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VA Loan Appraisal Rules for Electrical Systems, High Voltage Lines

March 26, 2015

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VA Loan Appraisal Rules for Electrical Systems, High Voltage Lines

va loanThere are a variety of frequently asked questions about appraisals, and some of those questions involve the appraisal rules covering electrical systems, high voltage and other related topics. Since not all homes sold are brand new, it’s natural for borrowers to wonder what the rules might be for older homes.

How does a VA appraiser view the electrical panel in an older home, for example? What is acceptable to the appraiser? Can a home pass the appraisal with an older fuse-box style system?

According to the Department of Veterans Affairs official site, “the VA requires that electrical systems be safe, adequate and acceptable to the local authority. The local authority, usually the building department, is responsible for enactment and enforcement of electrical codes. If a fused electrical system is acceptable to the local authority it is acceptable to VA.”

The VA also adds, “For acceptability of an electrical system you must contact the local authority. The local authority is responsible for enactment of electrical codes and enforcement.”

As you can see, this means there’s no standard answer. The VA appraiser defers to the local authority on such matters and must follow local codes.

That’s true of any part of the appraisal, not just the electrical system.¬†Any building that does not meet local code requirements is not eligible for a VA loan until those requirements have been addressed. If the appraiser notes a condition and recommends a repair, those corrections can be made in order to have the property considered for a VA loan. In some cases, the appraiser may reject the home altogether.

That is definitely true of homes built near high voltage lines. So, what does the VA say about such properties?

“No part of any residential structure may be located within a high voltage electric transmission line easement. Any detached improvements even partially in a transmission line easement will not receive value for VA purposes.” For more information, the official VA site advises you to read the VA Lender’s Handbook, Section 12.07.

There’s no way to correct such an issue, so the appraiser would simply list the home as ineligible for a VA loan. In cases where the home has been denied on the basis of the appraisal, the borrower does have the opportunity to appeal the appraisal, a process which must be done in writing. Contact your lender and the Department of Veterans Affairs for more information on how to submit an appeal.

About Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association.

2 Comments
  1. Paula

    We have found a really nice hud home in great condition but all kitchen appliances are gone. They even took kitchen sink, most light fixtures have been removed. Other than that the house is great. I understand that Hud doesn't allow repairs prior to closing so I am trying to find out what I really need to pass VA inspection. Do realtor ever let you hook up stove dishwasher and sink so you van pass the va inspection since you are pre appoved for loan and havw won the hub bid.

    • Joe Wallace

      VA loan MPRs are found in detail at portal.hud.gov/huddoc/26-7c12VALH.pdf which is a downloadable PDF file. Kitchen appliances missing could affect the value of the property and while the VA MPRs may not specifically address every detail of such situations, local building still could apply--if the kitchen doesn't meet local code it's an issue the appraiser will address in the report.

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