{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/6.2-878.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/6.2-878.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/6.2-878.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/6.2-878.html"}],"law_id":76996,"edition_id":1,"section_id":76996,"structure_id":14189,"section_number":"6.2-878","catch_line":"Loans secured by real estate generally","history":"Code 1950, \u00a7 6-78; 1952, c. 25; 1956, c. 622; 1960, c. 23; 1964, c. 150; 1966, c. 584, \u00a7\u00a7 6.1-63, 6.1-65; 1968, c. 549; 1972, c. 189; 1976, c. 487; 1978, c. 624; 1979, c. 375; 1981, c. 271; 1982, c. 263; 1984, c. 133; 1988, c. 170; 1991, c. 160; 1992, c. 68; 1994, c. 501; 2005, c. 263; 2010, c. 794.","full_text":"A\n\nAs used in this section, “loan secured by real estate” means an obligation executed or assumed by the borrower that is secured by mortgage, deed of trust, or similar instrument, encumbering real estate that is owned by the borrower and upon which the bank relies as the principal security for the loan.B\n\nNo bank shall make any loan secured by real estate when such loan, together with all prior liens or encumbrances on such real estate, exceeds 90 percent of the appraised value of the real estate securing such loan.C\n\nThe appraisals necessitated by this section shall be required if the loan shall equal or exceed an amount established from time to time by the Commissioner. In establishing such amount, the Commissioner shall take into consideration the requirements imposed on banks under applicable federal regulations. Such appraisals shall be in writing, signed by the appraisers, and shall be retained in the files of the bank, subject to examination of bank examiners. The appraisers so appointed shall be experienced persons competent to appraise real estate in the locality where the real estate is located.D\n\nAny bank may make loans secured by real estate that do not comply with the limitations and restrictions in this section if the total unpaid amount of such loans, exclusive of the loans that subsequently comply with such limitations and restrictions, does not exceed 10 percent of the total amount of loans secured by real estate.E\n\nThe provisions of this section relating to ratio of loan to appraised value and appraisal shall not apply if:1\n\nThe real estate security is taken solely as an abundance of caution on terms which are not more favorable than they would be in absence of such a lien on real estate;2\n\nA real estate security conveyance is taken by or ancillary to the assignment of lease obligations upon which the bank is relying primarily and prudently;3\n\nA subsequent transaction results from an existing extension of credit providing (i) that the borrower has performed satisfactorily, (ii) there is no advance of new money, except as formerly agreed, (iii) the credit standing of the borrower is not deteriorating, and (iv) there is no obvious and noticeable deterioration of marketing conditions or the physical assets which provide collateral security to the bank; or4\n\nA lien upon real estate is taken to secure a prior advance which was not secured by such real estate.F\n\nIn cases where an appraisal by a state-certified or state-licensed appraiser is not required, under this section or other sections of this chapter in a real estate-related financial transaction, the bank as a matter of prudence may take and preserve a reasonable appraisal, valuation, or analysis of real estate or real property in connection with such transaction.G\n\nThe Commission may by order or regulation eliminate loans or specific categories of loans from the requirements of this section.H\n\nThe provisions of this section shall not be construed to prohibit any bank from accepting, as security for a loan that it had made in good faith without security or upon security since found to be inadequate, an obligation or obligations secured by mortgage, deed of trust, or other such instrument upon real estate.","order_by":null,"text":{"0":{"id":276338,"text":"As used in this section, “loan secured by real estate” means an obligation executed or assumed by the borrower that is secured by mortgage, deed of trust, or similar instrument, encumbering real estate that is owned by the borrower and upon which the bank relies as the principal security for the loan.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":276339,"text":"No bank shall make any loan secured by real estate when such loan, together with all prior liens or encumbrances on such real estate, exceeds 90 percent of the appraised value of the real estate securing such loan.