What Does the VA Require Beyond a Basic Home Inspection?

A cartoon of a home inspector on a ladder examining a homeWhen it comes to purchasing a home with a VA loan, there are specific requirements that go beyond a basic home inspection. Understanding what the VA requires can help streamline the process and ensure a smooth transaction. In this article, we will delve into the additional steps and inspections that are necessary when using a VA loan to buy a home. From pest inspections to appraisal guidelines, we will cover everything you need to know to navigate the VA loan process successfully. Let's dive in and explore what the VA requires beyond a basic home inspection.

1. VA loans do not require a home inspection, but the Department of Veteran Affairs highly recommends it.
2. A home inspection is beneficial as it helps identify potential problems and allows negotiation with the seller for repairs before closing the loan.
3. VA loan home inspections ensure the property meets Minimum Property Requirements (MPRs) set by the VA, including factors like heating, ventilation, pests, running water, and electricity.
4. The cost of the VA appraisal, which is required for VA loans, is typically covered by the property buyer.
5. Inspections on wells are generally required for VA loans to ensure compliance with water quality standards and functioning pump systems.
6. Thorough inspections provide valuable information for homebuyers to make informed decisions and move closer to homeownership confidently.

Overall, VA loan borrowers need to understand the benefits of home inspections and VA appraisal requirements to ensure a sound and secure property is purchased.

VA Home Inspection: Is It Mandatory?

The short answer is no. Home inspections are not required with VA loans. However, the Department of Veteran Affairs recommends that all borrowers get one anyway. A home inspection is a professional assessment of a home's condition.

It can identify potential problems the borrower may need to be aware of and give them negotiating power with the seller to get the repairs before closing the loan. The home inspector will check for structural soundness, electrical safety, and plumbing conditions. Home inspectors also look for signs of pests or other damage.

Advantages of a Home Inspection with VA Loans

A home inspection is essential because it can help you avoid buying a home with significant problems. The inspector will look for structural issues, mold, pests, and other potential problems. If any critical issues are found, you can negotiate with the seller to fix them before you close the loan.

A home inspection can also give you peace of mind, knowing your new home is in good condition. Once you move in, you can relax and enjoy your new home without worrying about expensive repairs.

Evaluation Criteria: What Home Inspectors Examine

The VA requires that homes they finance meet their strict standards and VA Minimum Property Requirements (MPRs).

The VA home loan inspection requires the inspector to look for evidence of water damage and structural and fire safety issues. The VA will finance the home if the home passes the examination with a score of 80% or above. The home inspector will check for water damage, structural issues, and fire safety issues.

They will also look for mold, mildew, water stains, and cracks in walls or ceilings and ensure that working smoke detectors and all electrical outlets are covered. If any of these issues exist, the home must be repaired before it can pass inspection. If the home meets the VA's standards and passes the examination with a score of 80% or above, the VA will finance the home.

Questions to Ask Your VA Home Loan Inspector

You should have a qualified professional conduct a comprehensive inspection of your potential home to ensure it is in satisfactory condition when you are in the market to purchase one. Your home inspector must meet specific requirements to qualify for a VA home loan. Ask the inspector handling your VA home loan the following questions:

Here is a list of questions to ask your VA home inspector:

  1. What are your experience and qualifications as a home inspector?
  2. How long have you been inspecting homes?
  3. What type of inspections do you specialize in?
  4. Can you provide references from previous clients?
  5. How long will the inspection take, and what areas of the home will you be inspecting?
  6. Will you provide a written report of your findings and recommendations?
  7. Can you explain the inspection process and what it will cover?
  8. Do you have liability insurance in case any damage occurs during the inspection?
  9. Will you be able to answer any questions I have during the examination?
  10. Do you offer any follow-up services or consultations after the review is complete?

Cost of a VA Home Inspection

You may be eligible for a VA home loan if you are a veteran or active duty service member. Before closing your loan, the property must pass a VA home inspection.

Generally, buyers can expect to pay between $200 and $400 for the review, depending on the size and location of the property, as well as the inspector's fees.

Although this may seem like an additional expense, it is an investment in your future, as a thorough examination can help identify any potential problems with the property that could end up costing you more money down the road.

Remember to factor in the home inspection cost when applying for a VA home loan for peace of mind.

Understanding the VA Home Appraisal Report

Buyers can use appraisal, inspection, and VA reports before purchasing a property. The reports provide an estimated property Value and condition information. They can also help buyers identify any potential repairs needed before the purchase.

VA appraisal requirements for those using VA loans include meeting the VA's minimum property requirements. The VA inspection report identifies whether the home meets these standards. An appraisal helps determine the home's Value.

VA Minimum Property Requirements (MPRs) Defined

The VA requires that the prospective property meets all the MPRs before insuring the loan through the VA appraisal process.

As a veteran or service member looking to buy a home with a VA loan, it is essential to be aware of these MPRs, which are minimum standards that must be met for the house to qualify for a VA loan.

