What are VA loan appraisal and inspection requirements?

VA loan inspection requirements are often conflated with VA loan appraisals, which carry specific requirements not typical of an appraisal for a conventional loan. These additional requirements can often be perceived as a con of VA loans, but they don’t have to be.

VA loan appraisals look at more than just the fair market value of the home (as a conventional appraisal does). They also evaluate the condition of a home to ensure that it meets the VA’s minimum property requirements. They are a required part of the VA loan approval process, and not passing the VA loan appraisal could mean the delayal or denial of your loan application.

In contrast, a home inspection is not a required part of the VA loan approval process. This inspection gives detailed insight into a house's condition, and homebuyers using a VA home loan can benefit by getting a home inspection in addition to their VA appraisal.

VA loan appraisals vs. inspections

Although only a VA loan appraisal is required for VA mortgages, it’s best for homebuyers to get an appraisal and an inspection before buying their home. Doing so will ensure that the home meets the VA’s standards, and that the homebuyer is informed of the house’s condition.

What is a VA loan inspection?

There is no specific home inspection needed to get a VA loan, and home inspections aren’t required by the VA to get approval for a VA loan. However, ordering a home inspection is still a good idea — this assessment will give you detailed insight into the structural integrity of the home, and help you to identify immediate, near, and long term repairs needed to keep the home safe and functional.

Homebuyers can order a home inspection for an average of $300 to $500, usually after the seller has accepted their offer. While that might seem like a hefty sum to pay out of pocket, the inspection could save you the time, hassle, and cost of significant repairs. If you have an inspection contingency, you could even walk away from the purchase if the work needed is too much for you, or negotiate with the seller to cover some or all of the costs as a part of their seller concessions.

→ Learn more about how to walk away after a bad home inspection

What are VA loan inspection requirements?

Since the VA doesn’t issue specific guidelines for home inspections, the requirements are the same as a standard home inspection. Just ensure that the home inspector has access to the interior and exterior of your home, including crawl spaces and attics, and be prepared to host them for two to four hours.

Pest inspections for VA loans

In some areas, the VA requires a pest inspection in order to guarantee the loan. The goal of a pest inspection is to provide a thorough examination of the property to evaluate signs of unwelcome guests (like ants, cockroaches, rodents, and more).

The VA requires homes in warm, moist climates that are vulnerable to termites to get a pest inspection. That includes all of the following:

• Alabama
• Arizona
• Arkansas
• California
• Connecticut
• Delaware
• Florida
• Georgia
• Hawaii
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maryland
• Massachusetts
• Missouri
• Nebraska
• Nevada
• New Jersey
• New Mexico
• North Carolina
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Virginia
• West Virginia

And if you live in one of the states listed below, it will depend on the county you’re in. Talk to your mortgage officer to determine if a pest inspection is necessary for your property.

• Michigan
• New Hampshire
• New York
• Vermont
• Wisconsin

What is a VA appraisal?

VA appraisals are a mandatory requirement of the VA loan process. The goal is twofold:

1. Determine the fair market value of the home: The fair market value of a home is the amount the home is worth as determined by a licensed real estate appraiser. Lenders require homes meet or exceed the total loan value in order to ensure that the property is adequate collateral for the loan.
2. Ensure the property meets the VA’s minimum property requirements (MPRs): The VA has a strict set of rules for the types of homes they will guarantee a mortgage for. A part of their job, VA appraisers must ensure that the property meets those requirements.

What are VA loan appraisal requirements?

The requirements of a VA loan appraisal are unique from the requirements of a typical appraisal. Like a traditional home appraisal, the home must appraise for the purchase price or more. Unlike a traditional home appraisal, a VA loan appraisal must also meet the minimum property requirements.

How to pass VA loan appraisal requirements

Some sellers may be wary of selling to a buyer using a VA loan because of concerns about passing a VA loan inspection and appraisal requirements. It’s a common myth that these requirements make VA loan closings take longer, however, closing timelines for both VA and conventional loans typically take 40 to 50 days.

Buyers and sellers can prepare by familiarizing themself with the “three S’s” of VA loan appraisals: 

• Safe: Homes must be safe to live in. That means all mechanical systems are in good working condition, there aren’t any hazards (like exposed wires or peeling paint), and decks and stairwells have guard and handrails.
• Sound: They must also be structurally sound. That means free of foundation, drainage, or ventilation issues, as well as large holes in floors, walls, or ceilings.
• Sanitary: Lastly, homes must have sanitary sewage disposal systems and be free of pest or termite infestations.

The three S’s are just an overview of appraisal requirements. Reviewing the minimum property requirements will give you a deeper understanding of what the VA appraiser will look for during their inspection.

VA minimum property requirements (MPRs)

The VA’s minimum property requirements are designed to ensure that the property is safe, as such, their stipulations are mainly focused on guaranteeing the property’s well-being.

• Space: The home must have adequate space for living, sleeping, cooking and dining, and sanitary facilities.
• Access and encroachments: The home must be accessible by road year-round, and if it is accessed by private roads, they must have a permanent easement managed by a homeowners association (HOA). In addition, the property must not encroach on others.
• Hazards: There must be no natural hazards (like flood zones or sinkholes) or environmental contamination (like radon gas or asbestos).
• Gas, eclectic, and other utilities: Homes must have working utilities in good condition.
• Water and sewage: The home must have year-round access to clear water for drinking, showering, and other sanitary purposes. There must also be hot water and a safe sewage disposal system.
• Home structure: The structure must be in good condition with a working roof home with at least three years of life in it.
• Crawl spaces and basements: These areas must be easily accessible and free of damage from pests, mold, or other infestations.
• Signs of deterioration: The home must be free of signs of deterioration.
• Pools: Pools are permitted but they must not have a diving board. The pool must be in good condition and free of hazards.

What to do if the house fails a VA loan appraisal

If the home doesn’t meet these requirements, the loan approval may be delayed or denied entirely. Here are your options if issues come up in your VA loan appraisal:

If the appraisal is low you can either appeal the appraisal or get the purchase price down to the fair market value. There are three ways to do this — ask the seller to lower their price to the appraised amount, pay the difference in cash, or walk away from the sale.

If the home doesn’t meet MPRs, the seller may fix them as a part of their concessions. This can be as simple as removing a diving board from a pool (since diving boards are prohibited by VA lenders) or as involved as repairing cracks in the home’s foundation. You may also be able to apply for a MPR waiver, to be approved by the VA and lender.

If you’re still unable to get your property to meet these standards, you may not be able to use a VA loan to buy your home. But other types of mortgages may be available.