VA Loan Articles
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VA Appraisals: Physical Defects vs. Potential Problems
When veterans in Texas shop for a new home and a VA mortgage, it pays to be informed about problems unique to the local area. Texas VA mortgage holders content with potential foundation repair problems, mold abatement and other issues. Military homeowners in North Dakota living on or near the flood plain have decisions to make when it comes to flood insurance. Vets in California looking for a new home with a VA mortgage could be faced with mudslide and forest fire problems.
These sorts of area-specific concerns require some extra homework when it comes to making an informed purchase. Does the veteran get full disclosure from the lender, VA appraiser, or seller about the issues unique to the region? What if the vet or active duty house hunter looking for a VA home loan in Texas or elsewhere doesn’t ask enough questions to get the full story about the area where a home is located?
It's comforting to know in some cases the Department of Veterans Affairs does require full disclosure to the buyer--when a VA appraisal uncovers defects in the property itself including safety issues and other problems.
According to the VA, the property must be "free of hazards which may adversely affect the health and safety of the occupants" as well as issues which "adversely affect the structural soundness of the dwelling and other improvements to the property."
These unsafe or unhealthy conditions can't be left alone once discovered. The VA requires "an inspection with corrections as needed by a professional in that field with full disclosure to the veteran."
But that doesn't address the issue of natural disasters, man-made problems (including forest fires) or their potential to damage property. That potential isn't covered under the “full disclosure” requirement by the VA during the inspection process. The appraisal requirements concern the property itself, not the surrounding area. The VA appraiser can't examine a home and declare it "in danger of being flooded out" by the river two miles down the road. But if a home’s structural integrity has been affected by a recent natural disaster, that condition would be noted on the VA appraiser’s report.
Do you, as a buyer, know if flood, fire, or "acts of God" insurance might be advisable for a the home you want to buy with a VA loan? VA rules and regulations require buyers to be protected from property defects and other issues that are discoverable during the inspection, but its up to the buyer to research the surrounding area to determine if there are bigger issues that may require additional insurance or other steps to insure the home is protected when natural disasters or man-made events damage the local area.
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