Are VA Loans Harder To Close?

Here are several common misconceptions about VA loans that need to be addressed:

• Length of Closing: A frequent objection is that VA loans take longer to close than conventional loans. This isn’t true; they typically close in about the same timeframe.

• VA Appraisal Deadlines: This one is actually an advantage of the VA loan, not a drawback. VA sets an appraisal timeliness standard for every market, built from customary timeframes for comparable conventional appraisals in that same area, and the appraiser must make contact to schedule the appointment within two business days of receiving the assignment. Appraisers who fail to meet VA’s expectations for customer service, accuracy and timeliness can be removed from VA’s fee appraiser panel. Conventional appraisals carry no requirement like that. The standard itself varies by area, so nobody can promise you a specific number of days, but the accountability behind it is real. See the VA Lender’s Handbook, Chapter 10, Topics 6 and 7.

• VA Property Condition Standards: Many people fear that the property condition standards for VA loans are excessively stringent. The actual bar is that the home must be safe, structurally sound and sanitary. The handbook is direct about the rest: an appraisal is not a home inspection, and the appraiser should not recommend repairs of cosmetic items, items involving minor deferred maintenance, or normal wear and tear. In practice, only minor items usually need attention, such as adding a handrail.

• Termite Inspection Costs: A wood destroying insect report is required on the Notice of Value whenever the property sits in a “very heavy” or “moderate to heavy” zone on the termite infestation probability map, and that covers most of the country, so plan on one in most transactions. It is not a deal killer. It is an inexpensive report, usually under $100, and it is there to protect the veteran from buying a home with hidden termite damage. The guidelines on who pays also changed. Under VA Circular 26-22-11, dated June 15, 2022, VA authorizes veterans to be charged the wood destroying pest inspection fee, so anyone in the deal can cover it: the seller, the realtor, the lender or the veteran. VA still encourages the veteran to negotiate that cost with the seller.