VA Home Loan Inspections
Before guaranteeing a loan, the United States Department of Veterans Affairs (VA home loans division) wants to ensure that the home you wish to sell or buy is a worthy investment. Part of ensuring this is by performing the VA home loan inspection. This mandatory inspection is an appraisal and visual inspection combined. Its purpose is to check for any damages or defects in the home that lower its overall value or risk the safety of its occupants.
Some examples of these types of defects are broken windows, lack of proper heat, unsafe electricity, holes or damaged roof, termite infestation, non-functioning plumbing, etc. The safety and security of the VA buyer is written into the Code of Federal Regulations. The intention of the VA loan was to provide safe and easy access to homes returning from World War II. These habitability elements require the home to be safe, sound, and sanitary. The safety aspect of the inspection is not only for the safety of the buyer and their families but also the safety of loan providers as well. In order to pass the VA home loan inspection, it’s important to abide by the guidelines set about by the U.S. Department of Veterans Affairs.
As of now, there are no detailed guidelines that require a specific defined condition of the home. The home should, however, be up to date with standard building codes as well as federal regulations and guidelines set by the U.S. Department of Housing and Urban Development. Below we will examine the 5 most common reasons a home will fail the VA inspection.
Heat is an important element of these inspections. There must be an acceptable and efficient source of heat for the home. This means the heat must provide comfortable and appropriate living conditions. If the only source of heat in the house is a wood-burning stove, it must be complemented with an alternative system that can maintain a minimum of 50 degree temperatures in the plumbing areas of the house.
The VA loan appraisers will also be very strict about broken windows. All broken windows must be properly repaired before the final report issued and/or the home is approved. This is because broken windows not only affect the heating bill, but they invite burglaries and present a negative image of the house to the neighborhood. The VA feels that buyers should be able to have a sense of pride about their recent purchase.
Electricity is another element to be taken seriously by VA Lenders and home-buyers. All homes must provide acceptable electricity for lighting and must have proper equipment for doing so.
VA home loan inspectors will also check carefully for any holes in the roof that could lead to leaks and other defects that can severely damage and reduce the quality of a home. It is important to properly patch up any holes in the roof if you want to pass the VA loan inspection.
Loan underwriters will also require a termite clearance. Termites can eliminate your home’s candidacy in the VA loan program. The seller of the home must provide section one termite clearance and, in many cases, section two as well. As a seller, it might be a contingency of the contract to go the extra mile by making the required guidelines and repairs set about in section two of the termite report.
Any violations of these guidelines can result in the disapproval of the home’s acceptance in the VA home loan program as well as a full refund of the buyer’s deposit in the event that a defect is found after inspection.
What to do if the report requires repairs:
The seller is responsible for all costs and liabilities of completing the required repairs as reported on the VA home loan inspection.
If the seller does not make the required repairs, the buyer may cancel the contract.
Who Pays If The Home Is A Short Sale?
Often with short sales, the owners lien holder (bank or banks) will allow a credit for VA required repairs. If this is the case, the seller will not have to personally pay for the repairs as they will be billed to escrow.
Passing a VA home loan inspection is not as difficult as most agents and sellers believe. As long as the home is in decent condition, it should be easy to receive VA approval.