VA Appraisal Of New Construction

[Don Clark]

Thank You once again, Don.

The "subject to repairs" box is what has the underwriter (or processor) in a twist. They want a list of repair items and the associated cost. I do state that the Property meets MPR. The only 'repairs" may be touch up paint.

At that stage a 1004D Final seems like an unnecessary $100 charge to the Veteran.

VA does not require the appraiser to provide a list of repair items and cost on any appraisal except a Liquidation appraisal. Tell the lender to read the handbook. VA does not even require the cost approach on new construction.

 

[DonRico]

If subject meets MPR, check the "as is" box
If subject does not meet MPR, check the "subject to repairs" box

Is this statement true ?? This is the crux of the matter.

 

[Don Clark]

Is this statement true ?? This is the crux of the matter.

Depends. If an appraisal of new construction is by plans and specs then a final must be done to verify completion.

If a VA appraisal is done when most but not 100% of the construction is complete then by VA requirements it is done subject to repairs. In both cases if it is not 100% complete then it will only meet VA Minimum Property Requirements when it is 100% complete.

 

[Eli]

Don knows his stuff on VA. The VA makes sure you know your stuff. If you don't, they will teach you....quick.

The VA from a program standpoint does not want their veterans taken advantage of by anybody.

Keep that as one of your main focuses as an appraiser and you will have no problems. OTOH, that should be a focus for all appraisers on all appraisals.

 

[DonRico]

I know Don Clark understands the VA Process, and I value his expertise. This is an area that needs further clarification.

I don't think it should be an Appraiser Function to verify that the Interior Paint is flawless or that all the flooring is without blemishes. That's for the Buyer's Final Walk Thru. Here's the Dictum I've been working under as far as Customer Preference is concerned ---

In order for an Appraisal to be completed on new-existing construction, the house must be fully complete or complete up to the installation of customer/buyer preference items..

Those items typically considered as customer preference items are:

Kitchen appliances


Floor covering


Finished fixtures such as door knobs, cabinet handles, interior light fixtures, ceiling fans, bath mirrors, towel racks, etc.
Finished fixtures do not include faucets, bath tubs, sinks, cabinets, counter tops.


Some interior paint/wallpaper


Privacy fence and gates
Landscaping (including sod).

Grading is not a buyer preference item. It should be completed to insure that water is properly diverted away from the structure.


Air conditioner compressors (this item is included for security purposes).
All exterior work, including paint, should be completed at the time of appraisal except for those items affected by adverse weather conditions.
It is the responsibility of the fee appraiser to etermine if a property is eligible for appraisal (i.e. complete or complete to customer preference stage). If such a determination cannot be made through communication with the builder or lender, the appraiser must make a visual inspection. “

 

[Digger88]

I never use a 1004D. I use a Satisfactory Completion certification form. You could also do it on a letter. It is not 100% complete so needs a final inspection. The fee is minor in comparison to other cost.

pretty sure roanoke said we have to use 1004d's for well over a year now.

 

[Digger88]

I thought the $100 final inspection fee could not be passed on to the vet?

i never heard that. what i hear is that rush fees cannot be passed on if a lender is so inclined to offer them.

 

[Digger88]

And the VA specifically mentions "floor covering" as a Customer Preference Item. If it's complete to that point and meets MPR.....it should be as is. I absolutely hate to ding the Veteran for $100, It's un-necessary as long as the Vet gets a final walk-thru before closing.

if a property lacks carpet during initial inspection its existing on page 1 and subject to repair on page 2 requiring a final. if it lacked carpet at a final it is not 100% complete. i thought the 95% rule was whether to call it "under construction, subject to completion" or "existing, subject to repair"

 

[Hondo]

pretty sure roanoke said we have to use 1004d's for well over a year now.

Letterhead is still accepted at Roanoke RLC: Email Mar 25, 2014;

See the attached circular released yesterday that allows for appraisers to use the 1004D, Part B, Certification of Completion to certify completion of repairs.

Additional changes to highlight:

1) Appraisers may still use their letterhead for repair inspections.

2) Photos are now required; it is stated that both photos of completed repairs are expected to be included with the inspection/certification as well as photos of items of non-compliance must be included.

 

[Don Clark]

pretty sure roanoke said we have to use 1004d's for well over a year now.

Not true.

I use the Satisfactory Completion form. Have recently done 3 finals, and several hundred over the years. have never used the 1004D and have never had a directive from Roanoke stating that "we must". They have said we "could" use the form.