VA Loan Appraisal and VA Inspection Requirements, Including the VA Minimum Property Requirements for 2023

Whether you or a loved one are a veteran searching for your perfect house, knowing if your new home will pass the VA loan inspection requirements and pass the VA loan appraisal process is essential. Today we’ll discuss the VA Loan Inspection Requirements and the VA loan appraisal process so you know the expectations before settling on that dream home.

What Is a VA Home Inspection?

A VA home inspection is a complete top-to-bottom property review that will help you help you decide if you want to purchase the home.

The VA doesn’t require homebuyers to get a home inspection, but it’s usually a good idea so you, as the homebuyer know what you’re getting into.

The VA home inspection will assess the home's overall structure, including the HVAC system, the home’s foundation, the roof, and other things that may go against local building codes to uncover potential issues with the VA MPRs that could go unnoticed.

How Much Does a VA Home Inspection Cost?

As it may seem, things keep adding up; the VA home inspection costs vary by location, home size, and property type. According to the U.S. Department of Housing and Urban Development, a home inspection costs anywhere from $300 to $500. Before your VA inspection, you can ask for a sample inspection report to understand better what the VA inspection will cost.

Unfortunately, the VA will not cover the VA inspection fee because it’s an optional service requested by you, the homebuyer. However, you’re responsible for this fee because the home inspector will work on your behalf. It will be totally worth it in the end, and you can see this cost as an investment, and it will protect you from getting the short end of the stick!

Here’s an inside look at what the VA Home Inspection Checklist consists of.

An inspector will follow a VA Home Inspection checklist and look at the following features of the property.

• The exterior of the house (including walkways, siding, flashing and trim, decks, and patios)
• Roof (including shingles, flashing, moss growth, etc.)
• Gutters and downspouts
• Attic and insulation (including ventilation from exhaust fans and dryers)
• Doors and windows (including sills, sash, screens, and mechanics)
• Floors and ceilings
• Steps, stairs, and railings
• Fireplaces (if available)
• Smoke and Carbon Monoxide Detectors
• Foundation and floor structure
• Wall structures
• Furnace and air conditioner, if applicable
• Plumbing (including hot water heater, sinks, shower and tub, drains)
• Electrical (including wiring, circuits, light fixtures, and GFCI regulations)
• Rodent, termite, and other pest damage is evident or areas that are susceptible
• Exterior threats (such as trees too close to the house, moss on the structure, grading and drainage issues)
• Radon and lead paint testing (available at an additional cost)

What Happens If the Home Fails the Inspection?

When a home misses the mark with one or more of the VA’s Minimum Property Requirements or MPRs during the inspection process, you’ll need to:

• Ask the property seller to fix the problems: Sometimes, a home’s issues can be minor. For example, lead paint can easily be remediated, and a roof can be patched or replaced, and anything else that may be small and inexpensive to repair. You're back on track if the owner fixes the problems and the VA appraiser approves. This is the most common solution for the majority of appraisal problems.
• Ask for seller concessions: Major problems, including but not limited to replacing a dangerous electrical system or upgrading outdated plumbing, or a cracked foundation, may take too long to repair. In this case, you can simply ask the homeowner to deduct the cost of the repairs from the home’s sales price. The money you need for the repairs can go into escrow at closing, and you can make the repairs once you’ve purchased the property.
• Find another home: If you can't agree with the seller on a solution to fixing said issues, unfortunately, it may be time to start shopping for another home to buy.

Your luck depends on how much the seller agrees to cooperate and often will depend on the current market conditions. When sellers in a hot market have multiple offers, they’re less likely to work with buyers to complete the sale.

Now that you’ve learned about the inspection process, let’s look at the VA appraisal process and how they differ.

What Is the VA Appraisal Process?

A VA appraisal is required to qualify for a VA loan. A VA appraiser evaluates the property on behalf of the lender to ensure that the home's value is worth what you plan on paying for it. Ensuring that the appraisal meets the lender’s regulations will also be required. Unfortunately, the lender will not accept the loan if the home doesn’t pass the VA appraisal.

Here’s a step-by-step guide to the VA loan appraisal process.

Once you’ve found your dream home, entered a purchase contract with the seller, and applied for a mortgage with a VA lender, your VA loan appraisal process will start.

