VA appraisals

VA Appraisals and Hazardous Conditions

April 19, 2011


VA Appraisals and Hazardous Conditions

The Department of Veterans Affairs has an appraisal system in place that insures that properties to be purchased with VA home loans live up to the VA minimum property requirements and are safe to live in.

VA rules covering hazards and defective conditions in the home state, “The property must be free of hazards which may adversely affect the health and safety of the occupants adversely affect the structural soundness of the dwelling and other improvements to the property, or impair the customary use and enjoyment of the property by the occupants.”

The rules also add a transparency requirement. “If an appraiser notices this condition, he/she should make a note on the appraisal report and require an inspection with corrections as needed by a professional in that field with full disclosure to the veteran.”

The rules on hazards do not specifically address all concerns. Asbestos, for example, is not mentioned by name in the requirements, but as the VA official site states, “VA does not address asbestos related issues specifically, however, deteriorating asbestos insulation within the confines of a home may be considered hazardous to one’s health,” and therefore covered under the Hazards and Defective Conditions rules.

Some properties built earlier than 1978 may also contain lead paint, which must be classified as a defective condition by any VA appraiser who detects the problem. Specific VA guidance on lead paint includes, “the correction of any defective paint condition on such properties must be made according to the requirements in Section 12.03 and inspected only by VA fee personnel or VA staff.”

Even with these requirements, VA loan applicants are reminded that a VA appraisal does not translate to a government guarantee that a home is free from defects or problems. VA appraisers may not be specifically trained to determine the extent or severity of lead paint or asbestos problems; these issues are reported when detected. The borrower is urged to employ the services of a reputable home inspector to resolve any lingering doubts about lead, asbestos or other issues in the home that may go undetected unless specifically searched for.

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  1. Phyllis Temple

    I have been told that VA does not finance properties that are being sold "as is" (seller making limited repairs--perhaps in the case of an estate sale). Is this information correct? I would appreciate any clarification that you might be able to offer on this matter.

    • Joe Wallace

      Hi Phyllis, The short answer is that the VA requires the property to be appraised, and if it does not meet VA Minimum Property Requirements the loan won't be approved. The appraiser may recommend repairs or chances as a condition of the loan being approved, so it's not as clear cut as "the home must be in livable condition at the time of appraisal", but the repairs must be made in order to get loan approval where applicable. There are other basic issues that won't fly with a VA loan--a home within a high voltage line easement, for example, won't qualify. Nor will a property within certain established flood zones or mudslide areas.

  2. Jenn Reyes

    My boyfriend and I are looking to buy a foreclosed home. The house is in pretty good condition however, there are a couple of stains on the ceiling in the kitchen/family room. The popcorn finish on the ceiling near one of the stains is beginning to peel off. This is a two story home and I believe the A/C unit is located above this area of the house. Will this be a deal breaker for the appraisal?

    • Joe Wallace

      Cosmetic issues may not cause the home to have appraisal issues according to VA minimum property requirements if those issues are in violation of federal, state or local code they will need to be addressed. Much depends on what your local building codes say when it comes to appraisals--not just the VA minimum property requirements. You might try asking the lender what his or her experience has been in the past with related issues and the appraisal. Hope this helps!

  3. Crete Carey

    My daughter is interested in a home built in 1910. Do the VA property , requirements also include the other detached structures--such as garage, exterior wall on property, etc.? What about a non-functional dishwasher? Easements, shared driveways? Please advise VA requirements?

    • Joe Wallace

      VA minimum property requirements aren't the only rules that could affect the property-local building code also must be observed, and a VA appraiser will reference local building code during the appraisal. Contact your local authority regarding building codes and contact the VA directly for more specific guidance at 1-800 827-1000.

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