VA Appraisals and Defects: A Reader Question About Home Defects
A reader asks, “I recently bought a home that had a VA appraisal done, which I thought was also a inspection done per VA requirements (my misunderstanding). 3 weeks after closing and while doing paint work, I found serious rot and water damage in the ceiling, walls, and attic.”
“I don’t know how it could have been missed by the appraiser, the 4point and wind mitigation inspector, or the WDO inspector. Is the VA appraiser liable for missing this? Or any of the other inspectors? Do I have any recourse as a VA buyer?”
The VA Lender’s Handbook spells out the rules for VA appraisals and defects. A VA appraisal is NOT a guarantee or a stamp of approval by the VA that a home is defect-free, but there are rules for appraisers that include the following:
“The property must be free of hazards which may
- Adversely affect the health and safety of the occupants
- Adversely affect the structural soundness of the dwelling and other improvements to the property, or
- Impair the customary use and enjoyment of the property by the occupants.”
The VA Lender’s Guide also states that 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
- Termites”
Any borrower who feels the appraisal on the property has not been conducted in a competent manner should contact the Department of Veterans Affairs directly by calling 1-800 827-1000 to ask what steps should be taken in those particular circumstances. You may also wish to consult the VA Regional Loan Center with jurisdiction in your area, find your jurisdiction here.
Again, the VA appraisal is not a guarantee that the home is problem-free. Borrowers can and should pay for a home inspection that goes far more in depth in terms of examining the property for specific defects or problems. The home inspection is a cost the borrower must pay, but it’s well worth the expense.
Do you have questions about VA home loans? Ask us in the comments section.
BARB
We are looking at purchasing a bank owned foreclosure. We were just informed that there are leaky pipes in the home and the home has been winterized. We were told by our credit union that the home can not qualify for a VA loan with leaky pipes. This home is on our current block and needs fixing up. It has sat vacant for 1 1/2 years. We see the potential in it and are going in with our eyes wide open. We have enough equity in our present home to fix up this home but not enough to put 20% down and fix it up. Is there any way to pass an VA inspection?
Joe Wallace
The answer may depend on what your state or local building code says about such issues. Contact the VA directly at 1-800 827-1000 to ask about a possible waiver for VA MPRs in this case---these are handled on a case-by-case basis and there may be no way an exception can be made but you should at least try to see what the options might be in your situation.
Bob
I've looked at a couple of older homes that are on the market and they did not have heat in any of the bedrooms on the 2nd floor. They had vents in the floor which allows the heat to naturally rise from the 1st floor. I spoke today with a mortgage lender and they told me that they could not lend money unless these rooms had heat in them prior to the closing. Is this true?
Joe Wallace
The answer may depend on a variety of factors including local building code (which the VA does not have jurisdiction over) and lender standards. You may need to ask your local code authority if there are regulations that deal with those structural issues. VA loans require the home to meet state/local building code as well as VA minimum standards.
Kelly R Piercy
When a VA Appraisal states that a property meets Minimum Property Requirements I assume those are the MPRs spelled out in VA Pamphlet 26-7. The home I purchased Va does not meet MPRs with respect to foundation, settling, drainage, workmanship, among others. Regardless of the NoV and its warning about Home Inspection, when the VA certifies that a home meets MPRs, does that not place liability on the VA when such deficiencies are clear and obvious? I am in the process of contesting this question with the Va. To date, the answer of the Atlanta Regional Office is that a VA Appraisal is a "General View" of the property and does not look at such things as drainage, settling or mechanical or systems. In an unsigned email, the VA has stated that a VA Appraisal is a "Casual View" of a property. Wherein lies my recourse to make the VA live up to its more and more tarnished reputation.
Joe Wallace
The VA appraisal is not a guarantee that the property is free from defects--this is stated in VA Pamphlet 26-7. The VA appraiser is not required to be a foundation expert or have specific expertise in mechanical systems or other technical aspects of the home. The appraisal is a general view of the property and it's strongly recommended that a potential buyer pay for a home inspection to get a more detailed analysis of the property. Any NoV warnings about home inspections should be taken very seriously--the home inspection is a very important part of the house buying process.