time such new advance is made. These provisions shall apply whether such loan<\/span> fee is payable directly to the lender or to a third party<\/span> in connection with such loan<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> No charge, other than actual costs documented to the applicant and expended for a credit report and an appraisal of the real estate conducted in connection with the loan<\/span> application, may be made if a loan<\/span> secured by a subordinate mortgage or deed of trust<\/span> is not made. Such charge: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Shall not exceed one percent of the amount of the loan<\/span> applied for; but in no event shall such charge exceed $50 or one-half of such costs, whichever is less; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> May be made only if the lender commits to make the loan<\/span>. Such commitment shall be in writing and signed by the lender or a person<\/span> who the lender has authorized to execute such documents. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> Any loan<\/span> secured by a subordinate mortgage or deed of trust<\/span> on residential real estate<\/span> upon which the interest is charged at an annual interest rate on the unpaid balance thereof shall be subject to the following provisions: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Such a loan<\/span> may be lawfully enforced at the annual interest rate stated in the contract<\/span> of indebtedness on the principal amount of the loan<\/span>. Such annual interest rate may vary in accordance with an exterior standard; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> In addition to the annual interest rate permitted by subdivision 1, the lender may charge the borrower a loan<\/span> fee not exceeding five percent of the principal amount of the loan<\/span>, provided that such loan<\/span> fee shall not be imposed more often than once each 18 months except to the extent that new money<\/span> is advanced within such 18-month period by a renewal or additional loan<\/span>. Such loan<\/span> fee may only be reimposed by the lender upon a borrower in connection with the refinancing of a loan<\/span> made pursuant to this subsection; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> The lender may charge the borrower with the actual costs of the loan<\/span> as permitted by § 6.2-328<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> The rates, charges and other provisions permitted or required by this section or by § 6.2-328<\/a> shall apply to all loans<\/span> secured by a subordinate mortgage or deed of trust<\/span>, including, without limitation, (i) single maturity loans<\/span>, (ii) amortizing loans<\/span>, and (iii) loans<\/span> secured by a credit line deed of trust as permitted by § 55.1-318<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> Except for the loan<\/span> fee permitted in this section, no discount, initial interest, points or charges by any other name may be collected, charged or added to a loan<\/span> secured by a subordinate mortgage or deed of trust<\/span> upon residential real estate<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> The provisions of this section shall not apply to any loan<\/span> by an exempt subordinate mortgage lender<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> For the purpose of this section, an interest rate that varies in accordance with any exterior standard, or that cannot be ascertained from the contract<\/span> without reference to any exterior circumstances or documents, shall be enforceable as agreed in the contract<\/span> of indebtedness or other signed agreement. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

I.<\/span> The borrower under any loan<\/span> to which the provisions of this section apply may assert any defense or claim he may have under §§ 6.2-304<\/a> and 6.2-305<\/a> against any assignee or transferee of the contract<\/span> of indebtedness. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nCERTAIN LOANS SECURED BY A SUBORDINATE DEED OF TRUST OR MORTGAGE (\u00a7 6.2-327)\n\nA. As used in this section:\n\t\t\t“Exempt subordinate mortgage lender” means (i) a bank, savings\ninstitution, industrial loan association, or credit union or (ii) a seller in a\nreal estate sales transaction who takes a subordinate mortgage or deed of trust\non such real estate.\n\t\t\t“New money” means money advanced in excess of the outstanding\nprincipal balance at the time a new advance is made.\n\t\t\t“Real estate” includes a leasehold estate of not less than 25\nyears.\n\t\t\t“Residential real estate” means real estate improved by the\nconstruction thereon of housing consisting of one- to four-family dwelling\nunits.\n\nB. An add-on interest loan shall be subject to the following provisions:\n\n 1. Any person may charge add-on interest that results in an annual yield of\n not more than 18 percent upon loans secured in whole or in part by a\n subordinate mortgage or deed of trust on residential real estate;\n\n 2. An add-on interest loan may be made only under this subsection and shall\n not exceed a period of five years and one month; and\n\n 3. The lender may also impose a loan fee not exceeding two percent of the\n principal amount of the loan provided that such loan fee shall not be imposed\n more often than once each 18 months except to the extent that new money is\n advanced within such 18-month period by a renewal or additional loan. New\n money shall be money advanced in excess of the outstanding principal balance\n at the time such new advance is made. These provisions shall apply whether\n such loan fee is payable directly to the lender or to a third party in\n connection with such loan.\n\nC. No charge, other than actual costs documented to the applicant and expended\nfor a credit report and an appraisal of the real estate conducted in connection\nwith the loan application, may be made if a loan secured by a subordinate\nmortgage or deed of trust is not made. Such charge:\n\n 1. Shall not exceed one percent of the amount of the loan applied for; but in\n no event shall such charge exceed $50 or one-half of such costs, whichever is\n less; and\n\n 2. May be made only if the lender commits to make the loan. Such commitment\n shall be in writing and signed by the lender or a person who the lender has\n authorized to execute such documents.\n\nD. Any loan secured by a subordinate mortgage or deed of trust on residential\nreal estate upon which the interest is charged at an annual interest rate on the\nunpaid balance thereof shall be subject to the following provisions:\n\n 1. Such a loan may be lawfully enforced at the annual interest rate stated in\n the contract of indebtedness on the principal amount of the loan. Such annual\n interest rate may vary in accordance with an exterior standard;\n\n 2. In addition to the annual interest rate permitted by subdivision 1, the\n lender may charge the borrower a loan fee not exceeding five percent of the\n principal amount of the loan, provided that such loan fee shall not be imposed\n more often than once each 18 months except to the extent that new money is\n advanced within such 18-month period by a renewal or additional loan. Such\n loan fee may only be reimposed by the lender upon a borrower in connection\n with the refinancing of a loan made pursuant to this subsection; and\n\n 3. The lender may charge the borrower with the actual costs of the loan as\n permitted by § 6.2-328.\n\nE. The rates, charges and other provisions permitted or required by this section\nor by § 6.2-328 shall apply to all loans secured by a subordinate mortgage\nor deed of trust, including, without limitation, (i) single maturity loans, (ii)\namortizing loans, and (iii) loans secured by a credit line deed of trust as\npermitted by § 55.1-318.\n\nF. Except for the loan fee permitted in this section, no discount, initial\ninterest, points or charges by any other name may be collected, charged or added\nto a loan secured by a subordinate mortgage or deed of trust upon residential\nreal estate.\n\nG. The provisions of this section shall not apply to any loan by an exempt\nsubordinate mortgage lender.\n\nH. For the purpose of this section, an interest rate that varies in accordance\nwith any exterior standard, or that cannot be ascertained from the contract\nwithout reference to any exterior circumstances or documents, shall be\nenforceable as agreed in the contract of indebtedness or other signed agreement.\n\nI. The borrower under any loan to which the provisions of this section apply may\nassert any defense or claim he may have under §§ 6.2-304 and 6.2-305\nagainst any assignee or transferee of the contract of indebtedness.\n\nHISTORY: 1987, c. 622, \u00a7\u00a7 6.1-330.59, 6.1-330.69, 6.1-330.71; 1991, c. 157;\n1996, c. 243; 2010, c. 794.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}