If you are looking to learn about VA loan inspection requirements, you won’t find any. Truth be told, the VA loan system does not require home inspections before deciding whether you are eligible or not. They do, however, require appraisals, but that is a different kettle of fish. We will explain that later. What’s important to recognize is that the home inspection protects you, veterans or active-duty military members, as you hunt for a home. So don’t skip this step.
If the VA loan process does not have VA loan inspection requirements, why bother? Because the VA is only half of the equation of finding and qualifying for a mortgage for your new home. The other half of the equation is a VA-qualified lender, a private mortgage broker or bank, who actually lend you the money. The U.S. Department of Veterans Affairs only insures and guarantees the loan. We say “only” but that insurance is a pretty big deal.
Private lenders are going to request and require additional information about your life and your purchase in order to approve the mortgage. Credit scores, credit history, income history and loan history are things the private lender will likely require before finalizing a mortgage with you. VA loan inspection requirements may become part of the mortgage lenders expectations for you to qualify for a loan.
What they won’t require, when the VA insures your mortgage, is the down payment and private mortgage insurance (PMI), and those two elements will save you thousands of dollars up front and thousands more over the life of your mortgage when compared to a conventional loan. In addition, you will probably get a lower interest rate on your loan with the federal government VA guarantee, saving you money every month.
Purchasing a home is likely one of the biggest financial decisions you’ll ever make. When getting a mortgage you want to make sure you fully understand all the requirements especially when it comes to inspections. This is particularly true for VA loans, which have specific guidelines. So does a VA loan require an inspection?
The short answer is no. VA loans do not require a home inspection. However, they highly recommend getting one. Let’s take a closer look at VA loan inspection requirements and why home inspections are still a smart idea.
VA Loan Basics
First, let’s go over some VA loan basics. VA loans are mortgages guaranteed by the Department of Veterans Affairs. They allow eligible military members, veterans, and surviving spouses to purchase a home with little to no down payment.
VA loans offer significant advantages, including:
- No monthly mortgage insurance payments
- No down payment required
- Lower interest rates
- Relaxed credit score requirements
- Ability to roll closing costs into the loan
However VA loans do come with certain requirements, such as getting a VA appraisal.
VA Appraisals vs. Home Inspections
While VA loans don’t require a home inspection, they do require a VA appraisal. Many buyers confuse VA appraisals with inspections, but they serve different purposes.
What is a VA Appraisal?
A VA appraisal is ordered by the lender to determine the property’s fair market value. The appraiser will visit the home take measurements, assess its condition and compare it to similar homes recently sold nearby.
VA appraisals also ensure the property meets the VA’s minimum property requirements (MPRs). The MPRs cover things like:
- Adequate living space
- Access to utilities
- Structural soundness
- Proper drainage
- Absence of health/safety hazards
If the appraisal uncovers issues that mean the home doesn’t meet MPRs, the buyer may be able to cancel the purchase.
What is a Home Inspection?
While VA appraisals evaluate basic property conditions, a home inspection is much more comprehensive. An inspector will examine all mechanical, electrical, and structural systems, including:
- Roof, attic, and exterior
- Foundations and basements
- Heating and cooling systems
- Plumbing and electrical
- Potential safety issues like mold, asbestos, etc.
The inspection produces a detailed report summarizing the home’s condition. This allows buyers to make an informed decision about purchasing the property or requesting repairs from the seller.
Are Home Inspections Required for VA Loans?
While highly recommended, home inspections are not required to get a VA loan. Some key points about VA loan inspection requirements:
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VA appraisals are mandatory – The lender will order a VA appraisal on every property. This ensures it meets MPRs for VA financing.
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Inspections are optional – The VA does not require a whole-home inspection. This is up to the buyer’s discretion.
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Inspections add a layer of protection – Though not required, inspections help buyers make informed decisions and potentially avoid expensive surprises down the road.
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Inspections are standard procedure – Most real estate agents strongly advise buyers to get an inspection, even when not required by the mortgage lender. It’s considered a best practice.
So you can get a VA loan without getting a home inspection, but it’s typically recommended. Many buyers choose to get inspections for peace of mind and to fully evaluate the property before purchasing.
Timing of VA Inspections
If you do plan to get an inspection, when’s the best time to schedule it? Here are some guidelines:
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After the purchase agreement – You’ll want to inspect after an offer is accepted, not before. Inspections are usually a contingency, allowing you to back out based on findings.
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ASAP after going under contract – Don’t wait, book the inspection right away so any issues can be addressed quickly. This prevents delays.
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Before appraisal – Try to inspect before the VA appraisal. This allows time to get repairs done if the appraisal uncovers problems.
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With enough time before closing – Build in buffer time in case repairs are needed. You don’t want to be making repairs at the last minute.
Follow these tips, and you’ll be able to take full advantage of the inspector’s findings before closing.
What if the Home Fails Inspection?
What happens if the inspection turns up significant problems? As the buyer, you have a few options:
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Request the seller make repairs – Ask the seller to fix issues found during inspection at their own expense. Be reasonable – minor fixes are expected, but major issues may require negotiation.
