A Complete Guide to VA Home Loan Inspection Requirements

Buying a home is likely the biggest purchase you’ll ever make. That’s why it’s so important to understand the home inspection requirements when getting a VA loan. In this comprehensive guide, we’ll explain everything you need to know about VA appraisals and minimum property requirements

What are VA Home Loan Inspection Requirements?

The Department of Veterans Affairs has established a set of minimum property requirements (MPRs) that a home must meet in order to qualify for a VA-backed loan.

These requirements help ensure that the home is safe livable and a sound investment for the buyer. A VA-approved appraiser will inspect the property and determine if it satisfies these baseline standards.

The VA does not require a separate home inspection, but this is typically recommended for buyers to have a thorough evaluation beyond just the minimum requirements.

Overview of Key VA Inspection Requirements

While we’ll cover the full details below, here’s a quick rundown of some of the main criteria a home must meet:

• Functioning electric, heating and cooling systems
• Adequate roof covering with remaining useful life
• No major structural or foundation defects
• Continuous water supply and sanitary facilities
• Safe sewage disposal system
• Access to home via all-weather road
• No wood destroying insects, fungus or dry rot
• No lead-based paint hazards
• Proper ventilation in attics and crawlspaces

Now let’s dive into the specifics of these VA minimum property requirements.

Complete List of VA Home Inspection Standards

The VA appraiser will assess all aspects of the home to ensure it meets the minimum property requirements. Here is the full list:

Marketable Real Estate

The home must be residential in nature up to 4 units and appeal to the general market. Unique property types are allowed if they follow local building codes.

Space Requirements

The home must have living, sleeping, cooking and sanitary facilities. There is no minimum square footage.

Access

There must be year-round access to the home via a public or private road. Private road access must have a permanent recorded easement.

Encroachments

Any encroachments on the property lines must be resolved before closing.

Drainage and Topography

The property must have proper drainage and grading with no flooding risks.

Geological or Soil Instability

The appraiser will check for any signs of soil or foundational instability that may affect safety or value.

Flood Hazard Area

Home cannot be located in a FEMA designated flood hazard area.

Coastal Barrier Resource System

Property cannot be located in a protected coastal barrier resource zone.

Non-Residential Use

Primary use must be residential. One accessory dwelling unit is allowed if zoning permits.

Zoning

Home must comply with all zoning laws. Non-conforming “grandfathered” properties may be acceptable.

Local Code Compliance

Appraiser will identify any repairs needed to meet local housing authority codes.

Utilities

All units must have access to electricity, gas, water, and sewer utilities.

Water Supply

There must be a continuous supply of safe drinking water adequate for the property.

Individual Water Supply

Individual well or water sources must provide potable water. Filtration may be required.

Sewage Disposal

There must be sanitary sewage disposal that doesn’t endanger health. Outhouses are allowed if customary.

Shared Wells and Sewage

Shared water and sewage systems must have maintenance agreements binding all users.

Hazards

The property must be free of any hazards that may threaten health, safety or enjoyment.

Defective Conditions

Any defective construction, pest damages, or deferred maintenance issues must be repaired.

Mechanical Systems

Heating, cooling and other equipment must be safe to operate.

Heating

Home must be able to maintain 50°F temperature. Suitable ventilation required for fireplaces and heaters.

Leased Equipment

Leased equipment like propane tanks are identified but not valued. Adverse impacts must be considered.

Alternative Energy

Solar, wind, geothermal systems are valued if not leased.

Roof Covering

Roof must have reasonable future utility. Evidence of leakage must be addressed.

Attics

Attics must be checked for adequate ventilation and absence of moisture.

Crawl Spaces

Crawl spaces must be properly vented and have adequate access.

Basements

Basements must be free of dampness and structural issues. Sump pump should be noted.

Swimming Pools

Pool equipment must be in working order. Above-ground pools contribute value if customary.

Burglar Bars

Burglar bars must have quick release mechanisms to allow emergency egress.

Lead-Based Paint

No peeling or chipping exterior paint. May require remediation on pre-1978 homes.

Wood Destroying Insects/Fungus/Rot

Property must be free of termites, fungus, dry rot or other wood destroyers.

Radon Gas

New construction must meet radon-resistant building code standards where applicable.

Environmental Hazards

Must be free of hazards like contaminated sites, storage tanks, etc.

Stationary Storage Tanks

Any large above/below ground storage tanks within 300 feet must be reported.

Mineral, Oil and Gas Rights

Any encumbrances to the property rights must be considered.

High Voltage Lines

Home cannot be located within an electric transmission line easement. Improvements within the easement are not valued.

Pipelines

Homes cannot be located within high pressure gas or petroleum pipeline easements.

Airport Influence

Nearby airports may negatively impact value. Comparable sales should be provided. Buyer must acknowledge impact.

As you can see, the VA property requirements cover all structural, mechanical, hazard and legal aspects of the home to ensure it is safe, sound and compliant with all codes and regulations.

While this list is comprehensive, unique property situations may also need to be addressed on a case-by-case basis.

What is the VA Appraisal Process?

The VA appraisal is performed by an independent, VA-approved appraiser. They will inspect the home and complete the report outlining its compliance with VA minimum property requirements.

Key parts of the appraisal process include:

• Exterior inspection – The appraiser will view all sides of the home from the street and yard checking for any visible defects.

• Interior inspection – The appraiser will tour the inside of the home to evaluate room layout, conditions and mechanical systems.

• Site analysis – The property site and surrounding area will be assessed including utilities, access, easements, zoning, influences and hazards.

• Photographs – Pictures will document the home’s exterior, interior rooms, systems, site and any defects noted.

• Comparable sales data – Recent sold homes similar to the subject property will be analyzed to value the home.

• Appraisal report – The appraiser will detail the home’s conformity to MPRs, valuation and summary of the inspection findings.

After completing the inspection and appraisal, a Notice of Value will be issued stating the home’s value and any repairs required to meet MPRs.

Can MPRs be Waived or Appealed?

If a home fails to meet the minimum property standards, the VA loan cannot be approved until the issues are corrected. However, buyers have a few options in this scenario:

Repairs – The sellers can fix MPR deficiencies prior to closing so the home passes inspection.

Escrow holdback – Lenders can escrow funds at closing to complete repairs after sale. Home must still meet MPRs.

Waiver request – Buyers can request certain repairs be waived if minor and do not affect safety and soundness.

VA appeal – Appraisals and MPR determinations may be disputed to the VA for review. Additional inspections or data may be considered.

Waivers and appeals are not guaranteed to be approved, so it’s best to work with the seller to address deficiencies whenever possible.

Recommended Home Inspections Beyond VA Requirements

The VA appraisal focuses on minimum property standards for safety and soundness – not establishing the true condition of the home.

As the buyer, it’s highly recommended you hire a professional home inspector for a thorough evaluation beyond these baseline requirements.

A home inspection typically covers:

• Roof, gutters and drainage
• Electrical, outlets and wiring
• Plumbing and water heater
• HVAC and appliances
• Foundation, structure, crawlspace and basement
• Insulation, ventilation and air sealing
• Doors, windows, walls and ceilings
• Fireplaces, chimneys and hazards
• Pests, rot and moisture issues

Home inspections cost around $300-$500 on average based on the size of the home. In my opinion, this is money