Sometimes, you find a series of buildings or apartments where VA approval has already been given. These places are sometimes promoted towards people in the military and may even have preferable travel routes to bases and such.
However, in most cases, you need to get VA approval for the house you wish to buy. If you are looking to buy an actual home and not something like a theme park, then the appraisal process is pretty easy. Appraisals are rejected/failed for the five most common reasons below.
1 – There is Some Type of Fraud
The most commonly turned-down appraisals are ones where fraud is being attempted. This happens all the time, people come out of the military and read all about “Hacks to get rich” and all that nonsense and they think they can exploit the VA loans service to get rich quickly. The most common trick is to try to buy a house off of a friend for an overpriced amount, the military person defaults on the loan and the pair split the profits from the sale. The VA lenders are not stupid, there are hundreds of scams and the VA appraisers know them all.
2 – The Heating Systems Are Not Good Enough
It is not just about the coal fire in the living room. There are things like windows, window seals, wall insulation, roof insulation, and so forth. Some people are surprised that the house was turned down simply because a window had been smashed, but turned down it is. Sometimes, the house may be great, but the room in the extended area is not properly insulated and so the house’s appraisal fails. You can get VA loans for both a house and to fix up its heating and insulation, so consider asking for more if you think the heating efficiency isn’t good enough.
3 – They are Timeshares or are they Somehow an Investment
You are going to read articles about how to turn your VA loan into an investment. But, the VA lenders are very careful and will not allow you to turn your loan into an obvious investment. This means there are restrictions on the various types of buildings where people are told (correctly or incorrectly) that they will appreciate in value over the years. In short, if the salesperson was saying, “Buy now and in a few years you can cash in,” then your appraiser will probably say no.
4 – The Roof is Not Good Enough
There are many types of buildings where that are structurally sound, but the roof isn’t good enough and it causes rejection. The sad part is that, unlike the heating problem mentioned earlier, there is often no way to fix this. Having the roof re-done may include damaging or fixing up the neighbor’s roof. Sometimes the roof cannot be made more efficient, and sometimes the building is listed or zoned in a way that stops you from updating the roof. Unlike the others on this list, this appraisal failure is often a roadblock you cannot get around.
5 – The Building Simply Isn’t Good Enough
Perhaps you picked a “Fixer Upper” building because you took a look at your whatsmypayment budget calculator and discovers you couldn’t afford something better. Perhaps you wanted to flip the building to make a profit when you had paid off your house. The trouble is that you picked a house that was too dilapidated.
It is true that you can apply for VA loans to both buy a house and fix it up too, but you need to be very specific about what you intend to fix and how you intend to spend the money. If a house needs too much fixing up, then the VA lender will assume you have bitten off more than you can chew and will fail to approve the house.