Deciphering the VA Lender’s Handbook Chapter 14 Part 2
In the last article we gave an overview of VA loan construction inspections and covered some basic information that this article (and following articles on Chapter 14) will build off of. If you haven’t read that article yet, you should go back and read it before moving on with this article. The first thing you need to know in this article is that . An appraiser’s main job is to determine a fair market value for the home being financed with a VA loan and make sure that the home meets the VA’s Minimum Property Requirements. This appraisal is not an inspection. An inspector’s job is to make sure that the build and construction of the home is up to professional quality and is safe for habitation. There is some overlap in what they do, but the inspector doesn’t care what the value of the home is; the inspector only cares whether the plumbing, wiring, framing, and roofing were all done in compliance with code and using professional methods.
So, now that we know the difference between an inspector and an appraiser, let’s talk about how inspectors are assigned. The VA is the one who assigns an inspector from its roster of inspectors, and it does so “without favoritism or discrimination”. In most cases, the inspector is chosen at the same time as the appraiser, but if the appraisal requester chooses not to request the inspector at the same time and the Notice of Value will be issued by the VA staff, then the inspector can be assigned at the time that the VA issues the Notice of Value. In some cases, the inspector might be assigned before the appraiser is assigned. This can happen in cases where waiting for an appraiser to be assigned would delay construction. If you want to request an inspector before requesting an appraiser, then you need to work with your lender to submit a written request which includes the following:
- a statement of understanding of the special nature of the procedure and the fact that inspection fees will be paid whether or not a VA value notice is issued, and
- construction exhibits which are properly certified in accordance with Chapter 10, section 10 of the Handbook
Once an inspector is assigned by the VA, the builder is expected to communicate directly with the inspector to schedule the inspection(s). If you are the builder, make sure to get the inspector’s contact info so you can do so. The construction may be subject to up to three inspections, which are officially referred to as “compliance inspections” on VA Form 26-1839. Inspections are different based on which stage they are in. Chapter 14 talks about the different stages and what the inspectors specifically look for in each stage.
In the initial inspection, the inspector needs to look for and note any absence of VA Poster 26-83-1, Equal Employment Opportunity is the Law. If the builder fails to prominently display the poster, it will be listed as a noncompliance item on the inspection report. Every contractor (and subcontractor) is required to display the poster in noticeable places at any job sites that are being covered by VA value notices for proposed construction. The VA may not require this if you are making repairs or improvements to an existing home, especially if you are doing the work yourself. Check with your lender to be sure. If the home is in an area with significant concentrations of Spanish-speaking people, the Spanish version of the poster must be posted next to the English version. The VA takes this poster very seriously; if the poster is not up, the VA will inform the builder that no further inspections will take place until the poster is being displayed.
The VA does, however, provide the posters to the builder along with the NOV (Notice of Value) if the VA issues the NOV. If the builder needs additional posters for adequate coverage, they can contact the VA Forms and Publications Depot. In the next article, we’ll start covering the rest of the information in the inspection stages.