How can agents and buyers ensure VA appraisal success? It starts with a simple walk around the home's exterior.
VA appraisers use “the three S’s” to ensure homes purchased by veterans are move-in ready and in good repair: safe, structurally sound, and sanitary.
Homes that don’t live up to “the three S’s” or the VA’s additional list of Minimum Property Requirements must be repaired before a VA loan can close.
But luckily for agents and buyers, some of the most common VA appraisal glitches can be immediately identified with a quick stroll around the property. On your next VA house hunt, be sure to scour a home’s exterior for these four potential problems:
When scouting out a potential property, keep a watchful eye on the siding. Rotten, missing or severely cracked siding could pose a threat to the “soundness” of a home’s structure. Water could be seeping into the home’s sub-structure and/or weakening the foundation.
Don't overreact to minor damage. A small crack probably won’t need to be fixed. It’s up to the VA appraiser to determine if siding damage is serious enough to necessitate repair.
TO DO: Scan the siding for signs of damage. Do you see major cracking? Do you see rotten siding? Is the siding damage causing additional problems (damage to wood underneath or pooling water around foundation)?
The VA Lender’s Handbook very specifically states: “The site must be graded so that it:
TO DO: If possible, visit the site after a rain. Do you notice any pooling water near the foundation? Is the terrain graded to drain water away from the home?
Noticing a common theme in these repair items thus far? Hint: it’s WATER.
Water can cause all kinds of problems to a structure. The gutter system is one of the best defenses against water damage, and will be examined by the VA appraiser. Gutters need to be present and in good condition, or the VA appraiser may place the appraisal “subject to” repair.
TO DO: Walk around the home and examine the condition of the gutters. Are sections of the gutter missing? Are downspouts directing water away from the foundation?
Peeling/chipping paint is a minor annoyance for most buyers. But in a home built before 1978, peeling paint could indicate the presence of lead-based paint.
Lead-based paint raises the hackles of the VA. The ingestion of lead-based paint can lead to kidney damage, nerve damage, and a whole host of other problems.
Seeking to protect service members and their families, the VA maintains strict guidelines regarding lead-based paint. As such, “any chipping, cracking, scaling, peeling or loose paint is considered to be a defective paint condition. This is an MPR (not cosmetic) repair. All defective paint must be corrected no matter how old the house is.”
If the home was built in 1977 or before, peeling surfaces must be thoroughly cleaned or scraped and covered with two coats of paint. Most VA appraisers won’t make a home “subject to” repair if it was built after 1977, unless the surface is at risk of serious decay.
TO DO: Check the home and all outbuildings for peeling paint. Surfaces with peeling paint will likely need to be repaired by the seller before your VA loan can close.
Minimum Property Requirements (MPRs) were created to protect service members. The VA doesn't want military buyers to run into costly surprises immediately after making a home purchase. In that spirit, homes purchased with VA loans must be in good condition and move-in ready.
That doesn't mean that buyers need to run away from less-than perfect properties. It just means VA buyers and agents need to be alert and informed. Focus on properties that are within range of the VA's MPRs, and use good negotiation tactics to get necessary repairs completed.
In some cases, the VA may grant an MPR waiver for a home that does not technically meet MPR standards. These subjective case-by-case waivers require both the veteran and lender “to request the exemption in writing.” Even then, the home must live up to basic safety standards.
Choose the right professionals to guide you through the VA loan process, including a VA-savvy agent and an experienced VA lender. If you have questions about your VA loan or the VA appraisal, you can call 855-870-8845 anytime and speak with an experienced Veterans United Home Loan professional. Knowledgeable experts can steer you to sound homes and carefully guide you through the VA loan process.
And remember, it all starts with a walk-around.
A VA loan is a mortgage option issued by private lenders and partially backed, or guaranteed, by the Department of Veterans Affairs. Here we look at how VA loans work and what most borrowers don’t know about the program.
Your Certificate of Eligibility (COE) verifies you meet the military service requirements for a VA loan. However, not everyone knows there are multiple ways to obtain your COE – some easier than others.