It used to be that when dealing with VA loans, the loan killer was a low value. Now value is not as much a problem as property condition. There are no problems with my buyers as they have excellent credit and job history. However, the house they wish to purchase is in need of many cosmetic repairs and they have a limited amount of funds without their current home selling first. At only $100,000, this is not a bad deal. Per the appraiser, the house now meets the VA minimum standards in it's FAIR condition (this after some minor repairs). But no mortgage company will give them a VA loan without it being in AVERAGE condition. It needs to be noted that FAIR vs AVERAGE is basically an opinion and it changes depending on the neighborhood. This house would not be considered AVERAGE in a more prestigious neighborhood but it is AVERAGE for it's neighborhood. Common sense would dictate that if there is a MINIMUM Standard for a VA Appraisal that it should somehow also meet the MINIMUM Standards for a VA Loan. But as we all know, common sense does not always rule.
I'm OK with VA loans, but I've had my problems...My pet peeve is an appraiser from out of the area when you're trying to put together a deal...BUT, don't turn away from the business, work with what you have.
I haven't had any issues with VA loans, even with foreclosure properties. Perhaps the appraisers in each area look at them a bit differently. I will count my clients in the lucky category.
Are VA appraisal requirements simlar to FHA requirements? I have some buyers who are preapproved for 100% financing with a VA loan. At their price point, we are only seeing REO's and short sales and they all need some degree of work. I'm not sure we can get a bank (in either case) to agree to 100% financing, but if we do I fear the appraisal will kill the deal. Just how pickly are VA appraisals?
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