VA home inspections, what is it?

The reality is, there is no required VA home loan inspection. My name’s Evan Kaufman, your VA loan originator, here to help explain.

So, a lot of folks will get a home under contract and then they know, “Oh, I gotta get this home inspected and looked at. I got a VA loan. I’ve heard some things about a VA inspector having their own issues or things that they need fixed with the deal. How does that work?”

Well, the reality is the VA doesn’t require you to have a VA home inspection. I mean, there is no VA inspector that comes out and inspects the home.

What really happens is you have a couple inspection requirements that typically you have to have done, separate, with your real estate agent and working with your inspector.

And then there’s a VA appraisal that has minimum property requirements that the property has to meet that sometimes can mirror an inspection.

So, we’re going to talk on both of those separately.

First, up front for the actual home inspection, here’s what I always have to say: the VA appraisal or the VA appraisal process is no substitute for a home inspection.

But the VA does require that for some properties, you have a couple types of inspections done.

One of the main ones in most states, not all, but in most states is a termite inspection, otherwise referred to as a WDO (wood-destroying organism) inspection.

It’s got to be cleared, meaning there can’t be a lot of evidence of like termite damage.

How that one works is: you’ll work with your real estate agent, or you’ll work with your inspector to get scheduled a termite inspection.

And as long as it’s cleared on the paperwork and you sign off on it, we’re in good shape.

You’re going to submit that paperwork to your lender and they’re going to make sure everything’s cleared.

Here’s the thing: it’s not a VA inspector or VA termite person going out.

That’s part of your typical home inspection process.

The other big one that we see is sometimes a well inspection.

And here’s the thing with wells: just because you have a well doesn’t necessarily mean that you need to have a well inspection done for a VA loan.

Now, if it’s going to be the primary source of water that you’re drinking out of, that’s when the VA typically is going to have you have that well inspection done.

So, if it’s a water you’re drinking, that’s when you should know, “Oh, I have a well that I’m drinking that water. The VA might need to clear off on that.”

Again, the VA is not sending an inspector out.

You’ll have to coordinate with your real estate agent or with your inspector to get the inspection done, give it to your lender, making sure it’s reviewed, everything’s cleared and good to go.

If the well, though, is used for like watering the lawn and stuff, typically there’s no issue or need there.

Now, there could be other inspections that could ultimately be requested via your lender, but that’s usually more property-specific – if the property happens to have any random issues that are pointed out. They’re much more rare.

The biggest, most common one is the termite inspection.

And another note there, sometimes people assume that the seller has to pay for it, or someone else other than the buyer.

That rule changed just a year ago to where anyone can pay for that inspection, so that’s just perfectly fine if the seller, the buyer agent, the lender, whoever can pay for that if they want.

Now, there’s no restriction on it.

So, know that there’s a couple of those inspections that typically might have to be done, but it’s not the VA doing it.

You have to do that during the inspection process.

And you’re typically, when doing it, going to have a whole home inspection done.

And that’s separate from the appraisal, separate from the termite, and separate from well inspection, sometimes maybe done at the same time but usually different individuals.

I should say, some home inspectors, they might also do termite as well at the same time.

But that whole home inspection is usually where you’re going to hire a third-party person, you know, it’s Bob the inspector as I like to say.

Hey, they’re a jack of all trades.

They at least know when to tell you when something’s wrong.

They might not know how to fix it or exactly what it is, but like, “That’s just not right,” and then they help direct you to more specific niche people to get an idea if there’s issues with the home.

For example, a good whole home inspector, they’re going to be able to look at your roof, your siding, your window, your HVAC, all your major items, all the plugs, the light switches, all that good stuff, tell you if there’s an issue, and then you can investigate further with a specialist.

Because otherwise, think about it, if you’re buying a home, you gotta call up a plumber, you gotta call up a roofer, you gotta call up an electrician, you gotta call up all the trades.

That’s tough.

That’s why there’s a whole business of general home inspectors to help go do that.

But again, not a VA inspector. And technically, that whole home inspection isn’t a requirement from the VA.

So, when sometimes folks are like, “That VA inspector, that VA inspection, what is that?”

Well, there isn’t one.

