VA Loan on Single Family Home with Commercial Zoning

[jmcamjr]

I am the listing agent on a property that is a legal non conforming Grandfathered single family home. The subject property is a restored 1922 Craftsman located in an urban setting in the City of Bremerton, WA. In 2005 the area had a commercial zone overlay it's original residential zoning. The city will allow 100% rebuild as Single Family Residence if destroyed.

There is a home in same zoning within 100 feet of subject property with a VA loan from 2011, and it's neighbor has an FHA loan from 9 months ago.
From and email the appraiser mentioned that if the subject property is destroyed past 75% it wouldn't be able to be rebuilt, as well as some statement in regards to their being only one other single family surrounded by commercial establishments and apartments. There are 8 single family homes in this small overlay, and the "apartments" mentioned are 2 4 plexes. I have confirmed with the city regarding the 100% rebuild, and am awaiting 100% rebuild letter.

The lender says I should contact the VA in Denver myself. Bremerton, WA is a Navy area, and it's highly likely that another VA buyer will come along.

Any help or insight would be appreciated, especially in regards to disputing this info.

Thank you

John M. Cameron

 

[glenn walker]

Sound like it may go VA , especially with a rebuild letter of 50% or more ... why did the lender NOT contact the VA in Denver, sound's like this may qualify for either VA or FHA if what you are stating is correct !!

 

[jmcamjr]

Thanks for your reply Glenn!
That is somewhat reassuring. My understanding is the lender did contact the VA who said they wouldn't lend "on a property zoned commercial."

Now bear in mind that the lender is working for the buyer and I represent the seller. So, it may be the buyer is just using this as a way out as is their right, but I don't think so. I am just trying to get to the bottom of it all, and determine if this property is VA eligible or not. I haven't contacted the VA yet. I am awaiting the VA Case # and then I will have my preferred lender pull the info.

Will VA loan on a property that's zoned commercial?
Can I dispute the appraiser's erroneous zoning and number of single family/apartment comment?

 

[gregb]

In my area there are several classifications of "commercial zoning," some allowing residential use. Using this Bremerton zoning map, please specify the particular zoning that applies to the subject property.
[url]http://www.ci.bremerton.wa.us/display.php?id=867[/URL]

 

[jmcamjr]

Thanks for your help Greg.

It's located DCC zoning, which allows residential only as secondary use, however it's Legal Non Conforming Use of Single Family use is grandfathered.

Here is Bremerton Land Use Code Link
codepublishing.com/wa/bremerton.html

See section 20.54-20.54.070

 

[gregb]

Here is the DCC zoning explicated. [url]http://www.ci.bremerton.wa.us/forms/city/precodified/4937zoningcode.pdf[/URL]

I am a recently approved VA appraiser, and not sure that VA has rules that would apply in this case, ruling out a VA loan. The DCC zoning description has no mention of legal nonconforming or grandfathered use. My guess is that the state of Washingtion may have rules that govern grandfathered use, or that situation is covered elsewhere in the Bremerton city codes.

 

[jmcamjr]

Thank you and yes I have read that code, and in my last reply posted the URL to the Bremerton Land Use Code with the section referencing Land Use and Non Conformity, but I can't post a link since I don't have the minimum number of posts.

 

[gregb]

Has the VA appraiser completed an appraisal of the property?

 

[jmcamjr]

At this point the appraisal has not been completed. After the email was sent out regarding the 75% rebuild and apartment/commercial to single family ratio, the lender and buyer put a stop on the appraisal since the property was deemed unacceptable by the lender/investors and VA. This saved them some $ on the appraisal process I guess.

Here is a copy of what I was sent.

The appraiser has emailed that the zoning on this property does not allow the property to be rebuilt if it is destroyed over 75%. That is a salability issue. I have no investor that will purchase a home that cannot be rebuilt if it is destroyed.
The appraisers email also indicated that this home and one to the south are the only single family homes in the middle of commercial and apartment buildings. That also would be a marketability/salability issue.

I also emailed the investor and they will not purchase the loan based on what the appraiser has said.

 

[gregb]

Based on the above, the lender has put a stop on the appraisal, not the VA. Sure, the stoppage was due to the VA appraiser's email. Have you seen the VA appraiser's email?