What the VA Does NOT Do for VA Loan Borrowers
I write a lot about VA loans, but up til now I’ve neglected to discuss some aspects of the VA home loan process a buyer should know every bit as well as the requirements to qualify and successfully navigate the VA loan process.
At every step of the way, the Department of Veterans Affairs has set up rules and regulations to protect veterans and lenders alike. The VA has guidelines for borrowers that keep them from getting into predatory loan situations, and it also has rules to protect loan officers from signing up new clients at high risk of defaulting on a home loan.
But the VA can’t do EVERYTHING. There are some things the Department of Veterans Affairs wants those seeking a VA-guaranteed mortgage to know right up front.
For example, one thing the VA stresses again and again is that it does NOT guarantee a home is free from defects when it approves a property for a VA loan transaction. In the industry we veterans and newcomers alike throw around industry terms forgetting that they might mean something quite different to people who are new to the business—the first time home buyer.
When we talk about a VA appraisal, for example, sometimes we forget and say or write “inspection”. But a VA appraisal is not technically a home inspection—not the kind the buyer wants to have happen before they decide the home in question is right for them. In the exact words of the VA,
“The VA appraisal is not intended to be an “inspection” of the property. A veteran should seek expert advice (a qualified residential inspection service), as necessary, BEFORE legally committing to a purchase agreement.”
The VA also cannot guarantee a buyer is making a wide decision in investing in a particular property. Housing markets fluctuate, property values change, and the VA has no control over that. The VA wants the buyer to know that, while buying a home is a sound investment when done with caution and due diligence, there are no guarantees from the government.
In my next blog post I’ll discuss a few more things the VA wants you to know it can’t do, and one thing the Department of Veterans Affairs definitely CAN do when circumstances warrant.