VA Loan Appraisal: When a Home Is Certain to Fail the Appraisal Process?

A VA loan process entails multiple steps, one of which is performing an appraisal of the property for which the VA lender is to grant you a loan. It is carried out by an appraiser, hired by the lender.

What’s the purpose of a VA loan appraisal?

A VA loan appraisal is mandatory and it is carried out primarily because of two reasons:

  • To determine the fair market value of the property.
  • To ensure that the property is habitable and safe to live in. This is established in light of the Minimum Property Requirements (MPRs) as set by the Department of Veteran Affairs.

Arguably, the VA loan appraisal is the most crucial step in your application process. If the property fails the appraisal, your application will be rejected.

What are the reasons for which homes fail the appraisal?

There are many reasons because of which homes fail a VA loan appraisal. However, the most common ones are:

1) The house not being equipped with an adequate heating system

The deployment of an adequate domestic heating system is a must to pass the appraisal. This is sought to ensure that the home can provide comfortable living conditions to the to-be-residents.

If the primary heat source is unaccommodating, home buyers can request the seller to install a secondary heating system, so that the home’s heating needs can be efficiently met.

2) The electrical systems are not functioning properly

For any home to be considered ready for immediate occupancy, it must have a proper functioning electrical system. This includes adequate lighting, stable and sufficient voltage coming from electrical outlets and an intact grounding system.

3) The house roof is in a state of disrepair

Roof protects a house and every one inside it from external elements. As such, defects like leaks, tears, blisters etc. can compromise a roof’s structural integrity and make it unfit to serve its purpose. A house with a roof in a state of disrepair would never pass a VA loan appraisal.

4) The house windows are broken

This may sound a nominal issue for you, but for an appraiser it is not. Broken windows mean that the house is not energy efficient and there are security risks for the people living inside the property. In fact, one of the provisions in MPRs is related to broken windows.

Knowing what VA appraisers keenly look for when conducting an appraisal can help homebuyers to proactively address and fix the problems. After all, getting rejected in your loan application after putting in so much of hard work can really be upsetting and put a major dent in your dream of owning a house.

A BONUS read: COE – An important requirement for VA loans