A VA appraisal is not the same thing as a home inspection. When you apply for a VA purchase loan, an appraisal is required to help protect borrowers from purchasing properties that are not safe, sound or sanitary. A VA appraiser’s checklist follows the VA’s Minimum Property Requirements (MPRs), which only evaluate the broad health and safety conditions of the property. A home inspection is meant to be a complete top-to-bottom evaluation of the property.
The VA appraisal provides a valuable service, but it doesn’t guarantee that the home is completely free of defects. As the buyer, you owe it to yourself to completely examine the property yourself before you commit to your VA mortgage. Buyers should strongly consider getting a home inspection, often before moving forward with the VA appraisal process.
It can be helpful to know the differences between what a VA appraiser and home inspector will look for as they evaluate the property. Did you know a VA appraiser doesn't necessarily state whether the plumbing works properly or perform a roof inspection? By knowing these differences, buyers can target properties that are likely to clear both the home inspection and VA appraisal.
The VA put MPRs in place to establish a fair market value of the property and to ensure it is safe, structurally sound and free of health hazards. However, a VA appraiser’s job is to only ensure a property meets these MPRs – they are not obligated or trained to report every potential problem or recommend repairs. Here are some of the general MPR considerations:
You'll need to provide your own input on the condition of the property and make sure it's up to your standards before signing the VA loan agreement. If it's not, you'll need to negotiate further before agreeing to purchase the property. This is where a home inspection can pay off.
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Unlike the VA appraisal, a home inspection focuses on a home’s problems areas in a much more granular and detailed process. Home inspectors are professionally trained to evaluate every detail of a home and make recommendations for improvements or highlight potential future issues.
Here are only a few of the areas the inspector will examine:
A final home inspection report can often reveal many existing and potential issues that a VA appraisal may overlook.
When it comes to homes that are under construction or custom built as part of your VA mortgage agreement, there are slightly different issues and methods of recourse. For construction defects in homes that were given a VA-directed fee compliance inspection (carried out by a VA or FHA/HUD-assigned inspector) the government has a complaint system for home buyers. This system is meant specifically for buyers who have failed to get redress on their complaints from the builders, so you should try to get the builders to correct the problem before resorting to filing a complaint with the VA.
It's important to note this complaint system is meant for construction defects the VA determines were caused by the builders, who would then be obligated under VA regulations to repair or fix them. The VA cannot force compliance, meaning the builders could (in theory) walk away from the project with the defects still in place. But in cases like these, the VA revokes that construction company's right to do business with the VA, so the incentive to work with the buyer and the government is strong.
In some cases the buyer may have a complaint about the construction of the home they're purchasing with a VA home loan which the VA determines still falls within the government's minimum standards. These cases are not ideal, but if the VA determines the minimum standard has been met, the issue is settled from the government's point of view. In addition to this, you have a limited time to file your complaint--usually in the first year you own the new home.