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":276340,"text":"The appraisals necessitated by this section shall be required if the loan shall equal or exceed an amount established from time to time by the Commissioner. In establishing such amount, the Commissioner shall take into consideration the requirements imposed on banks under applicable federal regulations. Such appraisals shall be in writing, signed by the appraisers, and shall be retained in the files of the bank, subject to examination of bank examiners. The appraisers so appointed shall be experienced persons competent to appraise real estate in the locality where the real estate is located.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"3":{"id":276341,"text":"Any bank may make loans secured by real estate that do not comply with the limitations and restrictions in this section if the total unpaid amount of such loans, exclusive of the loans that subsequently comply with such limitations and restrictions, does not exceed 10 percent of the total amount of loans secured by real estate.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"4":{"id":276342,"text":"The provisions of this section relating to ratio of loan to appraised value and appraisal shall not apply if:","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"E1"},"5":{"id":276343,"text":"The real estate security is taken solely as an abundance of caution on terms which are not more favorable than they would be in absence of such a lien on real estate;","type":"section","prefixes":["E","1"],"prefix":"1","entire_prefix":"E1","prefix_anchor":"E1","level":2,"prior_prefix":"E","next_prefix":"E2"},"6":{"id":276344,"text":"A real estate security conveyance is taken by or ancillary to the assignment of lease obligations upon which the bank is relying primarily and prudently;","type":"section","prefixes":["E","2"],"prefix":"2","entire_prefix":"E2","prefix_anchor":"E2","level":2,"prior_prefix":"E1","next_prefix":"E3"},"7":{"id":276345,"text":"A subsequent transaction results from an existing extension of credit providing (i) that the borrower has performed satisfactorily, (ii) there is no advance of new money, except as formerly agreed, (iii) the credit standing of the borrower is not deteriorating, and (iv) there is no obvious and noticeable deterioration of marketing conditions or the physical assets which provide collateral security to the bank; or","type":"section","prefixes":["E","3"],"prefix":"3","entire_prefix":"E3","prefix_anchor":"E3","level":2,"prior_prefix":"E2","next_prefix":"E4"},"8":{"id":276346,"text":"A lien upon real estate is taken to secure a prior advance which was not secured by such real estate.","type":"section","prefixes":["E","4"],"prefix":"4","entire_prefix":"E4","prefix_anchor":"E4","level":2,"prior_prefix":"E3","next_prefix":"F"},"9":{"id":276347,"text":"In cases where an appraisal by a state-certified or state-licensed appraiser is not required, under this section or other sections of this chapter in a real estate-related financial transaction, the bank as a matter of prudence may take and preserve a reasonable appraisal, valuation, or analysis of real estate or real property in connection with such transaction.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E4","next_prefix":"G"},"10":{"id":276348,"text":"The Commission may by order or regulation eliminate loans or specific categories of loans from the requirements of this section.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"11":{"id":276349,"text":"The provisions of this section shall not be construed to prohibit any bank from accepting, as security for a loan that it had made in good faith without security or upon security since found to be inadequate, an obligation or obligations secured by mortgage, deed of trust, or other such instrument upon real estate.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G"}},"ancestry":[{"id":14189,"edition_id":1,"name":"Investments and Loans","identifier":"9","label":"article","depth":4,"order_by":1,"parent_id":13791,"metadata":{},"date_created":"2026-06-26 03:47:11","date_modified":"2026-06-26 03:47:11","permalink":{"id":265643,"object_type":"structure","relational_id":14189,"identifier":"9","token":"6.2\/II\/8\/9","url":"\/6.2\/II\/8\/9\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13791,"edition_id":1,"name":"Banks","identifier":"8","label":"chapter","depth":3,"order_by":1,"parent_id":13000,"metadata":{},"date_created":"2026-06-26 03:45:53","date_modified":"2026-06-26 03:45:53","permalink":{"id":265065,"object_type":"structure","relational_id":13791,"identifier":"8","token":"6.2\/II\/8","url":"\/6.2\/II\/8\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13000,"edition_id":1,"name":"Depository