VA Construction Loans

Finding a Suitable and Affordable Home (part 1)

THE NEIGHBORHOOD

If you want to be entirely satisfied with your new home, be sure that you can answer yes to the following questions:

• Is the house suitably located for schools, churches, shopping facilities, transportation and your place of work?
• Is the neighborhood well maintained and are the other houses similar in type and price range to the one you wish to buy?
• Does the area have local zoning laws or deed restrictions which will protect the neighborhood? Zoning laws and deed restrictions protect against such things as the construction of commercial property in residential areas, and may regulate lot sizes, the types of houses that can be built in the area, and whether or not manufactured homes may be placed on privately owned land.
• Is the house located so that you won't be bothered by noise, dirt, and danger from highways and other streets with heavy traffic?
• If not already installed, will there be adequate streets, sidewalks, curbs, and gutters? These items are called "offsite improvements," and you should be sure which of these improvements are included in the sales price of the house and that they will be provided without additional cost to you.

Remember that if "offsite improvements," such as sidewalks, street curbs and pavements, storm sewers and sanitary sewers are not included in the purchase price, their cost may be assessed against you if they are installed by the city or county, and you will have to pay for them later. It is a good idea to have the builder or seller list on the purchase agreement the "offsite improvements" which are included in the sales price.

THE LOT

In addition to the general location and neighborhood, you should make sure you are going to be satisfied with the size and shape of your lot, and with the existing or proposed lawn, shrubbery, walks, driveway, garage. etc. If any additional work on the lot is to be done, make sure that the purchase agreement lists all such improvements which the builder or seller will make as part of the purchase price. If you want to have play space for the children, or a garden, make sure that sufficient space is available.

Will the land be properly graded to provide diversion of water away from the building and from the lot, to prevent standing water and soil saturation harmful to the structure and to lot use, and also provide appropriate finished grades for safe and convenient access to and use of the lot area? If it is an existing house, take careful notice of the slope of the ground around the house. It should slope away from the house so that water will be carried away from the foundation; otherwise, the water may cause trouble. If possible, check the lot after a heavy rain to see whether it drains properly.

If you are building a house or placing a manufactured home on land you are purchasing separately or already own, consider how far away the utilities are and the cost of hookup. If service from a public or community water or sewage system is not available, find out if the ground water and subsoil conditions are satisfactory for an individual well and/or sewage disposal system.

THE HOUSE ITSELF

If you buy a house with a VA loan, VA will appraise the property to establish its reasonable value, which is an estimate of the current market value. You will be notified of the reasonable value. If you are building a home or buying a newly completed home with VA financing, VA or HUD/FHA will usually inspect the property during construction. These inspections are to see that the house is constructed according to the plans and specifications originally filed with VA and that it meets the minimum property requirements established by the Government.

This inspection service is valuable to you because it helps assure that your builder follows the construction practices advocated by the Government to assure a sound structure. It does not give you architectural supervision and does not assure you that you will be completely satisfied with what you get. Your main reliance must be on the reputation and integrity of the builder from whom you choose to buy.

But remember that the Government cannot guarantee you that the house is properly constructed in all respects, nor can it guarantee that you will be satisfied with the house in every way. The responsibility of the Government is limited under the law. VA is guaranteeing your loan, but it cannot under the law guarantee your house.

Because of this, it is very important that you have confidence in the ability and honesty of the company or person who is building or has built the house. If you have any doubts at all, be sure to get the advice of people you can trust who know the homebuilding business. A few words of good advice from a responsible person can save you years of future trouble.

If you plan to have a new house built according to your plans it would in all likelihood pay you to employ the services of an architect.

If you are buying an "old" house (that is, a house that has been previously occupied), there will, of course, be no VA or FHA inspection during construction. It is extremely important for you to make sure that the house is structurally sound. Here, too, the advice of someone who understands housing construction can be helpful.

As you look over the house, your primary job is to make sure that the house meets the needs of your family. The checklist should help you in checking over the main features of the house. The following pointers are given to help you to know what to look for.

VA Construction Loans

1. Introduction
2. The Cost of Homeownership
3. Equal Housing Opportunity
4. Future Costs of Homeownership
5. Finding a Suitable and Affordable Home (part 1)
6. Finding a Suitable and Affordable Home (part 2)
7. Finding a Suitable and Affordable Home (part 3)
8. The Agreement to Purchase the Home
9. Final Settlement / Closing the Loan
10. Before and After Moving Day