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.