Homebuyers going through the Veterans Affairs (VA) home loan process often ask about the difference between a VA home appraisal vs home inspection. A VA appraisal and a home inspection are quite different since the appraisal is required with a VA home loan and is an evaluation of the value of the home you’re looking to buy. An inspection is not required for getting a VA loan but recommended to help you evaluate the home’s condition. We’ll describe more details about each here, so you understand the process for both.
Key Takeaways
- A home inspection is not a required part of your VA loan approval process, though it is recommended anytime you buy a home to ensure you know any potential issues or concerns before signing the final paperwork
- A VA appraisal, however, is required when getting a VA home loan and the VA has specific requirements the home and property will need to meet
- You manage the home inspection process yourself, while the lender will order the appraisal through the VA.
- Both your VA appraisal and inspection will have a fee associated with each
- These fees vary by location, but you can expect to pay at least $300 - $500 for a home inspection and $525 - $1,550 for a VA appraisal
- You'll typically pay your home inspector directly while your lender will collect the appraisal fee from you to pay the VA appraiser.
- You can ask your USAA Bank lending team any questions throughout the homebuying process to understand the VA appraisal and inspection or any other steps involved with your VA home loan
What is a home inspection?
A home inspection is not required by the VA loan program, but it is recommended. A home inspection provides a more detailed evaluation of the home's condition. It can help identify potential issues such as safety hazards, costly repairs, or factors that may affect your quality of living in the home.
What does a home inspection cost?
According to the National Association of Realtors, home inspections cost an average of $300 to $500. Home inspections costs are generally consistent across all loan types, including VA loans. Inspection costs vary based on your home’s location, the size of your home and property, and if there are hard to access areas such as a crawl space or attic. As the homebuyer, you’re usually responsible for paying the home inspector directly for the inspection costs.
The home inspection process
The steps you’ll want to take for your home inspection include:
- Find a reputable home inspector in your area. Your real estate agent may have suggestions for you of companies or inspectors they’ve worked with before.
- Confirm the inspector’s pricing and what they’ll deliver to you. They’ll usually provide a detailed report with photos and details of any issues noted throughout the inspection.
- Schedule your home inspection. If possible, it might be good to plan to be there for it so that the inspector can show you any major items in person at the home. However, it’ll likely take a few hours depending on the size of the home.
- Your inspector completes the inspection and provides you with the inspection report.
- Review the inspection report and determine whether you need to work with your seller to address any issues. In extreme cases, there may be issues that cause you to reconsider buying the home such as problems with the foundation.
Your home inspection checklist
As part of the homebuying process for any home purchase, home inspectors usually review:
- structural components like floors and walls
- windows and doors
- electrical systems
- plumbing
- heating and cooling systems along with insulation and ventilation
- the exterior, such as its roofing and siding
- any patios or decks the home has
- crawl space, basements, and/or attic spaces if the home has them
Your home inspection company may also offer additional services which often come with a premium price tag. These additional services could include:
- moisture detection
- rodent inspection
- appliance recall safety check
- infrared checks for hidden electrical issues or water leaks
- radon testing
- indoor air quality testing
- wood destroying insect inspection
- cost guides for repairs and renovations
You’ll usually have to decide if you think some of these other items are worth the cost and necessary for the home specifically. In some cases, depending on the property or its location, the VA may require additional inspections, such as a termite inspection (also known as a wood-destroying pest inspection) for homes in areas prone to termites.
How long does a home inspection take?
The timing often depends on the availability of your home inspector. Usually as part of the due diligence process in most home contracts, you have approximately 10 days to get the inspection and review the report. Most home inspectors are willing to work with you to schedule something in a timely manner since they know there is often a looming deadline for you to finalize any contract addendums to include requests of the seller. The actual home inspection with the inspector at the property usually takes a few hours, depending on the size of the property and home.
How to use your home inspection report
The results of the home inspection are then provided to you as the homebuyer in the form of a home inspection report. Often, you’ll want to use the home inspection report to determine if you want to ask the seller to make any repairs or reduce the cost of the home to allow you to account for items you’ll need to repair or replace.
A home inspection report may sometimes seem overwhelming – they can be up to 30 - 50 pages or more. However, you can ask your home inspector any questions and work with your real estate agent to understand more about it and what items are worthy of more attention. Some important items in your home inspection report that were not included in the appraisal requirements might be worthy of requesting updates as part of your contract in the form of money off the home’s cost, funds towards repairs, or requesting the seller make repairs prior to closing. If you request any repairs or updates to the home before closing, you should do a final walk through prior to closing to confirm everything has been completed properly.
What is a VA loan appraisal?
A VA loan appraisal is required with any VA home loan. A VA appraisal is performed by a VA-approved appraiser, who inspects the home and property, reviews its condition and features, and compares it to similar properties nearby in order to determine its fair market value. The appraiser submits a VA appraisal report, which is used by your VA home loan lender like USAA Bank to determine your property eligibility for a VA loan and the loan amount that will be approved.
Key acronyms and terms you may see with your VA appraisal
- MPRs: Minimum Property Requirements - these are the requirements that the property you’re purchasing must meet to be eligible to buy it with a VA loan; this is determined during the appraisal process
- AMS: Appraisal Management System - the online system used by the VA to score the appraisal for approval
- SAR: Staff Appraisal Reviewer - the person responsible for reviewing the appraisal
- NOV: Notice of Value - establishes the estimated reasonable value of the property
- UAD: Uniform Appraisal Dataset - helps improve the quality and consistency of appraisal data by defining fields required on specific appraisal forms and standardizing definitions and responses
- ROV: Reconsideration of Value - Process of providing valid sales data to the appraiser when they have indicated that the value may not support the agreed-upon sales price.
