When I purchased my first home, I intended to use a VA loan. I thought that the VA loan was one of those awesome military benefits, but my realtor talked me out of it, saying it would take too long. I thought it was odd at the time, but I went ahead and pursued a conventional loan.
Years later, I’m finally getting ready to close on a new construction house, and I chose to use my VA loan. Unfortunately, everything that realtor said about VA loans came true.
First, the information requirements are insane. I sat down with my builder and went through the forms he had to fill out, since it was his first VA home. We had to list everything, right down to the trim finishes and what plants I was putting in the flower bed. Then we wrote out a property description, which seemed to want a listing of all trees on the property.
After all that detail, we sent it off to the VA appraiser. Reading English must be a secondary skill, because he kept telling the builder he couldn’t find the house, despite it clearly listed that the house had not been built yet. When the appraisal came back, it was significantly lower than the price I agreed on. When we looked at the homes used to estimate cost, they were all smaller and on significantly smaller lots (we’re talking whole acres here). No compensation was listed for the lot size, and the compensation for square footage was outrageous. In one case, a comp house was 250 square feet smaller, and the appraiser said that was worth $9,000. The average in the US is $90-$130 per square foot, and the area I’m moving to is more like $120. I can’t fathom how the appraiser thought $36/square foot was reasonable.
On top of all this, there was no mention of finishes, roof type, or anything else. Apparently we went through the process of filling out all those papers for nothing, because they weren’t considered at all in the value.
I’m not the only one with VA appraisal problems. Scanning veterans forums revealed plenty of complaints about the VA appraisal process. Phrases like “stuck in the stone ages” were pretty common, and every realtor I’ve asked has had similar experiences. Unlike a regular appraisal, I had to officially dispute this one, which I did with success. Plenty of others haven’t been so lucky, and they have had to completely restart their home search.
I don’t have a problem with the VA being picky about home appraisals. We certainly don’t need the government backing bad loans on crappy homes. Having seen the problem up close, I think we should be asking why a VA loan requires a mountain of paperwork that doesn’t seem to do anything for the appraisal process. Perhaps after President Trump is done cleaning up the VA health system, he can turn an eye towards a benefit that has been broken by bureaucracy.
This post represents the views of the author and not those of the Department of Defense, Department of the Navy, or any other government agency. It probably represents a lot of frustrated veterans tired of stupid bureaucracy in the VA loan process, but I can’t speak for them directly.
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