Home inspections can help buyers identify any potential issues with a home. But are they necessary when using a VA loan to finance the purchase? This article will answer that question.
With its large military population, Washington State sees its fair share of VA loans. In fact, a recent report showed that Pierce County, Washington was #7 in the country for VA loan usage (among thousands of counties nationwide). It’s a popular program among military members and veterans who are looking for a way to buy a home with little or no down payment.
Borrowers tend to have a lot of questions about this program, and many of them have to do with appraisals and inspections. Today, we’ll address one of the most common questions in this area:
Is a home inspection needed when using a VA loan in Washington?
To use a VA loan, borrowers must meet eligibility requirements established by the Department of Veterans Affairs. Generally, VA loans are available to active-duty service members, veterans who have met minimum service requirements, National Guard and Reserve members under certain conditions, and eligible surviving spouses. Borrowers must obtain a Certificate of Eligibility (COE) to verify their eligibility to lenders. In addition to service requirements, borrowers must meet the lender’s credit and income standards and intend to occupy the home as their primary residence.
In a separate article, we covered the difference between home appraisals and inspections within the context of VA loans. To recap: An inspector is primarily focused on evaluating the condition of the home being purchased, whereas the appraiser is mostly concerned with determining the property’s value.
If you want to use a VA loan to buy a house in Washington, you’ll need to have the property appraised. Having a complete home inspection, on the other hand, is usually optional.
The appraisal process for a VA loan is slightly different than the process used for a conventional mortgage loan (that’s not guaranteed or insured by the government). When a VA loan is being used to buy a house, the appraiser will determine the current market value of the property. But he or she will also review the home to ensure that it meets the VA’s minimum property standards.
In that way, the appraiser wears two hats. He or she is concerned with the market value, as with any home appraisal. But there’s also a basic inspection component built into it, to check for minimum property requirements.
A private home inspection is optional for VA loan buyers but strongly recommended; the VA does not require it as a condition of loan approval. Home inspection costs for VA loan buyers typically range from approximately $281–$500, depending on property location and size.
The VA-required appraisal — which checks both market value and Minimum Property Requirements — is a separate cost, starting at approximately $600 for single-family homes, and is paid by the buyer. In some states, a pest or termite inspection may also be separately required, costing $50–$150; re-inspections after repairs typically cost $100–$200.
The buyer is responsible for paying the home inspection fee, typically before closing rather than as part of closing costs.
So what are the VA’s minimum property requirements, or MPRs? There are too many to list here. But they can be found in the VA’s Lender Handbook (Pamphlet 26-7), which is available online.
Many of the MPRs cover basic property conditions that affect either (A) the value of the property being purchased, or (B) the safety of the occupant. In short, the home being purchased must be in good condition with sufficient livable space, and it must present no hazards to the occupant.
Note: This overview applies to basic home-purchase loans. In some cases, borrowers can qualify for VA loans that also provide funding for the alteration and repairs of a “fixer upper” type of property. There are separate requirements for that type of financing.
Appraisers look at a number of checkpoints during their review. This can include the home’s heating and cooling system, the roof, the water supply, electricity and more. If the property being purchased is generally in good condition and livable, it probably won’t raise any “flags” during the appraisal process.
When a property does not meet the VA’s Minimum Property Requirements, the appraiser will note the deficiencies in the appraisal report. The loan generally cannot close until those issues are resolved. In most cases, the seller is asked to make the necessary repairs before closing. Alternatively, the buyer or another party may negotiate to cover the cost of repairs, or the buyer may choose to walk away from the transaction if an agreement cannot be reached. In some situations, a VA escrow holdback may allow closing to proceed while repairs are completed shortly afterward, though this option is subject to lender and VA approval. Buyers should be aware that failing MPRs can delay or derail a purchase, which is one reason why having a private home inspection before making an offer can help identify potential issues early.
The VA funding fee is a one-time payment made to the Department of Veterans Affairs at loan closing. It ranges from 0.5% to 3.3% of the loan amount depending on loan type, down payment, and prior VA loan use. For first-time VA purchase loan users with less than 5% down, the fee is 2.15%; with 5–10% down it is 1.5%; with 10% or more down it is 1.25%. Subsequent users with less than 5% down pay 3.3%.
For VA IRRRL (streamline refinance) borrowers, a flat 0.5% funding fee applies regardless of prior use or down payment. Cash-out refinance fees follow the same structure as purchase loans.
Certain borrowers are exempt from the funding fee, including veterans receiving VA disability compensation for a service-connected disability, active-duty Purple Heart recipients, and certain surviving spouses. Exemption status is verified via the Certificate of Eligibility (COE).
Borrowers can pay the funding fee upfront at closing or roll it into the total loan amount. It is also possible for seller concessions — capped at 4% of the loan amount — to cover the fee.
Sammamish Mortgage offers VA loans to home buyers across the state of Washington and the broader Pacific Northwest, including Idaho, Colorado, Oregon, and California. Our experts can answer any questions you have about using this mortgage program to buy a house. Since 1992, we’ve been providing several mortgage programs and products with flexible qualification criteria to borrowers across the Pacific Northwest, including our Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans. Visit our website to get an instant rate quote or to use our online mortgage calculator. Or, reach out to us if you are ready to get pre-approved for a mortgage.
No. The Department of Veterans Affairs does not require a home inspection for VA loans in Washington State. However, a VA appraisal is required before the purchase is finalized in most cases.
A home inspection focuses on evaluating the overall condition of the property, while a VA appraisal is primarily concerned with determining the property’s market value. The VA appraisal also includes a review of minimum property requirements, but it is not as thorough as a dedicated home inspection.
Yes. Even though a home inspection is optional for VA loans, it is a cost-effective way to learn about the true condition of the property before purchase. It can reveal issues that a VA appraisal may not catch and provides peace of mind.
VA minimum property requirements are standards set by the Department of Veterans Affairs that a home must meet to be eligible for VA loan financing. They cover conditions related to the property’s value and the safety of its occupants, requiring the home to be in good condition with sufficient livable space and free of hazards.
The full list of VA minimum property requirements can be found in the VA’s Lender Handbook, also known as Pamphlet 26-7, which is available online through the Department of Veterans Affairs.
A VA appraiser evaluates the property’s market value and also checks that it meets the VA’s minimum property requirements. This review can include the home’s heating and cooling system, roof, water supply, electrical systems, and other key components.
In some cases, borrowers can qualify for VA loans that include funding for the alteration and repair of a fixer-upper property. These loans have separate requirements beyond the standard VA home purchase loan guidelines.
No. While both types of appraisals determine the market value of a property, a VA appraisal also includes a review to ensure the home meets the VA’s minimum property standards. This dual role is not typically part of a conventional mortgage appraisal.
VA loans are widely used in Washington State due to its large military population. Pierce County, Washington has ranked among the top counties in the nation for VA loan usage, reflecting the program’s popularity among military members and veterans in the region.
VA loans allow eligible military members and veterans to purchase a home with little or no down payment. The program also typically offers competitive interest rates and does not require private mortgage insurance, making it an attractive financing option in Washington State.
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