VA Home Loan Inspection Guidelines: Everything You Need to Know

Buying a home is likely one of the biggest financial decisions you’ll ever make. When using a VA home loan, it’s important to understand the inspection guidelines and processes to ensure your new home meets VA standards. As your trusted VA home loan resource, I’ll walk you through key details on VA appraisals, minimum property requirements (MPRs), and typical repairs needed to meet MPRs.

Overview of VA Home Loan Inspection Process

The VA home loan process involves two key inspections:

• VA Appraisal – A VA-approved appraiser inspects the home’s interior and exterior to determine the market value They note any repairs needed for safety and soundness

• MPR Inspection – The appraiser also checks if the home meets VA minimum property requirements (MPRs). MPRs relate to the home’s safety, security, functionality, and marketability.

It’s important to understand VA appraisals are not the same as home inspections. The appraiser estimates value, but does not do operational checks of systems and appliances I recommend all VA loan borrowers get a professional home inspection to evaluate mechanicals and identify any hidden issues

Now let’s explore key details on VA appraisals and MPRs.

VA Appraisal Process and Requirements

The VA appraisal serves two main purposes:

• Determine the home’s fair market value to ensure the loan amount is justified.
• Check if the home meets VA minimum property requirements to be safe, sound, and sanitary.

Here are key facts on VA appraisals:

• Completed by a VA-approved appraiser. There are over 15,000 approved nationwide.

• Requires both an interior and exterior inspection. Outbuildings and grounds are also inspected.

• Looks at the home’s condition, quality, appeal, amenities, and size compared to other homes in the area.

• Includes photos, floor plans, maps of the neighborhood, and commentary to support the estimated value.

• Results in a notice of value (NOV) stating the home’s fair market value and any repairs needed.

The appraiser notes any repairs needed to meet VA minimum property requirements. The NOV will be “subject to” completion of repairs. This means the value is based on repairs being finished.

Overview of VA Minimum Property Requirements

VA established minimum property requirements (MPRs) to protect the interests of veterans, lenders, and the VA. Properties must meet MPRs before the VA will guarantee a loan.

MPRs relate to:

• Safety and soundness (structural, mechanical systems)

• Functionality (adequate space, accessibility)

• Legal conformity (zoning, easements)

• Marketability (curb appeal, neighborhood)

The goal is ensuring the home is safe, secure, sanitary, and structurally sound. MPRs also cover environmental and legal factors that may affect marketability.

While appraisers note readily apparent repairs needed, they do not perform operational checks of systems and appliances. This underscores the importance of getting a professional home inspection.

Now let’s look at some typical MPR repairs the appraiser may require.

Common MPR Repairs Required by VA Appraisers

MPR repairs required by appraisers typically fall into these categories:

Structural – Unsafe or unsound foundation, framing, roofing, etc. Any major structural issues making the home unstable or unsafe.

Exterior – Peeling paint, damaged siding, cracked walls, improper drainage, fence repairs, etc. Issues that affect weather-tightness, safety, and marketability.

Mechanical – Malfunctioning HVAC systems, old electrical components, leaky plumbing, lack of running water or hot water. Major systems issues impacting safety and function.

Site – Fences in disrepair, overgrown landscaping, drainage issues leading to flooding, excessive cracking or settling of driveways, walkways or patios. Items affecting safety, accessibility and marketability.

Interior – Lack of proper ventilation or crawl space access, worn flooring, broken interior fixtures such as railings and cabinets. Issues making the home unsafe or unlivable.

Minor cosmetic issues like worn carpet or dated paint colors generally do not have to be repaired. The appraiser may note them but not require repairs. They’ll be reflected in the home’s overall condition rating.

MPR Repairs: Process and Next Steps

If the appraisal is “subject to” repairs, here’s the general process:

• Appraiser provides a list of required MPR repairs and estimated cost to complete.

• You can consult with a contractor to determine actual repair costs.

• An escrow holdback account is established to cover repair costs.

• After closing, you arrange for repairs to be completed within 90 days.

• The lender performs a final inspection to ensure repairs were done. Escrow funds are then released to reimburse you.

It’s important repairs are completed timely. Otherwise, the VA loan guarantee may be withdrawn putting you in breach of your loan terms. Communicate closely with your lender throughout the repair process.