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Federal Register / Vol. 86, No. 102 / Friday, May 28, 2021 / Rules and Regulations March 1, 2020 not after March 1, 2020. 33
In 36.4805e4, VA is replacing the term borrower with the term veteran to remain consistent with other sections in Subpart F. With the exception of references that include coborrowers or non-borrowers who may hold title to the property, VAs intention is to use the term veteran throughout.
IV. Section-by-Section Analysis of the Final Regulatory Amendments As discussed in the proposed rule, the COVIDVAPCP is a temporary program to help veterans return to making normal loan payments on their guaranteed loans after exiting a COVID
19 forbearance period.34 The proposed rule further noted that VAs existing home retention, loss-mitigation, alternatives to foreclosure, and other servicing regulations and policies remain in effect.35 Thus, to avoid confusion, VA is adding a new subpart F to part 36 of the Code of Federal Regulations CFR to contain the regulations that govern this temporary program.36
The following outlines the new subpart F, as prescribed under this final rule, with further explanation of each individual section, as appropriate.
A. 36.4800

Applicability
In 36.4800, VA notes that this subpart applies to all loans guaranteed by VA, to the extent such loans are affected by the COVID19 national emergency.
There is no change from the proposed rule to this section.
B. 36.4801

Definitions
In 36.4801, VA sets forth the definitions applicable to new subpart F.
VA defines alternative to foreclosure, COVID19 forbearance, COVID19 indebtedness, Guaranteed loan, Loss-mitigation option, Secretary, and Servicer as set out in the regulatory text below.
Changes in this section replace certain references to the CARES Act with COVID19. These changes align the scope of the COVIDVAPCP with the coordinated federal response to veterans prolonged financial hardship, as discussed in section III.A. above.
33 See 85 FR 79142, 79160 Dec. 9, 2020
emphasis added.
34 See 85 FR 79142 Dec. 9, 2020.
35 85 FR 79142, 79148 Dec. 9, 2020.
36 85 FR 79142 Dec. 9, 2020.

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C. 36.4802 General Purpose of the COVID19 Veterans Assistance Partial Claim Payment Program In 36.4802, VA sets forth the general purpose of the COVIDVAPCP.
Intending to provide some introductory context for this novel option within VAs home loan program, VA states that the COVIDVAPCP is a temporary program to help veterans who have suffered a COVID19 financial hardship.
Notwithstanding the requirements elsewhere in part 36 regarding payment of a guaranty claim or refunding a loan, this section allows VA to assist a veteran exiting a COVID19 forbearance by purchasing from the servicer the veterans COVID19 indebtedness. Such a purchase is called a partial claim payment. In exchange for VAs partial claim payment on behalf of the veteran, the veteran must agree to repay the Secretary, in the amount of such partial claim payment, upon loan terms established by the Secretary.
The only changes to this section from the proposed rule include conforming amendments associated with the definitional changes in 36.4801. See section IV.B. above.
D. 36.4803 General Requirements of the COVID19 Veterans Assistance Partial Claim Payment Program In 36.4803, VA sets forth the general requirements of the COVIDVAPCP.
First, VA requires that the loan for which a partial claim payment is requested must be a guaranteed loan that was either current or less than 30
days past due on March 1, 2020, or was made on or after March 1, 2020. Second, VA requires that the veteran on whose behalf VA will pay a partial claim payment both received a COVID19
forbearance and missed at least one scheduled monthly payment. Third, VA
requires that there remains unpaid at least one scheduled monthly payment that the veteran did not make while under a COVID19 forbearance. Fourth, VA requires the veteran to indicate that the veteran can resume making scheduled monthly payments, on time and in full, and that the veteran occupies, as the veterans residence, the property securing the guaranteed loan for which the partial claim is requested.
Lastly, VA requires the veteran to execute, in a timely manner, all loan documents necessary to establish an obligation to repay the Secretary for the partial claim payment.
This section incorporates changes VA
is making in response to commenter concerns about the COVIDVAPCP
evaluation and application process. As discussed in section II of this final rule,
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veterans must only indicate, not certify, as to their ability to resume making scheduled monthly payments and their occupancy of the property securing the guaranteed loan. Similarly, servicers are not required to certify as to the adequacy of the veterans monthly residual income based on a financial evaluation. Also, in response to comments discussed above, VA is clarifying that the final rule expressly allows veterans whose loans were made on or after March 1, 2020 to receive assistance, provided all other requirements are met. See section III.B.
above. VA is also making conforming amendments associated with the definitional changes in 36.4801. See section IV.B. above.
E. 36.4804 Partial Claim Payment as a Home Retention Option In 36.4804, VA reiterates that the COVIDVAPCP is designed to address the financial hardships due, directly or indirectly, to the COVID19 national emergency. This section states that a servicer may therefore use the partial claim payment option, even in cases where other home retention options are feasible, provided the partial claim payment option is in the veterans financial interest. This section also allows the servicer to immediately proceed to offering an alternative to foreclosure if the veteran notifies the servicer that the veteran does not want to retain ownership of the property securing the guaranteed loan.
Changes in this section, including changes to the section heading, are in response to commenter concerns as discussed in section II.D. above.
F. 36.4805
Payment
Terms of the Partial Claim
In 36.4805, VA sets forth the terms of the partial claim payment. In paragraph a, in order for a partial claim payment to be payable, the servicer must submit to the Secretary, not later than 120 days after the date the veteran exits the COVID19 forbearance, a request for such payment, as prescribed in 36.4807. Paragraph b of this section states that the amount of the partial claim payment that VA will pay to the servicer, as calculated under paragraph e, shall not exceed 30
percent of the unpaid principal balance of the guaranteed loan. For the purposes of paragraph b, the unpaid principal balance of the guaranteed loan means such balance as of the date the veteran entered into a COVID19 forbearance.
Paragraph c states that VA will pay only one partial claim payment per guaranteed loan. Paragraph d states
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