Institutions and Trust Organizations","identifier":"II","label":"subtitle","depth":2,"order_by":1,"parent_id":12852,"metadata":{},"date_created":"2026-06-26 03:44:07","date_modified":"2026-06-26 03:44:07","permalink":{"id":263685,"object_type":"structure","relational_id":13000,"identifier":"II","token":"6.2\/II","url":"\/6.2\/II\/","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":63411,"structure_id":14189,"section_number":"6.2-870","catch_line":"Limitation of amount invested in bank premises","url":"\/6.2-870\/","token":"6.2\/II\/8\/9\/6.2-870","metadata":false},{"id":64130,"structure_id":14189,"section_number":"6.2-871","catch_line":"Investment in stock or securities of bank service corporations","url":"\/6.2-871\/","token":"6.2\/II\/8\/9\/6.2-871","metadata":false},{"id":61248,"structure_id":14189,"section_number":"6.2-872","catch_line":"For what purpose banks may purchase, hold, and convey real estate","url":"\/6.2-872\/","token":"6.2\/II\/8\/9\/6.2-872","metadata":false},{"id":74353,"structure_id":14189,"section_number":"6.2-873","catch_line":"Additional permissible investments in real estate","url":"\/6.2-873\/","token":"6.2\/II\/8\/9\/6.2-873","metadata":false},{"id":82541,"structure_id":14189,"section_number":"6.2-874","catch_line":"Prohibited uses of bank's own stock; other investments or loans","url":"\/6.2-874\/","token":"6.2\/II\/8\/9\/6.2-874","metadata":false},{"id":57173,"structure_id":14189,"section_number":"6.2-875","catch_line":"Limitations on obligations of borrowers","url":"\/6.2-875\/","token":"6.2\/II\/8\/9\/6.2-875","metadata":false},{"id":55367,"structure_id":14189,"section_number":"6.2-876","catch_line":"Loans to executive officers or directors","url":"\/6.2-876\/","token":"6.2\/II\/8\/9\/6.2-876","metadata":false},{"id":85468,"structure_id":14189,"section_number":"6.2-877","catch_line":"Overdrafts by bank officer or director","url":"\/6.2-877\/","token":"6.2\/II\/8\/9\/6.2-877","metadata":false},{"id":76996,"structure_id":14189,"section_number":"6.2-878","catch_line":"Loans secured by real estate generally","url":"\/6.2-878\/","token":"6.2\/II\/8\/9\/6.2-878","metadata":false},{"id":80117,"structure_id":14189,"section_number":"6.2-879","catch_line":"Certain loans not considered loans secured by real estate","url":"\/6.2-879\/","token":"6.2\/II\/8\/9\/6.2-879","metadata":false},{"id":59260,"structure_id":14189,"section_number":"6.2-880","catch_line":"Construction loans","url":"\/6.2-880\/","token":"6.2\/II\/8\/9\/6.2-880","metadata":false},{"id":78478,"structure_id":14189,"section_number":"6.2-881","catch_line":"Investment in reverse annuity mortgages","url":"\/6.2-881\/","token":"6.2\/II\/8\/9\/6.2-881","metadata":false},{"id":60973,"structure_id":14189,"section_number":"6.2-882","catch_line":"Bank borrowing money or rediscounting its notes","url":"\/6.2-882\/","token":"6.2\/II\/8\/9\/6.2-882","metadata":false},{"id":87132,"structure_id":14189,"section_number":"6.2-883","catch_line":"Acceptance of drafts or bills of exchange; issuance of letters of credit","url":"\/6.2-883\/","token":"6.2\/II\/8\/9\/6.2-883","metadata":false},{"id":76682,"structure_id":14189,"section_number":"6.2-884","catch_line":"Ownership and lease of personal property","url":"\/6.2-884\/","token":"6.2\/II\/8\/9\/6.2-884","metadata":false},{"id":64536,"structure_id":14189,"section_number":"6.2-885","catch_line":"Investment in stock or securities of controlled subsidiary corporations","url":"\/6.2-885\/","token":"6.2\/II\/8\/9\/6.2-885","metadata":false},{"id":74671,"structure_id":14189,"section_number":"6.2-886","catch_line":"Regulation of controlled subsidiary corporations by Commission","url":"\/6.2-886\/","token":"6.2\/II\/8\/9\/6.2-886","metadata":false},{"id":73096,"structure_id":14189,"section_number":"6.2-887","catch_line":"Insurance business of controlled subsidiary","url":"\/6.2-887\/","token":"6.2\/II\/8\/9\/6.2-887","metadata":false},{"id":69740,"structure_id":14189,"section_number":"6.2-888","catch_line":"Real estate brokerage business of controlled subsidiary","url":"\/6.2-888\/","token":"6.2\/II\/8\/9\/6.2-888","metadata":false}],"previous_section":{"id":85468,"structure_id":14189,"section_number":"6.2-877","catch_line":"Overdrafts by bank officer or director","url":"\/6.2-877\/","token":"6.2\/II\/8\/9\/6.2-877","metadata":false},"next_section":{"id":80117,"structure_id":14189,"section_number":"6.2-879","catch_line":"Certain loans not considered loans secured by real estate","url":"\/6.2-879\/","token":"6.2\/II\/8\/9\/6.2-879","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/6.2-878\/","history_text":"

