Let’s be honest: The VA appraisal has a reputation of being problematic.
But it doesn't have to be. With a little knowledge and a watchful eye, you can help guide your buyers to properties that will easily meet the VA's Minimum Property Requirements. Boost your VA appraisal know-how with a review of four big VA appraisal pitfalls to avoid:
Water can cause an unbelievable amount of damage to a home. Water leads wood to rot, mold to grow and drywall to decay.
That’s why basements and crawl spaces must be dry to garner VA approval. The VA states that any excessive dampness or ponding of water in a home’s crawl space must be corrected, and most appraisers extend that rule to basements, as well.
In the VA’s own words, “the roof covering must
Appraisers have some flexibility in assessing the “reasonable future utility” of a roof. Roofs that are 20 years old won’t automatically lead an appraiser to recommend replacement. Borderline roofs will usually lead an appraiser to call for a professional roof inspection. Gaping holes or missing shingles, however, will probably necessitate repair.
Some homeowners are willing to overlook the health risks posed by lead-based paint. The VA is not so brazen.
Lead-based paint “constitutes an immediate hazard that must be corrected.” VA appraisers are ordered to assume that defective paint conditions such as cracking or chipping on pre-1978 surfaces involves lead-based paint. If lead-based paint is noted, sellers must take action for a successful sale.
The VA requires that surfaces with loose lead-based paint either be removed or thoroughly scraped and covered with two coats of paint.
Termite-ridden homes must be treated and re-evaluated for VA loan approval. Termites are pesky little critters that can eat the heart right out of a good deal.
Termite inspections are required in certain areas of the country. And even if a pest inspection isn't required in your state you'll still have to have an inspection completed if the appraiser finds evidence of termites on the property.
If termites are discovered, the property has to be treated and re-evaluated. Don’t forget that the VA prohibits buyers from paying for the inspection in all but 9 states (Alabama, Arkansas, Arizona, California, Florida, Louisiana, Mississippi, Oklahoma and Texas).
A home that possesses one (or all) of these problems isn't automatically eliminated from VA loan contention. A willing seller can make anything possible.
If a home falls short of the VA's Minimum Property Requirements, the appraiser will recommend certain repairs. Those repairs must be completed before a VA loan can close. Some sellers are more agreeable than others, and some repairs are simpler than others. With luck, a seller will complete the repairs necessary to send the VA loan across the finish line. Otherwise, it's time to resume the house hunt.
Your Certificate of Eligibility (COE) verifies you meet the military service requirements for a VA loan. However, not everyone knows there are multiple ways to obtain your COE – some easier than others.
Credit score requirements vary by lender. However, most lenders have similar criteria. Let's look at the minimum credit score for a VA loan and what lenders typically expect.