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LaWanda, Home Buyer in Louisiana

Is it true that the VA will only finance 90% of new construction if the home is under 1 year of age?

Asked by LaWanda, Louisiana Tue Jan 10, 2012

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VA defines properties in one of a variety of ways when it comes to the appraisal - existing construction, new construction, and proposed or under construction.

Existing construction means a home which has either been previously owner-occupied or had all onsite
and offsite improvements fully completed for one year or more. Other than an appraisal, nothing further on a home like that would be needed (unless after reviewing the appraisal VA determines more is needed, such as a termite/pest inspection or a well or septic certification if the property has one, etc.).

Newly completed properties (completed less than one year and never owner occupied) are OK if either (A) covered by a one-year VA builder’s warranty, (B) enrolled in a HUD-accepted ten-year insured protection plan, or (C) built by a veteran, as the general contractor, for his/her own occupancy. An exception may be made for a veteran who wishes to purchase a new home from a builder and will not provide either a one-year VA builder’s warranty or a ten-year insured protection plan.

For any property appraised as "new construction" or "proposed or under construction" the builder must have a valid builder identification number prior to a VA notice of value being issued (notice of value is the official determination on the home's appraised value), which requires a few forms (VA Form 26-421 & VA Form 26-8791) + builder information & a certification. If the home will be appraised prior to construction or during construction, then it is considered then the property needs to be inspected by VA or HUD during construction as well (if there is no VA or HUD inspector in the area, then the property must wait to be appraised as "new construction").

This information can be found in the VA Pamphlet 26-7, Chapter 10-Property Eligibility and Appraisal Requests.

Shane Milne | NMLS #81195 | Lending in all 50 states
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VA offers 100% financing to all qualified applicants
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