Do Homes Purchased With a VA Loan Have Warranties?
Some products like cars and trucks even offer extended warranties a buyer can purchase when the car’s not brand new. It’s logical to assume the same would be true for a home purchase with a VA mortgage. But what’s the reality?
When a buyer applies for a VA loan to buy their dream home, they learn the property must first pass a VA appraisal, which helps the Department of Veterans Affairs determine if the home meets VA standards for health and safety. Then the appraiser can establish the fair market value.
Buyers might assume that their home purchase is protected by some kind of warranty, but the truth is that the VA only requires a warranty in specific instances. New construction, for example, is covered by a one-year builder’s warranty. Existing construction homes one year or older are not covered by a warranty except in certain cases.
According to VA instructions, ten-year builder’s insurance or warranties are required when the property to be purchased is a proposed or under construction AND the local authorities are not doing construction inspections.
In these cases, the VA requires a second warranty known as a one-year builder’s warranty, which must be submitted on an official VA form.
In these cases, the VA wants the buyer to understand the property has not been inspected for code compliance or other issues and requires the buyer to sign paperwork to that effect.
Warranties for typical home purchases (one year old or older) with a VA-insured home loan are the exception rather than the rule, which is why the VA urges house hunters to pay for an inspection of the property before committing to the purchase or making the purchase conditional on having the home pass a buyer-funded inspection.