An Act to amend and reenact § 6.2-419 of the Code of Virginia, relating to the assumption of a mortgage or deed of trust; conventional home mortgage loans required to include assumption provisions.
HB304 amends Virginia law governing the assumption of mortgages and deeds of trust for certain residential properties. The bill preserves an owner’s right to request written disclosure from the lender about whether a qualified purchaser may assume an existing mortgage, and it requires the lender to provide specified terms if assumption is allowed, including interest rate, escrow balance, fees, limitations, and other pertinent conditions. It also keeps the lender’s obligation to respond within 10 business days and allows a modest fee for repeated requests within a 12-month period.
The bill’s main new policy change is that, for conventional home mortgage loans secured on or after July 1, 2026, lenders must include an assumption provision allowing one existing borrower to buy out another borrower’s interest by assuming that seller’s share of the mortgage in connection with an annulment or divorce, so long as the assuming borrower qualifies for the loan. Lenders must disclose this requirement to applicants within three days of receiving a completed application. The bill excludes federally insured or guaranteed mortgages and does not apply where assumption in divorce is already required by state or federal law.
HB304 updates § 6.2-419 of the Code of Virginia by expanding assumption-related protections for owner-occupied residential real estate with four or fewer dwelling units. It imposes a new disclosure and contract-term requirement on conventional home mortgage loans originated on or after July 1, 2026, affecting lenders, borrowers, and real estate transactions involving divorce or annulment. The measure is aimed at making mortgage assumptions more transparent and more available in qualifying domestic-relations situations, while leaving federally backed loans outside its scope.
The available record shows no committee transcript or recorded vote data, so there is no documented debate or opposition in the provided materials. Based on the enacted text, the bill appears to reflect a generally consumer- and borrower-friendly policy approach, especially for homeowners facing divorce or annulment. The absence of recorded controversy suggests the measure may have been noncontroversial or at least not heavily contested in the materials provided.
The principal policy issue embedded in HB304 is the extent to which lenders should be required to permit mortgage assumptions and disclose those terms in advance. Potential points of contention include the added compliance burden on lenders, the limitation to conventional loans rather than federally insured or guaranteed mortgages, and the requirement that the assuming borrower qualify under the lender’s underwriting standards. Another possible issue is the bill’s focus on divorce and annulment, which may raise questions about how broadly assumption rights should extend beyond domestic-relations contexts.