The MPRs cover Various topics, such as the condition of the home's foundation, framing, and roofing, the state of the home's windows, doors, and stairs, and the shape of the home's plumbing, electrical, and HVAC systems.

The MPRs also require the house to have adequate heating, ventilation, and air conditioning, to be free of pests, and to have running water and electricity.

The buyer (and their home inspector) must identify any additional repairs that may need to be made beyond the MPRs.

While meeting the MPRs is a crucial step in qualifying for a VA loan, other requirements, such as credit and income, must also be met.

Financial Responsibility for the VA Appraisal

The property buyer typically covers the assessment cost, which varies based on the location and size of the residence. The Veteran's Administration requires an appraisal, and the fee is paid upon application. The buyer should set aside $500 for the assessment. The deposit will be refunded at settlement if the seller covers the veteran's closing fees.

Distinction Between Home Inspection and VA Appraisal

Homebuyers must know the difference between a VA appraisal and a home inspection. A qualified home inspector will conduct an unbiased assessment to examine the property and look for potential issues.

A home inspection is not required for a VA loan but is highly recommended. On the other hand, the Department of Veterans Affairs requires a VA appraisal to determine the property's Value for loan purposes.

The VA appraiser will check if the property meets the VA guidelines for safety, habitability, and fair market value and report any problems to the VA lender. The primary goal of MPRs is to ensure that the home buyer obtains a residence that is "safe, structurally sound, and hygienic."

Reasons for Failing a VA Loan Home Inspection

Your inspector will ensure that your home has the following:

  • adequate heating systems,
  • up-to-code electrical systems,
  • undamaged windows,
  • no pest problems,
  • no rotting wood,
  • no water stains, and
  • proper ventilation in the attic and crawl spaces when you buy a property with a VA loan.

If these issues are present, your inspection will not be approved.

Next Steps if a Home Fails VA MPRs

If the home doesn't meet the minimum property requirements for a VA loan, you or the seller may have to make some repairs or improvements before the loan can be approved. Sometimes, the lender may require a 2nd appraisal to verify that the property has been updated to meet the VA minimum property requirements.

Apply for a loan from the FHA 203k program to cover the house's purchase and improvements if the seller is unwilling to renovate. This loan program benefits buyers hoping to purchase a home that needs renovations, as it can provide the necessary funds to make the improvements.

Frequently Asked Questions on VA Inspection Standards

Q. Are healthy inspections required for VA loans?

A. Many veterans and active duty military members are unaware of the requirements when financing a home with a VA loan. One question often arises: Are healthy inspections required for VA loans? 

The short answer is yes. It is important to note that while some lenders may waive this requirement, the Department of Veterans Affairs (VA) generally requires an inspection on wells regardless of condition or age. This ensures that the water provided by the well meets all quality standards set by local and federal regulations. The inspector will also ensure the pump system works appropriately and verify whether any repairs are needed. 

In addition to an overall inspection, other factors such as water flow rate, safety measures for access points, and bacterial content must also be evaluated to determine if a well meets VA loan requirements.

Q. Are septic inspections required for VA loans?

A. If you are considering a VA loan to finance the purchase of a home with a septic system, it's essential to understand that specific requirements need to be met for the loan to be approved. One of those requirements is an inspection of the septic system. By doing this inspection, lenders can ensure that the property has an appropriately functioning septic system and can determine how much life is left in it before needing repairs or replacement. 

VA regulations require that all dwellings financed through their mortgage program have adequate sanitary facilities, including proper wastewater disposal systems such as on-site sewage treatment systems.

The lender must also get written confirmation from an independent 3rd party inspector verifying that these systems meet local health department rules and regulations. This includes existing homes purchased with a VA loan and newly constructed homes.

Q. Are pest inspections required for VA loans?

A. A VA loan termite inspection is obligatory if you want to use a VA loan to fund your new home purchase. The inspection standards change depending on the state and county where you reside. The Department of Veterans Affairs uses the Termite Infestation Probability Map, which can be found on the Council of American Building Officials website, to identify which states and localities need to have termite inspections performed (CABO). This map illustrates the locations of typical termite infestations. Heavy or moderate infestation levels will determine whether a zone must be inspected.

It is essential to remember that purchasing a house using this sort of financing could not require a pest inspection in certain states and counties.

Conclusion: What Does the VA Require Beyond a Basic Home Inspection?

In conclusion, purchasing a home with a VA loan involves specific requirements that extend beyond a typical home inspection. By familiarizing yourself with the additional steps and inspections mandated by the VA, you can streamline the process and facilitate a seamless transaction.

From pest inspections to strict appraisal guidelines, being well-informed is crucial for navigating the complexities of utilizing a VA loan to secure your dream home. Remember to stay proactive in understanding and meeting these requirements in order to ensure a successful and hassle-free home buying experience. Take the time to educate yourself on what the VA demands beyond just a basic home inspection – your diligence will pay off in the long run.

SOURCE:
Chapter 12 Minimum Property Requirement

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