Veteran Home Loans are so interesting to get appraised. The VA assigns their own appraisers, they always have, and quite honestly I’ve gone to a VA Appraiser’s home and PICKED HIM UP and TOOK HIM to the property, because (wait for is) his wife wouldn’t let him drive in the rain. Many of them, in NC anyway – are “seasoned.” Having a long conversation with a VA appraiser is interesting, and it let’s us know what VA Mortgage Loan Minimum Property Requirements in NC are. The basic issues with a VA loan sometimes come with the appraiser not giving sufficient value to a particular “feature” of the home (like new wallpaper) or they see an item as a defect.
The Veteran’s Administration doesn’t actually make home loans to Veterans. They simply insure the VA loans, and as such, they act more or less like an Insurance company, letting the Bank what they will cover, and what they expect. The VA policy regarding minimum property requirements, and the instructions as to what the VA “fee” appraiser should look for impacts the appraisal. Depending on the interpretation, an appraiser might require all paint to be peeled and scraped from an outbuilding, for instance, if they suspect there’s still lead paint there.
Outbuildings can be a problem if the appraiser finds that the soundness of the “shed” that houses the Yard Equipment is not “acceptable” – The VA Appraiser can require that it be structurally examined. If the property is NEW construction, or vacant for a period of 12 months – they require that the builder provide the buyer a warranty.
Here are the VA minimum property requirements which include the following:
“VA Minimum Property Requirements (MPRs) provide general acceptability criteria for properties which will become the security for VA-guaranteed loans.
In proposed or under construction cases, the MPRs help ensure that the property is constructed according to the applicable
- building code
- Federal regulations, and
- HUD requirements.
In existing and new construction cases, the MPRs provide a basis for determining that the property is
- safe, structurally sound and sanitary, and
- meets the standards considered acceptable in a permanent home in its locality.”
Its very important to take note of the building code and acceptable standards portions of that quote. Some borrowers mistakenly assume that VA appraisal standards as listed in the VA Lender’s Handbook and elsewhere on the VA official site are the final word on the matter; that quoting the regulations found in VA guidelines will overrule other building code or safety requirements. This is not true.
Additionally, we have Veteran’s (and their real estate agents) who want to know if repairs can be escrowed for at closing... the answer to that is NO.
VA Home loan appraisal standards are placed in addition to, not a replacement for, local, state, and federal building codes or regulations. When making comments about items that need to be resolved or addressed, the VA Appraiser is not to create a situation or “remedy” that would overrule any other local building ordinance or requirement. Where no requirement exists, it may be safe to say that VA Appraisal regulations have the final say, and in some cases the VA home loan Appraisal requirements are fairly strict where safety is concerned.
As an example – we’ve had folks call us who wanted to purchase a one bedroom, single family home, with no central heat – and put a VA home loan on that property. The answer is no. I’ve had folks call me who want to buy a home that has no internal hallway to reach the bathroom – you have to go outside… again no.
The home also has to be FUNCTIONAL and (here’s the big thing) in a state that would appeal to MOST people. Most families do not think having the only bathroom in a home accessible only by going outside “functional.” If you default on this home, and the bank has to put it back on the market – could they easily sell it? That’s going to be the big question.
Another example would be the VA Appraisal standard that states that no home to be purchased with a VA mortgage can be located within “a high voltage transmission easement”. Such locations may be acceptable to other loan programs, and while such a location may not be in technical violation of other guidelines or statutes, VA home loan rules do not permit it.
The VA Appraiser may look at that home you want to buy that has been a foreclosure, or has tax liens on it and tell you it’s just not that good of a deal. In that situation, you can appeal the final value – but that is a difficult process. We can not lend you more than the Appraised Value established by the VA Appraiser on the home.
Because all mortgage loans that are backed by the Government have the “best” interest rates right now, this is a GREAT program to use! In addition, there’s no monthly PMI! Even if you are purchasing a “Bigger” home, and you are going to make a downpayment, you might still want to use this program!
If you have specific questions about a home that you are interested in and VA Mortgage Loan minimum property requirements in NC – or if you are considering a VA Loans in Rural Communities, and want to know more about qualifying for a VA mortgage loan, please call Steve and Eleanor Thorne, Govenment Mortgage Loan Experts, 919-649-5058
I try and answer all questions :)