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Cancel the purchase – For deal-breaking problems, you may back out of the purchase completely and get your earnest money back.
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Negotiate credits or a lower price – If repairs would be costly, the seller may agree to offset them with closing credits or a reduced home price.
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Accept flaws and buy the home as-is – If defects don’t bother you, or the home is a bargain, you could waive your inspection objections and finalize the sale.
Keep in mind inspections usually come with contingency clauses that offer these protections if problems do pop up.
The Takeaway
While technically not required, home inspections are highly recommended for VA loans. They offer home buyers extra assurance by thoroughly evaluating the property’s condition from top to bottom.
Inspections also provide leverage to renegotiate the deal if significant flaws are revealed. So for buyers who want in-depth information before purchasing, a home inspection can bring valuable peace of mind.
It’s Just a Regular Inspection
Chances are your private lender you work with is going to require a home inspection of the property you want to buy, so don’t worry too much about missing this step. What kinds of things are involved in a typical, traditional inspection? There we turn to the International Association of Certified Home Inspectors (InterNACHI). They have two lists.
The first list is an overview of the major elements a home inspector will be looking at. It includes things such as:
- Heating system inspection
- Cooling systems and air conditioning inspection
- Home Energy inspection
- Mold and dry rot inspection
- Pool and spa inspection
- Radon inspection
- Sewer inspection
- Pest inspection (including wood-destroying insects)
- Electrical systems inspection
- Appliance inspection
- Fireplace and chimney inspection
- Plumbing and water heater inspection
The second list is more involved. It’s a comprehensive checklist from InterNACHI that goes for 31 pages listing all of the things an inspector checks.
There is also our own list of things you should ask your inspectors before, during and after the inspection happens.
No VA Loan Inspection Requirements, But an Appraisal Is
Finding information about VA home loan inspection requirements can be confusing because a lot of folks think a home inspection is the same as a home property appraisal. It’s easy to do. There is a lot of overlap between what a home inspector looks for when he or she is evaluating your property and what a home appraiser is looking for. But the differences are important.
The first fact to remember is that the VA loan program requirements do include an appraisal. You need to hire and pay for a VA appraisal process. Its requirements can be found on the VA appraisal checklist.
The second thing to remember is the difference between an appraisal and an inspection.
The appraiser is looking at the home you want to buy and evaluating it for the property’s value — it’s appraised value. They want to know what the house is worth in terms of dollars and cents. With that in mind, they will look at comparable similar homes, bedrooms, baths, square footage and everything that affects the value of the house. The appraiser is doing his job to protect the interests of the bank. They don’t want to lend you more money than the value of the property, for obvious reasons.
The inspector, on the other hand, is there to make sure your house is safe and up to local building codes. They typically dig deeper into the property and its structural issues. Inspectors are there to protect you from buying a money pit, a property that has so many hidden major issues that you will need to fix that it will create major financial and safety issues for you in the future.
Home appraisers protect the lender; while home inspectors protect you and your family.
So even though there are no VA loan home inspection requirements, it’s still a good idea to get one for your own protection.
It’s important to note that there will be some overlap in what appraisers and inspectors are looking for. For example, they will both look at the roof and any structural problems. Both will be concerned that the appliances are in good condition. Both will evaluate plumbing for potential problems. They will simply be looking at the property for different reasons.
VA loan inspection requirements | Is it as bad as they say?
FAQ
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Do VA loans require a home inspection?
In her spare time, Miranda enjoys traveling, actively engages in the entrepreneurial community, and savors a perfectly brewed cup of coffee. VA loans don’t require a home inspection, but they do require an appraisal to ensure a property is livable. Learn more about VA loan appraisal requirements.
What are the inspection requirements for a VA loan?
Inspection Requirements. In accordance with Title 38, Code of Federal Regulations (CFR), Section 36.4350(i), loan servicers are responsible for inspecting the property securing a VA-guaranteed loan immediately after becoming aware that its physical condition may be in jeopardy.
What is a VA home inspection & VA appraisal?
VA loans are designed to help eligible veterans, active-duty service members and surviving spouses achieve homeownership. When taking out a VA loan, you’ll likely come across the terms “VA home inspection” and “VA appraisal.” While the two assessments sound the same, they have some differences.
Do VA loans require a pest inspection?
For instance, VA loans require a separate pest inspection in certain geographic areas. Appraisers may also require further inspections if they suspect specific problems with the property. If your appraisal uncovers problems that need further inspection, your VA lender can help connect you with an appropriate expert.
Should a VA appraisal be considered a full home inspection?
The appraiser must make sure the home meets the VA’s minimum property guidelines and that it’s in good enough condition that it won’t require substantial repairs. The VA appraiser provides their findings in an appraisal report. However, there are still some limitations to a VA appraisal, and it shouldn’t be treated as a full home inspection.
Do I need an appraisal for a VA home loan?
An appraisal is required for all VA purchase loans. A VA home inspection is a more thorough inspection of home systems and aims to provide a detailed report on the condition of the home, listing any current or potential problems. It is not required by the VA but is highly recommended.