                                 CODE OF VIRGINIA

PRIORITY OF RESIDENTIAL REFINANCE MORTGAGE OVER SUBORDINATE MORTGAGE (§
55.1-319)

A. As used in this section:
			&#8220;Prior mortgage&#8221; means a mortgage, deed of trust, or other
instrument encumbering or conveying an interest in residential real estate
containing not more than one dwelling unit to secure a financing.
			&#8220;Refinance mortgage&#8221; means a mortgage, deed of trust, or other
instrument encumbering or conveying an interest in residential real estate
containing not more than one dwelling unit to secure a refinancing.
			&#8220;Refinancing&#8221; means the replacement of a loan secured by a prior
mortgage with a new loan secured by a refinance mortgage and the payment in full
of the debt owed under the original loan secured by the prior mortgage.
			&#8220;Subordinate mortgage&#8221; means a mortgage or deed of trust securing
an original principal amount not exceeding $150,000, encumbering or conveying an
interest in residential real estate containing not more than one dwelling unit
that is subordinate in priority (i) under subdivision A 1 of &#xA7; 55.1-407 or
(ii) as a result of a previous refinancing.

B. Upon the refinancing of a prior mortgage, a subordinate mortgage shall retain
the same subordinate position with respect to a refinance mortgage as the
subordinate mortgage had with the prior mortgage, provided that:

   1. Such refinance mortgage states on the first page thereof in bold or
   capitalized letters: &#8220;THIS IS A REFINANCE OF A (DEED OF TRUST, MORTGAGE
   OR OTHER SECURITY INTEREST) RECORDED IN THE CLERK&#8217;S OFFICE, CIRCUIT
   COURT OF (NAME OF COUNTY OR CITY), VIRGINIA, IN DEED BOOK ______, PAGE ______,
   IN THE ORIGINAL PRINCIPAL AMOUNT OF ______, AND WITH THE OUTSTANDING PRINCIPAL
   BALANCE WHICH IS ______ WHICH HAD AN INTEREST RATE OF ___% PER ANNUM.&#8221;;

   2. The principal amount secured by such refinance mortgage does not exceed the
   outstanding principal balance secured by the prior mortgage plus $5,000; and

   3. The interest rate of the refinance mortgage at the time it is recorded does
   not exceed the interest rate of the prior mortgage. The interest rate of the
   prior mortgage shall be stated on the first page of the refinance mortgage.

C. The priorities among two or more subordinate mortgages shall be governed by
subdivision A 1 of &#xA7; 55.1-407.

D. The provisions of subsection B shall not apply to a subordinate mortgage
securing a promissory note payable to any locality or any agency, authority, or
political subdivision of the Commonwealth if such subordinate mortgage is
financed pursuant to an affordable dwelling unit ordinance adopted pursuant to
&#xA7; 15.2-2304 or 15.2-2305, or pursuant to any program authorized by federal
or state law or local ordinance or resolution, for (i) low-income and
moderate-income persons or households or (ii) improvements to residential
potable water supplies and sanitary sewage disposal systems made to address an
existing or potential public health hazard, and which mortgage, if recorded on
or after July 1, 2003, states on the first page thereof in bold or capitalized
letters: &#8220;THIS (DEED OF TRUST, MORTGAGE OR OTHER SECURITY INTEREST) SHALL
NOT, WITHOUT THE CONSENT OF THE SECURED PARTY HEREUNDER, BE SUBORDINATED UPON
THE REFINANCING OF ANY PRIOR MORTGAGE.&#8221;

HISTORY: 2000, c. 971, § 55-58.3; 2002, c. 172; 2003, c. 381; 2011, c. 77;
2014, c. 338; 2019, c. 712; 2021, Sp. Sess. I, c. 13.