The record of this law\u2019s original creation isn\u2019t available online. It has been modified 19 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 1952, chapter 25; in 1956, chapter 622; in 1960, chapter 23; in 1964, chapter 150; in 1966, chapter 584; in 1968, chapter 549; in 1972, chapter 189; in 1976, chapter 487; in 1978, chapter 624; in 1979, chapter 375; in 1981, chapter 271; in 1982, chapter 263; in 1984, chapter 133; in 1988, chapter 170; in 1991, chapter 160; in 1992, chapter 68; in 1994, chapter 501<\/a>; in 2005, chapter 263<\/a>; in 2010, chapter 794<\/a>.<\/p>","references":[{"id":82541,"section_number":"6.2-874","catch_line":"Prohibited uses of bank's own stock; other investments or loans","order_by":null,"url":"\/6.2-874\/"},{"id":80117,"section_number":"6.2-879","catch_line":"Certain loans not considered loans secured by real estate","order_by":null,"url":"\/6.2-879\/"},{"id":59260,"section_number":"6.2-880","catch_line":"Construction loans","order_by":null,"url":"\/6.2-880\/"},{"id":64536,"section_number":"6.2-885","catch_line":"Investment in stock or securities of controlled subsidiary corporations","order_by":null,"url":"\/6.2-885\/"}],"refers_to":false,"permalink":{"id":265677,"object_type":"law","relational_id":76996,"identifier":"6.2-878","token":"6.2\/II\/8\/9\/6.2-878","url":"\/6.2-878\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/6.2-878\/","token":"6.2\/II\/8\/9\/6.2-878","dublin_core":{"Title":"Loans secured by real estate generally","Type":"Text","Format":"text\/html","Identifier":"\u00a7 6.2-878","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> As used in this section, “loan secured by real estate<\/span>” means an obligation executed or assumed by the borrower that is secured by mortgage, deed of trust, or similar instrument, encumbering real estate that is owned by the borrower and upon which the bank<\/span> relies as the principal security for the loan. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> No bank<\/span> shall make any loan secured by real estate<\/span> when such loan, together with all prior liens<\/span> or encumbrances on such real estate, exceeds 90 percent of the appraised value of the real estate securing such loan. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> The appraisals necessitated by this section shall be required if the loan shall equal or exceed an amount established from time to time by the Commissioner<\/span>. In establishing such amount, the Commissioner<\/span> shall take into consideration the requirements imposed on banks<\/span> under applicable federal regulations. Such appraisals shall be in writing, signed by the appraisers, and shall be retained in the files of the bank<\/span>, subject to examination of bank<\/span> examiners. The appraisers so appointed shall be experienced persons<\/span> competent to appraise real estate in the locality where the real estate is located. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> Any bank<\/span> may make loans secured by real estate that do not comply with the limitations and restrictions in this section if the total unpaid amount of such loans, exclusive of the loans that subsequently comply with such limitations and restrictions, does not exceed 10 percent of the total amount of loans secured by real estate. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> The provisions of this section relating to ratio of loan to appraised value and appraisal shall not apply if: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> The real estate security is taken solely as an abundance of caution on terms which are not more favorable than they would be in absence of such a lien<\/span> on real estate; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> A real estate security conveyance is taken by or ancillary to the assignment of lease obligations upon which the bank<\/span> is relying primarily and prudently; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> A subsequent transaction results from an existing extension of credit providing (i) that the borrower has performed satisfactorily, (ii) there is no advance of new money, except as formerly agreed, (iii) the credit standing of the borrower is not deteriorating, and (iv) there is no obvious and noticeable deterioration of marketing conditions or the physical assets<\/span> which provide collateral<\/span> security to the bank<\/span>; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> A lien<\/span> upon real estate is taken to secure a prior advance which was not secured by such real estate. