VA Loan Reader Questions: Construction Exhibits
A reader asks, “My home has not been built yet, and I am waiting on the VA Appraisal. I wanted to know if it is necessary to have an engineered, stapled and signed copy of the blueprints for the appraiser to do the appraisal?
“I have the blue prints, the plot survey, the electrical and the foundation–however, the people who engineered my blueprints will not release the engineered copy of my plans until payment is received. I thought that they can still appraise the property and it has no effect on the value whether they engineered or stamped the blue print until you go to close on the property being constructed. I thought that they should still be able to determine the proper value of the home based on the proposed blueprints and comparables in the area.”
The VA loan rules for construction exhibits and related documents are found in VA Pamphlet 26-7, Chapter 10 under the heading “Construction Exhibits.” That section begins by stating, “Construction exhibits are required for properties appraised as ‘proposed or under construction.’ They are not required for properties appraised as either ‘new construction’ or ‘existing construction.'”
What do these construction exhibits contain? By VA requirements they must have the following:
“Specifications on VA Form 26-1852, Description of Materials, signed and dated by the builder in all cases and by the veteran when one is under contract in an individual case processed as ‘proposed or under construction.’”
“Other specification formats are also acceptable, provided they are signed and dated by the builder and veteran as described above and are sufficiently detailed for VA appraisal and compliance inspection purposes.
- Plot plan which includes the location of the well/septic systems, if applicable.
- All exterior building elevations.
- Foundation or basement plan.
- Plan of all floors.
- Sectional wall details.
- A certification signed and dated by a technically qualified and properly identified individual (such as a builder, architect, engineer, etc.), which states, ‘I certify that the construction exhibits for (identification of the property by house type, lot, block, subdivision name, etc.) meet all local code requirements and are in substantial conformity with VA Minimum Property Requirements, including the energy conservation standards of the 1992 Council of American Building Officials’ Model Energy Code and the requirement for lead-free water piping.’ VA will accept HUD Form 92541, Builder’s Certification of Plans, Specifications and Site, in lieu of this certification.”
Since the certification portion is a VA-required document, it’s understandable why the appraisal process might not move forward until that documentation is provided. The borrower-provided documents likely wouldn’t be enough to meet the VA requirements stated above.
The VA appraisal is not just to establish fair market value, but also to determine that the property meets minimum VA standards–the certification mentioned above would satisfy the VA requirement that the home meets federal/state/local building code requirements.
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