                                 CODE OF VIRGINIA

LIMITATIONS ON MORTGAGES (§ 38.2-1437)

A. The amount of any loan secured by a mortgage or deed of trust referred to in
§§ 38.2-1434 through 38.2-1436 shall not exceed the following percentages of
the fair market value of the real estate:

   1. Seventy-five percent for a leasehold loan made pursuant to subdivision 2 of
   &#xA7; 38.2-1434;

   2. Ninety percent for a loan made to an employee of the insurer, other than a
   director or trustee thereof, whether such loan be made in connection with the
   initial employment of the employee or in connection with the transfer of the
   place of employment of the employee; or

   3. Eighty percent for all other loans.
   				However, the percentage limits specified in this subsection may be
   exceeded if the excess is (i) insured or guaranteed or is to be insured or
   guaranteed by the United States, any state or any agency of either or (ii)
   insured by an insurer licensed to insure mortgage guaranty risks in this
   Commonwealth.

B. Any loan made pursuant to &#xA7;&#xA7; 38.2-1434 through 38.2-1436 not in
compliance with the requirements of subsection A of this section shall be
classified as a Category 2 investment in its entirety.

C. The fair market value of the real estate interest mortgaged shall be
determined by a written appraisal of at least one competent real estate
appraiser as of the date of the initial loan commitment, which appraiser shall
not be an employee of the insurer nor an employee of any company controlled by
or under common control with the insurer. If the loan commitment is revised to
reflect a change in the value of the real estate, the fair market value shall be
determined as of the date of that revision.

D. Buildings and other improvements on the mortgaged premises shall be insured
against fire loss for the benefit of the mortgagee in an amount not less than
the lesser of their insurable value or the unpaid principal balance of the
obligation.

E. The maximum term of any mortgage or deed of trust referred to in &#xA7;&#xA7;
38.2-1434 through 38.2-1436 secured by real property primarily improved by a
single-family residence shall not exceed thirty years.

F. A domestic insurer shall not invest, under &#xA7;&#xA7; 38.2-1434 through
38.2-1436, more than two percent of its admitted assets, directly or indirectly,
in mortgages covering any one secured location, nor more than four percent in
the mortgages of any one obligor.

HISTORY: 1983, c. 457, § 38.1-217.40; 1986, c. 562; 1992, c. 588.