VA appraisals

VA Loan Minimum Property Requirements

October 22, 2014

VA Loan Minimum Property Requirements

050-logoA reader asks, “Can anyone tell me if a VA loan requires that the outside walls of my garage be drywalled on the inside of the garage? We are selling our home to a couple who is getting a VA loan and our realtor suggested we may have to put sheet rock on the 3 outside walls of our unheated garage to qualify our home for the buyer’s loan. Our home was built in 2006 to current code standards. Is this a requirement for a VA loan approval? Thanks.”

VA loan minimum property requirements don’t necessarily address issues such as these in that level of detail. VA loan minimum property standards do have a lot to say about issues of safety, habitability and other areas, but in the case of this reader question there may be several reasons why the realtor made the suggestion.

One is that other comparable homes in the area where the appraisal is occurring have such a configuration. That could affect the value of the property but not necessarily whether or not the home “passes” the appraisal process without required corrections.

Another is that state or local building code has changed since the time of the original construction of the home and the fixes recommended would now be a requirement.

A third alternative is that the realtor misunderstood the results of a similar appraisal and assumed that such a condition was a requirement of VA loan approval. Regardless, it’s important to remember two things about the VA appraisal process. The first is that VA appraisals do require the home to meet state/local building codes and that VA minimum requirements never override those codes.

The second is to remember that a home can be appraised and fail to meet minimum property requirements, yet still be eligible for VA loan approval if the appraiser says corrections are possible. Those corrections must, in general, be completed as a condition of loan approval. It’s good to discuss the corrections with the lender to see if an exception is possible based on certain types of necessity.

Do you have a question about VA home loans? Ask us in the comments section.

  1. Matt Manning

    I put bid on a house that was accepted far below appraised value, however the house needs a few repairs. These include wall rot around a few windows, well work and a/c. Will the VA approve the loan if I post a bond on the house for the price of the repairs?

    • Joe Wallace

      The window rot issue specifically would need to be corrected before the home can be considered eligible for a VA loan. That's according to the VA Lender's Handbook Chapter 12, which states: "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. Such conditions include but are not limited to • defective construction • poor workmanship • evidence of continuing settlement • excessive dampness • leakage • decay, and • termites."

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