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> In cases where an appraisal by a state-certified or state-licensed appraiser is not required, under this section or other sections of this chapter in a real estate-related financial transaction, the bank<\/span> as a matter of prudence may take and preserve a reasonable appraisal, valuation, or analysis of real estate or real property in connection with such transaction. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> The Commission<\/span> may by order<\/span> or regulation eliminate loans or specific categories of loans from the requirements of this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> The provisions of this section shall not be construed to prohibit any bank<\/span> from accepting, as security for a loan that it had made in good faith without security or upon security since found to be inadequate, an obligation or obligations secured by mortgage, deed of trust, or other such instrument upon real estate. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nLOANS SECURED BY REAL ESTATE GENERALLY (\u00a7 6.2-878)\n\nA. As used in this section, “loan secured by real estate” means an\nobligation executed or assumed by the borrower that is secured by mortgage, deed\nof trust, or similar instrument, encumbering real estate that is owned by the\nborrower and upon which the bank relies as the principal security for the loan.\n\nB. No bank shall make any loan secured by real estate when such loan, together\nwith all prior liens or encumbrances on such real estate, exceeds 90 percent of\nthe appraised value of the real estate securing such loan.\n\nC. The appraisals necessitated by this section shall be required if the loan\nshall equal or exceed an amount established from time to time by the\nCommissioner. In establishing such amount, the Commissioner shall take into\nconsideration the requirements imposed on banks under applicable federal\nregulations. Such appraisals shall be in writing, signed by the appraisers, and\nshall be retained in the files of the bank, subject to examination of bank\nexaminers. The appraisers so appointed shall be experienced persons competent to\nappraise real estate in the locality where the real estate is located.\n\nD. Any bank may make loans secured by real estate that do not comply with the\nlimitations and restrictions in this section if the total unpaid amount of such\nloans, exclusive of the loans that subsequently comply with such limitations and\nrestrictions, does not exceed 10 percent of the total amount of loans secured by\nreal estate.\n\nE. The provisions of this section relating to ratio of loan to appraised value\nand appraisal shall not apply if:\n\n 1. The real estate security is taken solely as an abundance of caution on\n terms which are not more favorable than they would be in absence of such a\n lien on real estate;\n\n 2. A real estate security conveyance is taken by or ancillary to the\n assignment of lease obligations upon which the bank is relying primarily and\n prudently;\n\n 3. A subsequent transaction results from an existing extension of credit\n providing (i) that the borrower has performed satisfactorily, (ii) there is no\n advance of new money, except as formerly agreed, (iii) the credit standing of\n the borrower is not deteriorating, and (iv) there is no obvious and noticeable\n deterioration of marketing conditions or the physical assets which provide\n collateral security to the bank; or\n\n 4. A lien upon real estate is taken to secure a prior advance which was not\n secured by such real estate.\n\nF. In cases where an appraisal by a state-certified or state-licensed appraiser\nis not required, under this section or other sections of this chapter in a real\nestate-related financial transaction, the bank as a matter of prudence may take\nand preserve a reasonable appraisal, valuation, or analysis of real estate or\nreal property in connection with such transaction.\n\nG. The Commission may by order or regulation eliminate loans or specific\ncategories of loans from the requirements of this section.\n\nH. The provisions of this section shall not be construed to prohibit any bank\nfrom accepting, as security for a loan that it had made in good faith without\nsecurity or upon security since found to be inadequate, an obligation or\nobligations secured by mortgage, deed of trust, or other such instrument upon\nreal estate.\n\nHISTORY: Code 1950, \u00a7 6-78; 1952, c. 25; 1956, c. 622; 1960, c. 23; 1964, c.\n150; 1966, c. 584, \u00a7\u00a7 6.1-63, 6.1-65; 1968, c. 549; 1972, c. 189; 1976, c.\n487; 1978, c. 624; 1979, c. 375; 1981, c. 271; 1982, c. 263; 1984, c. 133; 1988,\nc. 170; 1991, c. 160; 1992, c. 68; 1994, c. 501; 2005, c. 263; 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}}