Home Buying in 33626>Question Details

Sarah, Home Buyer in Orlando, FL

What is the truth about 0% Down through the VA?

Asked by Sarah, Orlando, FL Mon Jan 5, 2009

There are so many different stories regarding VA inspections, we can't get it straight. What is the truth regarding 0% down through the VA WITH a bank of America mortgage? So many agents keep telling us that some houses we've seen, built between 2004 and 2006, will not pass a VA inspection; However, that is not the information we have gathered ourselves from VA informational sites:

From our understanding, all the VA will do is appraise the property to ensure it's worth what you offered, and makes no guarantees regarding the property we choose to live in. Why do agents keep telling us that if an appliance is missing on a nearly new home that it won't pass a VA inspection? We made an offer on a short sale (built in 2004) and the agent told our agent she doubts it will pass a VA inspection. It has a few carpet stains, missing some appliances, and that's it.

What is the real story with VA 0% down WITH a bank lender....and VA inspections?

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Trey Miller’s answer
Hi Sarah,
I found this information on the VA website.
Q: What can VA not do?

A: Guarantee that a home is free of defects. VA guarantees only the loan. It is your responsibility to assure that you are satisfied with the property being purchased. The VA appraisal is not intended to be an "inspection" of the property. You should seek expert advice (a qualified residential inspection service), as necessary, BEFORE legally committing to a purchase agreement.

If you have a home built, VA cannot compel the builder to correct construction defects although VA does have the authority to suspend a builder from further participation in the home loan program.

VA cannot guarantee that you are making a good investment. VA cannot provide you with legal services.
I recently had a couple use a VA loan to purchase a home in the Brandon area with 100% financing. I have to admit, it wasn't missing any appliances but I'm not sure the VA appraiser even entered the home to find out. Hope this helps and good luck with your purchase.

Trey Miller
Prudential Tropical Realty
1 vote Thank Flag Link Tue Jan 6, 2009
Sarah you should get a copy of the va guidelines from your loan officer. You may be able pull them off of the va web site as well. Basically the appraisal is like an inspection. You have to have a stove, the water and sewer have to function, if well and septic pass water and septic test, heat has to work, floors have to have covering i.e. carpets, vinyl or hw wood. Roof cant leak, must have hand rails, no peeling paint and no safety issues broken windows, doors or siding. good luck with your purchase
Web Reference: http://www.ScottSellsNH.com
1 vote Thank Flag Link Tue Jan 6, 2009
Dear Sarah,

Some Realtors may discourage buyers from considering Short Sales because they can be very complicated and take several months to close--if they ever close at all. The asking price is normally not an approved sale price so you will also see short sale properties listed at unrealistically low prices, too. If you and your Realtor are patient, you may be able to get a great short sale bargain but the lender isn't going to let it go too much less than full appraisal value. The lenders do order appraisals so it's unlikely they will "give away" the house. Also with a neglected pre-foreclosure house, you may need to factor in more money for repairs. You may get a better bargain with a Bank-owned property since many banks want to liquidate properties FAST.

The VA appraiser is required to report any significant defects with a house (roof, major plumbing, visible mold, or electrical problems, etc.) but does not do a full inspection. Make sure you hire an independent inspector - go to ashi.org -- even if you decide to build a brand new home. I've seen at least 3 newly built homes with serious structural defects.

Hope this helps.

Alma Rose Kee, P.A.
Charles Rutenberg Realty, Inc.
Web Reference: http://www.soldontampa.com
1 vote Thank Flag Link Tue Jan 6, 2009
I am not sure why you are being told such conflicitng information about your VA loan and inspection. When the governemt insures a loan on a property, they want to make sure that there are no health or safety issues with a home. Along with that, they want to make sure that the home has working appliances. Stains on carpet are not health issues so that's not going to be a problem. Of course they may want you to have appliances in the home you are buying but that can be done after the close as well with an escrow holdback.

It's possible that your agent had a problem with a VA purchase a while back and is just wanting to make the process smooth and avoid any pitfalls that arise. I doubt that you will see such difficulties if that is the home you ultimately choose.

If you have any questions, please let me know.

Luke Allison
Flagstar Bank

Apply Online @ flagstarloans.com/lallison
1 vote Thank Flag Link Tue Jan 6, 2009
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