There is a lot of misinformation and misconceptions with the FHA and VA loan programs. These are both great programs for the right buyer but they require additional steps to get to the closing table compared to a traditional loan. I am going into this blog as a Home Inspector so I’ll focus on this side, I won’t get into loan rates and down payments and all that stuff. For information on the mortgage sides of these loans talk to your mortgage person.
A VA loan is for military veterans and active duty military people.
A VA loan WILL require a pest inspection. The pest inspection being referred to is the NPMA-33. There is a blank copy of this form at the bottom of this page. This is a government form that either a qualified home inspector or a pest inspector will need to fill out. A pest inspection is free from some home inspectors with their inspection, or a pest company normally charges around $150-$200. The inspector will need access to the home and will check all areas for Wood destroying organisms. The VA does not care about mice or squirrels or owls, whatever you got. The NPMA-33 form is for Termites, Carpenter Ants, Carpenter Bees and other Wood Destroying Organisms. If there is damage from WDO’s or live WDO’s the VA may require they be repaired or removed before releasing funds. This form also requires signatures from both the buyer and seller.
A VA loan will require a water test if your new home is on a private well. The water test will need to include the following:
- Coliform and E.Coli Bacteria
If this water test comes back poorly things will need to be corrected and the water re-tested before you can purcase the home.
You can and should be testing for more things in your water like Arsenic and Radon but they are not required for your loan. If you want to test for more things you absolutley can, what we do is split the water results onto a VA page and a personal page. The VA should never see the personal page. Knox Home Inspections charges $125 for the VA minimum water test. Other companies may charge more or less.
The VA will require paid invoices on water testing and pest inspections. However, the pest inspection cannot be paid for by the buyer… wait what??? WHY? Honestly I have no idea why. One way around that is to get creative with the invoices or have someone else pay for the pest inspection. If anyone knows why this is the case please let me know, I have asked many people and can’t get a direct answer.
An Appraisal is required also. This is a person that will come to the property and assess its estimated value. The VA appraisers also check for things inside and around that house that ensure the house qualifies for this loan. Things like peeling exterior paint, damaged siding, damaged roofing, live wires, knob and tube wiring, missing handrails, missing smoke detectors, etc will cause problems and will need to be addressed before the VA will release funds for you to purchase the home. There are many more things that may come up as requirements during the appraisal.
Things not required by the VA:
- Home Inspection
- Septic Evaluation
- Radon Air Test
Should you have a home inspection, septic evaluation and a radon air test? YES! Will the VA require them. No.
The FHA loan will require an appraisal similar to the one in the VA section above. The appraiser will check for things like peeling paint, handrails, is the heat working, is the roof falling in, etc.
The FHA will sometimes require a pest paper and or a water test, but not often anymore. Check with your mortgage person about this. Sometimes if you are getting grant money or some state programs they will require water testing or pest papers.
My Personal FHA Loan Story
My current home was purchased with an FHA loan. We got a low down payment and a pretty good interest rate. The FHA appraiser did flag a few things, one was this storm door on the side of the garage that I have not used in 2 years of living here….
Obviously this door needs to be replaced, and it was required by the FHA appraiser to move forward with our closing and purchase the house. AT THE SAME TIME, the appraiser missed not 1 but 3 live wires similar to this one…
These 3 wires were very easy to spot, one in the garage, one in the basement and one in the attic (pull down stair easy to get to). So we got the door fixed and a few other things and we were good to go. They did not make us fix the wiring. Of course we did fix the wiring as soon as possible but it was puzzling why the door and some paint was mandatory to fix but the wiring was not. The rotted storm door is not going to kill anyone, but the wires could kill you pretty quick.
On the Home Inspector side of things, not as the buyer, I have heard it all. Some issues will be called out by appraisers and some will not. You never know what you are going to get. It is a gray area / judgement call in many cases and it is different from house to house.
As always, talk with your Real Estate Agent and Mortgage Specialist and ask them all of the questions. If you are doing a home inspection talk with your home inspector. Ask all of the questions, there are no dumb questions, only the ones you don’t ask. It is better to be ahead of the game and know everything before hand, and also get everything done as soon as possible. You don’t want to find out that you need a water test when it is 2 days away from the closing table. Thank you for reading. If you have any questions feel free to call us, or fill out the contact page on our home page and send us an email.