CHAPTER 438

An Act to amend the Code of Virginia by adding a section numbered
6-848.4, relating to charges which may be made by certain financial
institutions on certain loans.
Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia be amended by adding a section numbered
6-348.4 as follows:

§ 6-348.4. (1) Any bank or any other lender engaged in making
loans to finance the construction or improvement of business, residential
or farm real estate may charge a borrower and collect in advance, super-
vision and inspection charges not to exceed that allowed by the Federal
Housing Administration, or the Commissioners thereof, under or pur-
suant to the provisions of the National Housing Act, approved June 27,
1934, and amendments thereto as in effect on January 1, 1964. In lieu of
charging such fee for supervision and inspection of construction or
improvement, such bank or lender may require the borrower to pay the
actual cost and expenses of such supervision and inspection.

(2) Any bank or lender engaged in making real estate mortgage or
deed of trust loans, may charge a borrower and collect in advance proc-
essing and investigation charges not to exceed that allowed by the Federal
Housing Administration, under or pursuant to the provisions of the
National Housing Act, approved June 27, 1934, and amendments thereto
as in effect on January 1, 1964. If the bank or lender provides both con-
struction financing under subsection (1) hereof, and permanent financing
under this subsection, its charges shall not exceed the maximum amount
allowable under subsection (1).

(8) Any such bank or lender may also require the borrower to pay
to or for the account of the person entitled thereto the reasonable and
necessary charges of third persons or other out-of-pocket expenses in
connection with making the loan, including the cost of title examination,
title insurance, recording fees, taxes, insurance, appraisals, credit reports,
surveys, and attorneys’ fees.

(4) Such bank or lender may also charge a reasonable penalty to a
borrower for making a late payment on his loan provided the amount of
the penalty is specified in the contract between the bank or lender and the

rrower.

(5) Such charges shall not be considered in determining whether a
contract for loan or forbearance of money or other things is illegal
within the meaning of Title 6 of the Code; provided, however, the charges
permitted hereunder may not be made in addition to charges otherwise
lawful under §§ 6-348.3 and 6-351.1.