VA appraisals

VA Appraisals: What the VA Is Looking For

November 2, 2011

author:

VA Appraisals: What the VA Is Looking For

There have been a number of reader questions about the VA appraisal process recently, so it seemed like a good time to revisit some of the basics of VA appraisals. What is the VA looking for when the appraiser comes to review a home?

One of the first things an appraiser notes is the use for the property. VA appraisal rules state, “The use must be primarily residential.  If a portion of the property has non-residential use, it must not impair the residential character of the property or exceed 25% of the total gross floor area. In making this calculation, the total nonresidential area must include storage areas or similar spaces that are integral parts of the nonresidential portion.”

Next, the appraiser notes the condition of the living areas. To meet VA minimum requirements, “Each unit must have sanitary facilities and space necessary to assure suitable living, sleeping, cooking and dining. Facilities such as laundry and storage space or heating may be shared in two-to-four living unit buildings under a single mortgage.”

All utilities must be separate for each living unit on the property, but the VA adds, “living units under separate ownership may share connections from the main to the building line when those connections are protected by easement or covenant, and a maintenance agreement acceptable to VA.”

A VA appraiser takes note of the “mechanical systems” in the home. A boiler, heater, central air conditioning unit, or other systems must not only be in good repair and have “have reasonable future utility, durability and economy”, they must also be of the proper capacity to handle the size of the property they are installed in.

That means a central air system designed for a smaller home cannot pass the appraisal process if it’s installed in a larger property–again, each system must be of adequate capacity for the home.

Heat systems can be of particular interest to the appraiser.

“Homes with a wood burning stove as a primary heating source must also have a permanently installed conventional heating system that maintains a temperature of at least 50 degrees Fahrenheit in areas with plumbing.” Comfort and safety are two of the concerns with any heating system installed on the property, but the safety of plumbing is also a concern.

When it comes to solar systems, VA appraisal rule state they must be “must be backed up 100 percent with a conventional thermal energy subsystem or other backup system, which will provide the same degree of reliability and performance as a conventional system.”

This is not an exhaustive list of VA appraisal requirements, but it does give you an idea of what the VA looks for when it sends an appraiser to look over a property to be purchased with a VA insured home loan.

Join us on Facebook

5 Comments
  1. leslie k layfield

    Could you plse tell me any other system checks that are made in the home other than heating/air and the sanitary sleepling, living conditions present. Do you do other checks on the home we may intend to purchase, or on any appliances, water, electric.etc. I realize this is appraisal and not an inspection. Thank you,

    • Joe Wallace

      Hi Leslie--there's more information on the VA loan appraisal process at this link: http://www.valoans.com/va_article.cfm?id=105

  2. Steve Kinder

    I am looking at purchasing a short sale, the property has some structural damage. I have consulted with a structural engineer and am prepared to make the repairs. My question is this: I will be doing a VA loan, will these repairs need fixed to pass the va inspection? The house is livable but has some foundation settling, specifically it will need helical peirs installed. If this is needed to pass the inspection, when does the VA inspection take place, near closing? Please email steve@1dynamicrenovations.com with your reply.. Thank you

    • Joe Wallace

      Hi Steve, thanks for your question. The VA appraisal will occur prior to loan approval and any recommendations made by the appraiser would have to be addressed prior to closing. More information is at http://www.vba.va.gov/ro/cleveland/steps_to_va_loan.htm#Appraising%20the%20Property

    • Joe Wallace

      According to the VA, "Conditions Conditions which impair the safety, sanitation, or structural soundness of the dwelling will cause the property to be unacceptable until the defects or conditions have been remedied and the probability of further damage eliminated." That definition could include the foundation issues as mentioned in your question. The VA Lender's Handbook states "Such conditions include but are not limited to defective construction, poor workmanship, evidence of continuing settlement..." The appraisal is done prior to final loan approval as the appraisal helps determine the loan amount. The appraiser may require the corrections be done prior to closing.

Leave a comment

Your email address will not be published. Required fields are marked *