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Pest Inspection and Appraisal Tips from the VA

Update to VA Termite Rules and Requirements

As of June 15, 2022, the VA updated its regulations to allow borrowers to cover termite inspection reports when the inspection is required. VA borrowers can also cover the cost if repairs are needed to ensure compliance with VA minimum property requirements.

For the latest rules and requirements, see our article covering VA loan termite inspection requirements by state.

I attended the National Association of REALTORS® Legislative Meetings and Expo in Washington D.C. this month. One of my favorite parts of this event for the past two years has been the visit to the Department of Veterans Affairs. This year's meeting provided more knowledge about the VA loan process and a few suggestions on dealing with difficulties that can arise in the VA appraisal process.

Clarity on Pest Inspections

Pest inspections were a hot topic among the agents on hand.

One of the unique requirements for VA loans is that the homebuyer is required to obtain a pest inspection in most states. But there are a few states where a pest inspection is not required, unless deemed necessary by the VA appraiser. Changes to the program as a whole require a change in regulations, which can take years. Staff at the VA said they have the authority to issue local variances ahead of regulations.

If an agent or lender wants a variance considered regarding pest inspections in their area, they would need to contact their Regional Loan Center. and then the RLC would be in contact with the Department of Veterans Affairs to determine if a variance is justified.

VA Appraisals

One of the concerns expressed in the meeting was there were too few appraisers in some areas. VA staffers explained that the Regional Loan Centers recruit and qualify appraisers. If an agent or other individual feels there aren't enough appraisers in the area, they should contact their local RLC's Fee Panel Coordinator, also referred to as the Construction and Valuation Department. The same goes for any complaints an individual has about a particular appraiser or appraisal situation. The VA also provides a fee schedule and timeliness requirements on their website.

They don't know there is an issue unless someone reaches out to them about it. As an agent with a thorough understanding of the homebuying process, you are in a position to take this action.

VA Loans Hit a Milestone

John Bell, Assistant Director of Loan Production and Valuation at the Department of Veterans Affairs, also shared some big-time news about this historic home loan program.

VA recently hit a quarterly milestone -- for the first time ever, there were more VA loan applications than FHA applications. This new record shows VA loans becoming more prominent in the real estate market, all the more reason for agents to educate themselves on VA loan basics.

Bell also said that education is key for agents to overcome misconceptions on the VA loan.

Several staff members from Loan Production and Valuation at the VA were also present, including:

  • Jeffery Bolla, Loan Specialist, Loan Policy Department
  • Maxine Henry, Loan Specialist, Loan Policy Department and Army Veteran
  • Erica Lewis, Attorney, Loan Policy Department
  • Scott Royle, Appraiser, Appraisal Department

I want to personally thank the VA for hosting this question and answer session, as I learned a great deal of new information as I am sure most agents in attendance did as well.