VA Home Loan Requirements for Home Inspection – A Detailed Guide

Purchasing a home with a VA home loan comes with certain requirements for home inspection that buyers should be aware of As a VA homebuyer, understanding these requirements is key to ensuring your loan process goes smoothly In this comprehensive guide, we’ll walk through everything you need to know about VA home inspection requirements.

Overview of VA Home Inspection Process

When applying for a VA home loan, the home you wish to purchase must meet the VA’s Minimum Property Requirements (MPRs). These requirements are in place to ensure the home is safe, structurally sound, and sanitary.

As part of the loan process, a VA-approved fee appraiser will visit the home and make note of any repairs needed for the home to meet MPRs. It’s important to understand that the appraiser’s inspection is not as comprehensive as a home inspection. The appraiser is focused on identifying deficiencies related to MPRs, not providing a detailed inspection of all the home’s systems and components.

After the appraisal is complete, you will receive a Notice of Value (NOV) that recommends obtaining a professional home inspection. This allows a more thorough investigation of the home’s condition beyond basic MPRs.

Key Points on VA Appraisal Inspections

Here are some key things to understand about the inspection performed during the VA appraisal:

• Appraisal vs home inspection The appraiser is estimating the home’s value, not performing an operational check of all systems A home inspection is still recommended after the appraisal.

• MPR deficiencies: The appraiser will note repairs needed for MPR compliance and condition the appraisal on completion of repairs. Cosmetic repairs are not required.

• Inspections vs. repairs Appraisers recommend repairs to meet MPRs not further inspections.

• Prompt notification: If the appraiser finds an MPR issue that makes the home ineligible, they must promptly notify the lender.

• Detached buildings: Outbuildings are subject to MPRs. Those not meeting MPRs must be excluded from value.

• Home inspection recommendation: The NOV advises buyers to consider obtaining a professional home inspection.

Common VA Minimum Property Requirements

While not exhaustive, here are some key areas appraisers will be evaluating for MPR compliance:

• Access: Home must have safe pedestrian or vehicular access from a public or private street. Private roads must have permanent easement and maintenance agreement.

• Zoning: Home must comply with all applicable zoning ordinances. Non-conforming uses must be identified.

• Structure: Home must be structurally sound and provide safe living conditions. Any structural deficiencies must be repaired.

• Mechanical systems: Home must have adequate electrical, heating, plumbing, and sewage systems. Systems must be functional but do not need to be turned on during appraisal.

• Roof: Roof must prevent entrance of moisture. Any defective roofing materials must be replaced.

• Foundation: Foundation must be adequate to withstand normal loads and conditions in the area. Any evidence of settling must be inspected and repaired.

• Water and sewer: Home must have safe water supply, hot water, and sanitary sewage disposal. Individual wells and septic systems have additional requirements.

• Hazardous conditions: Home cannot have any unmitigated hazards such as soil instability, flooding, environmental contamination, or other conditions that endanger health and safety.

• Infestation: Any visible evidence of wood destroying insects or organisms must be treated and repaired.

Key Tips for the VA Appraisal Inspection

As the buyer, here are some helpful tips for making the most of the VA appraisal inspection:

• Provide utility service – Having utilities on can allow systems to be inspected during the appraisal.

• Declutter and clean – A cluttered home can make it difficult to inspect areas. Deep cleaning can reveal underlying issues.

• Disclose information – Inform the appraiser ahead of time if you are already aware of any defects, repairs needed, etc.

• Ask questions – Don’t interrupt the appraiser during their work, but ask questions at the end to understand their findings.

• Review the report – Carefully go over the appraisal after completion to ensure you understand any MPR repairs required.

Understanding the Professional Home Inspection

While the VA appraisal will identify basic MPR deficiencies, a professional home inspection delivers much deeper analysis of the home’s condition. Here’s an overview of this important process:

• Comprehensive evaluation: The inspector will thoroughly evaluate all aspects of the home – roof, foundation, structure, mechanics, plumbing, electrical systems, etc.

• Operational checks: Systems will be activated and tested hands-on – running faucets, flushing toilets, turning on appliances, checking outlets, etc. This goes well beyond a visual inspection.

• Technical expertise: Home inspectors have specialized knowledge and tools for assessing a home’s condition. VA appraisers are focused on valuation, not home condition.

• Negotiating repairs: A home inspection gives you leverage to re-negotiate repairs with the seller based on issues found. VA appraisal repairs cannot be re-negotiated.

• Informed buying: The inspection provides detailed information to make an informed purchase decision, potentially saving you from expensive issues post-closing.

When selecting a home inspector, make sure to pick a licensed professional insured and experienced with your home type. Your real estate agent can provide inspector referrals.

The Repair Process

For any repairs required by the VA appraiser, here is an overview of how the process works:

• The appraiser will note MPR repairs required in the report and condition the appraisal on completion.

• You or your real estate agent will typically handle coordinating completion of repairs.

• The appraiser must be provided evidence of repair completion, such as receipts or re-inspection.

• The lender will confirm repairs are finished before finalizing loan approval.

• Cosmetic repairs cannot be required by the appraiser, but lenders may request remedies to those on a separate repair rider.

• Repairs must be made by licensed and bonded contractors in most cases.

As the buyer, you have the right to personally complete the repairs to save on costs as long as permitted by the lender. Make sure to consult your agent and lender regarding the repair process.

VA Requirements Beyond the Appraisal

While the appraisal inspection focuses on MPRs, keep in mind there are various other VA requirements you’ll need to fulfill to obtain your loan:

• Underwriting: Loan qualification based on income, assets, credit history and overall financial health.

• Loan limits: Maximum loan amount determined by county limits on VA guaranty.

• Funding fee: Upfront fee that can sometimes be rolled into loan amount. Percentage varies based on military service.

• Occupancy: Must certify you intend to occupy home as primary residence.

• Home loan training: Most borrowers must complete training like VA’s Home Loan Basics course.

Make sure to consult your lender early about all VA requirements to avoid surprises that delay closing.

Takeaways on VA Appraisal and Home Inspection

Purchasing a home is a big responsibility. While the VA helps make homeownership more accessible for service members and veterans, buyers still must educate themselves on the process. Understanding VA appraisal and inspection requirements is an important first step after finding the home you wish to buy with your VA loan. By knowing these guidelines upfront, you can help facilitate a smooth loan approval and identify any repairs needed to make your home safe and livable for the long-term.