1. The loan officer will order the VA appraisal and schedule the appraiser’s visit to the property
2. The appraiser will assess the home’s value and check the home’s condition to ensure that it meets the VA’s Minimum Property Requirements (MPRs)
3. The loan officer will receive a report, including a notice of valuation, from the appraiser
4. If the home carries enough value to justify the loan amount and if it meets all MPRs, the appraisal process is complete, and your VA loan can continue
5. If the home fails to meet MPRs, but you still would like to proceed with the loan, the appraiser will have to do a second visit to the property once the required updates have been made before signing off on the loan
6. Modern, well-maintained houses priced at or below market value can be quickly pushed through the VA appraisal process.

But remember that the appraisal could expose issues that could complicate your loan.

What Are the VA Appraisal Requirements?

According to the Department of Veteran Affairs, every VA appraisal must include:

• Name the VA as the client on the appraisal report form
• Insert “Any Qualified Veteran” rather than the veteran's name in the borrower field of the appraisal report form
• Be performed within VA timeliness requirements
• Conform to Uniform Standards of Professional Appraisal Practice (USPAP),
• Meet the additional requirements that VA considers supplemental to USPAP, and be uploaded into E-Appraisal by the appraiser as a Portable Document Format (PDF) document.

What Are the Most Common VA Appraisal Problems?

VA appraisal issues will fall into two separate categories.

Category 1: A low home valuation: The VA’s appraisal report could receive a valuation that’s lower than your anticipated loan amount. This could pose a problem because your VA lender can’t approve a loan that exceeds the value of the home you’re buying.

Category 2: Failure to meet VA Minimum Property Requirements: The VA home appraiser will inspect the home’s mechanical systems and structural integrity to ensure it meets the VA’s Minimum Property Requirements or MPRs. If the home you’re buying fails to meet these VA appraisal requirements, you must make changes to continue your VA loan process. This could include speaking with the seller and communicating what needs to be fixed before going through the buying process.

How Long Does the VA Appraisal Take?

On average, it takes 7 to 21 business days to get your notice of value and MPR assessment back from the VA. Appraisal wait times will vary by location, depending on the current demand for VA appraisals.

This appraisal waiting period is another reason many buyers like to get their own private home inspection before getting the VA-required home appraisal. It saves the homebuyer time, and they don’t have to wait for the VA to go forward with the home loan.

Remember: You won’t need a VA appraisal if you’re getting a Streamline Refinance, also known as an Interest Rate Reduction Refinancing Loan (IRRRL), because the VA has already approved your home. But you need an appraisal for a lump sum from a VA cash-out refinance.

If you’re excited and ready to get the ball rolling, you can ask your VA lender to place the appraisal in a rush, but keep in mind it may cost more to elevate the timeliness of your request.

Let’s not forget about another step in the VA inspection and appraisal process, the Minimum Property Requirements (MPRs), to ensure the property is a safe and sound investment for the Veteran homebuyer.

Why are the Minimum Property Requirements (MPRs) Important?

The Department of Veterans Affairs has a set of Minimum Property Requirements (MPRs) that the home must fulfill to qualify for a VA loan. These Minimum Property Requirements (MPRs) help certify that Veterans and military families have a safe, secure, and sanitary place to call home.
Here’s an updated list of 2023 Minimum Property Requirements (MPRs):

• Clean, continuous water supply with sanitary facilities (toilets, showers, and washbasins)
• Adequate roofing that will last the foreseeable future
• Sufficient in size for basic living necessities
• Accessible from an all-weather public or private street
• Free of lead-based paint (Lead is a highly toxic metal that may cause a range of health problems, especially in young children that can cause damage to the brain and other vital organs, like the kidneys, nerves, and blood)
• Free of wood-destroying insects such as termites, carpenter ants, and carpenter bees, fungus, and dry rot
• Safe and sanitary sewage disposal
• Attics and crawl spaces must be accessible and adequately vented
• Working electric, heating, and cooling systems (HVAC)

Veterans have played an enormous role in our country, and the government wants to ensure they are continued to be cared for and protected in their brand-new homes!

You’re Ready!

Now that you’ve been made aware of the in-depth process of the VA inspection and appraisal process, it should make getting into that dream home a breeze! For peace of mind, have a budget set aside for the inspection, a back home (just in case this home fails and the seller isn’t willing to negotiate fixing problem areas), and get a good recommendation for an inspector that’s willing to investigate your potential home for you in advance.