There’s really the couple of needs that the VA needs on certain states and certain types of properties.

Again, the major ones, that termite inspection or the well inspection if it’s your primary source of water.

But then where most folks get hung up on is they’re thinking the VA appraisal and when the appraiser is checking the property for what are called the minimum property requirements.

I like to say it’s like their habitability check, making sure the property is effectively habitable.

And this is where, when your appraisal is being done, a VA appraiser, an actual person that is registered, certified with the VA, is going to come out and appraise your property.

So this is a normal appraisal that you’re having done, but it has to be done by a certain person directed by the VA.

Again, lenders don’t choose this person.

And that’s contrary to a lot of belief where conventional loans, lenders anyways, can’t pick individual appraisers.

They choose appraisal management companies to go do it.

But with VA loans, we request it to the VA and the VA directly hands it out to their own appraiser to come out and appraise a property.

And this is where they’re going to do that minimum requirement check.

And so, that’s where they’re going to do the appraisal value, look at the home, see if it makes sense and compares to other homes that are for sale nearby or that have sold and do their analysis just like a regular appraisal.

But they’re also going to look at the home and go, “Okay, if it’s caving in, we’re going to say that this is what’s called subject to fixing caving in the wall or big ones that we always see, peeling paint, windows not opening, massive defects with the house like a roof that’s just completely dilapidated.”

They’re not inspectors, so they’re not going to point out all these issues for you.

But they’re going to point out if there’s major habitability things.

They’re going to say, “Hey, I think this home is worth X, subject to these things being fixed.”

And that subject too is critically important because that all of a sudden becomes like an inspection list but really almost a requirement for the seller to fix.

And that is where the hang-up when people go, “Oh, the VA inspector.”

It’s not really usually the VA inspector.

It’s usually the VA appraiser has pointed out major items that need to be fixed to meet value for the property to make it worth it.

And then as your lender, like what we do, we need that appraiser to sign off on all those subject-to items.

So, that means it’s very important to pay attention to what that appraiser says.

And that’s where a lot of that hang-up can come for folks of, “Oh no, that VA inspector.”

It’s not that.

It’s technically the VA appraiser, typically, where folks end up seeing the issue and trying to work through what the VA appraiser needs to say that the property meets the minimum requirements for the VA and that the value that’s needed, that’s good for the veteran.

So hopefully that dispels a little bit of that myth of:

‘What is the VA inspection?’

‘How does that work?’

What do I need to do while I’m going through the inspection process?

Think of it this way: in most states, you’re going to need a termite inspection to make sure it’s cleared.

If you’re in states where that’s not much of an issue, reach out to me. I’ll gladly tell you which ones that is, then you don’t need to deal with that.

If it’s a well, you might need that inspection if it’s drinking water.

But then, so really, those are the two main ones that you need inspections done by third parties.

And then you’re probably going to want a third-party home inspection, completely separate from all the VA stuff.

You can do that or not do it.

Most people do to make sure they got a good home.

So that’s one that you can have done.

And then there’s the appraisal with a VA loan.

And that could lead to some potential repair needs to meet the value of the property, and that’s where most folks get hung up.

Now, some people assume that, “Oh no, that sounds like the VA appraisal process is going to be complicated. That can add an extra layer of complication to the deal.”

Well, the cool thing is that appraiser, unlike any other loan types, if they’re having issues with the value and stuff, they’ve got to pre-warn us.

You don’t get that on really any other loan type.

So, there’s some cool features to the appraisal process with the VA loan that you just don’t see anywhere else.

And I would argue that those benefits outweigh when they’re saying subject to some fixes.

The other thing is too, you can always request waivers for some of those fixes.

And we’ve gotten those cleared before.

That’s where it’s really important to work with a lender who understands that.

If you’re working with a lender that’s telling you, “Hey, we’re going to just pick our own management company,” – doesn’t happen on VA loans, it’s got to go direct to the VA.

Or if they don’t fully understand, “Hey, how we can do that waiver process or requesting reconsideration of value on properties,” – very niche things on VA loans. So that’s why we love working with that for our clients.

So, VA loan and inspections. Hope that demystified it a little bit. My name is Evan Kaufman, your VA loan originator. Take care.