VA Energy Efficient Upgrades after the Appraisal

There’s certainly something special about a well-constructed, older home. There’s a sense of character and a feel you get with an older home, that you just don’t get with the mass-produced homes of today.

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There’s certainly something special about a well-constructed, older home. There’s a sense of character and a feel you get with an older home, that you just don’t get with the mass-produced homes of today. We’ve all heard the saying, ‘They don’t make ‘em like they used to’, applied to the description of a home.

For active and retired service members, there’s a host of reasons that you may be interested in purchasing an older property. One factor may be your financial situation. As a prospective buyer, you’ll no doubt have a set price that your willing to spend on a home. Alternatively, you may simply prefer the style and aesthetic qualities more afforded by an older home.

With a VA Loan, service members, veterans and eligible surviving spouses are better equipped to make the leap towards home ownership. Provided by banks and mortgage lenders, Veteran’s Affairs guarantees a portion of the loan. Buyers are then given more favourable terms surrounding their mortgage. A VA Loan gives you a home loan guaranty benefit and other housing-related programs to assist you to buy, build, extend or repair a home for your personal use.

For people looking to purchase a home in a particularly hot housing market – for instance Atlanta, a VA Loan offers them a significant advantage. With a VA Loan, in most cases homebuyers are not required to have a down payment. In such a hot housing market, this means that service personnel are more readily able to obtain a mortgage and purchase a home.

For those looking to buy a home in the current market, there are incentives to provide Energy Efficient Upgrades (EEU). Energy efficient upgrades can enhance your property’s value, make your home more comfortable and healthier, and decrease your utility costs. Energy Efficient Upgrades allow qualified buyers to add into their purchase or refinance loan the cost of applicable energy improvements.

These improvements may consist of housing essentials such as heating and cooling systems, insulation and storm-proof doors and windows.

Any increase in your overall mortgage payment will then be offset by the savings made to your utility expenses.

Once you have placed an offer on a home, the first step for your lender is organizing a VA Appraisal on the property.

A VA appraisal ensures that the home is worth at least what you’ve offered to pay for it. In addition, it makes sure the property meets VA and lender guidelines.

After an appraisal is conducted, the recommended improvements will be compiled into a report that becomes available to the home buyer. The appraisal report will list any repairs that need to be undertaken.

The appraisal may require certain repairs to be made before your loan can be finalized. In this situation, you’re within your right to ask to seller to complete the repairs (sellers may be willing to spend the money if this means selling their home). Energy efficient upgrades may also be used to improve aspects of the property that have been noted in the report.

As prospective home buyers, it’s important to understand the appraisal process that’s associated with a VA loan. This is so that you’re able to properly evaluate what additional costs may be required before you can purchase the home.

When purchasing an older property, there is a likelihood that some work will need to be undertaken in order to bring the home up to VA lending standards. Some of the more common items that can appear on a VA appraisal as deficient include:

  • Mechanical systems: Electrical and plumbing systems must be safe.
  • Heating: The home’s heating system must be safe. For homes with a permanently installed non-electric, non-vented fireplace or space heater, there must be an approved oxygen depletion sensor.
  • Water: There must be a safe water supply, a water heater and an adequate method of sewage disposal.
  • Roofing: The roof must be deemed as adequate.
  • Basements and crawl spaces: These spaces must be dry, clear of debris and properly ventilated.
  • Property access: The property needs to have safe access from the street.
  • Health and safety hazards: There must be NO nuclear waste or asbestos present in the property.
  • No defective construction.

The VA places enormous importance on the appraiser to ensure that homes are safe and offer legitimate, long-term value for veterans.

Energy efficient improvements provide veterans and active service members with the opportunity to conduct many of the repairs that may be listed in an appraisal report.

For veterans that are wanting to buy an older home – especially in today’s hot market, this is a program that offers warranted value and appeal.