Purchasing a home is likely one of the biggest financial decisions you’ll make in your lifetime. This is especially true for veterans and active-duty service members utilizing their VA home loan benefit. Navigating the various VA loan requirements can feel overwhelming for first-time buyers.
One key part of the VA loan process is the property appraisal and inspection Do you know the difference between these two assessments? What are the key VA minimum property requirements your home must meet?
This guide breaks down the latest VA inspection requirements for 2023 We’ll explain the role of the VA appraisal, highlight key changes for this year, and provide tips to ensure your home passes muster
Overview of VA Appraisals
When you apply for a VA-backed mortgage, an appraisal of the home is always required. This is completed by a third-party VA appraiser.
The appraisal has two main purposes
- Determine the property’s fair market value for lending purposes
- Confirm the home meets VA minimum property requirements
The appraised value determines the maximum mortgage amount you can borrow. The appraisal also protects veterans from investing in homes that are structurally unsound or overvalued.
VA appraisals are similar to conventional appraisals but go a step further by inspecting for VA-established minimum property requirements.
Are Home Inspections Required for VA Loans?
Unlike the appraisal, a home inspection is not required to close on a VA loan. However, it’s highly recommended by most lenders and real estate professionals.
A home inspection provides a much more comprehensive evaluation of the property’s physical condition. While the appraisal focuses largely on safety and structural soundness, an inspection looks at functionality, mechanical systems, potential issues, useful life of components, and more.
Plan to budget $300-$500 for a professional home inspection in most housing markets.
Changes to VA Appraisals in 2023
The VA has not announced any major changes to the appraisal process or minimum property requirements for 2023. However, there are a few key points to be aware of:
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High demand continues for VA appraisers, which can sometimes lead to delays in getting an appraisal scheduled and completed. Build some extra time into your transaction.
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Rising interest rates may result in lower appraised values compared to contract prices. Be prepared for the possibility of an appraisal gap.
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As always, a smooth appraisal rests heavily on the condition of the home. Prevent surprises by completing any needed repairs before listing your home.
Barring any last minute VA guidance, the appraisal process and minimum property requirements remain consistent with previous years.
Overview of VA Minimum Property Requirements
The VA’s minimum property requirements aim to ensure the home is safe, structurally sound, sanitary, and worth the purchase price. Some key requirements include:
- Adequate living space for occupants
- Access to electricity, water, sewer, and other utilities
- No environmental hazards or contamination
- Proper drainage away from the structure
- No wood destroying insects, dry rot, or pest damage
- Functional cooling and heating systems
- A roof in generally good condition
- No chipping or peeling lead-based paint
The full list contains over 20 items assessed by the appraiser. But the focus is on safety, livability, and structural integrity. Cosmetic issues are not dealbreakers.
What if the Home Doesn’t Pass the VA Appraisal?
While not common, it’s possible for a home to fall short of the VA’s minimum property requirements. This may be due to a structural issue, standing water in the basement, pest infestation, or any number of problems uncovered by the appraiser.
If this happens, you have a few options:
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Cancel the sale – If repairs will be too costly or burdensome, you can walk away.
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Request repairs – The seller can complete repairs and apply for a re-inspection showing issues have been fixed.
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Ask for a waiver – In some cases, minor MPR issues can be waived so the loan can still proceed.
Don’t take a failed VA appraisal lightly. Significant problems could become headaches and financial burdens if you move forward with buying the home as-is.
Tips for Passing the VA Appraisal
Follow these tips to help ensure a smooth appraisal process:
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Maintain your home – Tackle repairs and upgrades before listing. Curb appeal and interior condition matter.
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Allow access – Inform tenants or occupants that the appraiser will need full access to the property.
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Provide info – Have repair invoices, inspection reports, HOA docs, and other details on hand for the appraiser.
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Consider an inspection – An inspection prior to listing can identify issues to correct upfront.
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Be available – The appraiser may have questions during their visit that you can answer right away.
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Review carefully – Look over the appraisal report when received. Follow up on any concerns right away.
With proper preparation and maintenance, most properties should be able to satisfy the VA’s requirements.
VA Appraisal vs Home Inspection
To recap the key differences:
VA Appraisal
- Required for all VA loans
- Checks fair market value
- Confirms minimum property requirements are met
- Completed by a VA-approved appraiser
Home Inspection
- Not required, but highly recommended
- Much more detailed examination of the home
- Looks at functionality, systems, defects, useful life, etc.
- Completed by a licensed home inspector
The appraisal and inspection serve different purposes but can be used together to give the buyer confidence in their purchase.
Common VA Appraisal and Inspection FAQs
How much does a VA appraisal cost?
Plan on $500-$600+ in most cases. The buyer pays this fee.
How long are VA appraisals valid?
The appraisal must be dated within six months of closing. Appraised values are highly dependent on current market conditions.
Can I choose my own appraiser for a VA loan?
No, the lender assigns an approved VA appraiser. This helps avoid inflated valuations.
How long does the appraisal take?
The appraiser is required to complete the inspection within five business days. You’ll receive a copy within one business day after that.
Should I be present for the appraisal?
It’s not required, but you can accompany the appraiser to point out home features and provide documents.
The Bottom Line
Understanding the VA loan appraisal process will help you set proper expectations. While not overly stringent, the VA does have minimum home requirements designed to protect veteran buyers. Take time to prepare your home before listing.
Ahead of closing, be sure to review the appraisal thoroughly and follow up on any concerns right away. Reach out to your lender with any questions about meeting the property requirements for your VA loan.
VA Minimum Property Requirements
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Does A VA Loan Require A Home Inspection?
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