When does a VA appraisal happen?
Your lender will typically order the appraisal as part of the loan application process after a Certificate of Eligibility (COE) has been requested. Appraisers are required to get in touch with the contact provided who will give access to the property and home to schedule an appointment typically within two business days of receiving an appraisal assignment. The total process to get the appraisal can take between 7 - 21 days depending on your location and the demand for VA appraisers in your area.
What does a VA appraisal cost?
VA appraisal fees usually range between $525 to $1,550, but they may vary based on demand, availability of VA appraisers, and how spread out or rural an area may be (to account for travel time and distance). The VA has established fee amounts, which are based on the location of the home you’re buying. Details on the VA appraisal fees are available on the VA website.
Who completes a VA appraisal?
There are several people involved in the VA appraisal process, but it is clearly defined. In most cases, the VA will automatically assign an appraiser on VA’s appraiser panel to perform your VA appraisal. These appraisers who are independent professionals, and not VA employees, must continuously meet VA's qualification standards.
VA appraisal checklist
The VA has established Minimum Property Requirements (MPRs) to protect you as the homebuyer as well as lenders, servicers, and the VA. The home you’re buying must meet these requirements prior to the VA guaranteeing your home loan. This VA appraisal requires the appraiser to:
- estimate the market value for the property inclusive of street maps showing sales and values
- use the Uniform Standards of Professional Appraisal Practice (USPAP) and VA appraisal guidelines
- detail the property through a building sketch and photos
- note any readily apparent repairs needed for the property to meet the VA’s MPRs
- analyze the sales contract, options, or listings of the property
- provide comparable sales data that includes address, sales price, date of sale, living area, if the property was listed, and a copy of the listing with details about the property
- detail their certifications, as required by the state law where the property is located
Once complete, the appraisal report will be uploaded into the VA’s online system to be electronically scored by the VA Appraisal Management System (AMS). After that, a Staff Appraisal Reviewer (SAR) who is either from your lender, your servicer, or on the VA’s staff reviews the appraisal and issues a Notice of Value (NOV) to you as the homebuyer.
What will fail a VA appraisal?
When a property fails a VA appraisal it means that the property is ineligible for VA financing because it did not meet the VA's MPR requirements. The VA notes that “MPRs help ensure the property is safe, structurally sound, and sanitary." MPRs may also differ based on the property’s location. Examples could include:
- homes with heating systems that don’t keep the livable areas to at least 50 degrees
- properties that are subject to regular flooding
- properties that don’t comply with applicable zoning ordinances
- visible evidence of continuing settlement, excessive dampness, decay, or termites
- any issues with a continuous supply of safe and potable water at the home
- the market value determined during the appraisal is lower than the sales price
Requesting a Reconsideration of Value (ROV)
The VA has a process known as the VA Tidewater Initiative, which addresses situations where an appraiser believes a home's value may not support the agreed-upon purchase price. In such cases, before submitting the appraisal report, the appraiser notifies the lender. This provides an opportunity for the buyer, real estate agent, or other relevant parties to submit sales data, such as recent comparable home sales, to support the home's sales price.
Additionally, if you think that the value of the home you're buying wasn't accurately calculated, you can request a Reconsideration of Value. The VA lays out the complete details of ROV request requirements here. Different sales data, a disagreement with the analysis of sales data, or not accounting for updates or improvements could be some reasons to submit a ROV.
What do you do if your home fails a VA appraisal?
If the VA appraiser identifies issues during the appraisal inspection that do not meet the MPRs as previously discussed, the property may not be eligible for VA financing. Some MPRs can be repaired to make the property eligible, but not all. It is important that you speak with your lender or real estate agent to determine what options are available.
Will a VA appraiser call out repairs needed?
The VA’s minimum property requirements documentation notes specifically that while VA appraisers must note any readily apparent repairs needed, they won’t check mechanical systems or appliances. The appraiser is responsible for estimating the property value of the home you’re buying to ensure that the value is sufficient for the proposed VA home loan, while confirming that the property meets all MPRs. A home inspection will involve a much more detailed and lengthy inspection of both the home’s inner workings and outside features to determine potential issues.
How long does a VA appraisal take?
The turnaround time for a VA appraisal depends on the location of the home you’re buying, usually ranging between 7 and 21 days. You can find details on current timeliness requirements on the VA website. VA appraisers are also required to respond by the next business day when contacted by the appraisal reviewer, a lenders or servicer’s SAR, or VA staff about the status of an appraisal or to discuss an appraisal report.
Tools and resources provided by USAA Federal Savings Bank should be considered general advice and for informational purposes only. All information is subject to change without notice and may not apply to all members. Products, services or features mentioned may not be offered by USAA Federal Savings Bank. The information contained is not intended to represent any endorsement, expressed or implied, by USAA Federal Savings Bank or any affiliates.
Learn more about any part of the VA home loan process
If you’re interested in exploring a VA loan when buying a home, speak with USAA Bank to learn more. Just fill out this form, and we’ll get in touch to share more about the savings, costs, and benefits of a VA home loan.
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