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I'm in contingency to buy a house. I want to use a VA loan to avoid PMI. It appears that the house is part of an estate and the sellers are saying that they don't want to pay for any repairs which I understand. We had the home inspection today and it turned out good -- some roof shingles need to be replaced, some broken seals on some of the dual pane windows, the AC coolant line needs better insulation, etc. I got a good price on the house and wouldn't mind paying for any repairs required by the VA appraiser which I can't imagine being more than $5,000 and probably a lot less than that. I know that I'm not allowed to pay certain closing costs (which the lender is paying via a bumped up interest rate) but would the VA allow me to pay for repairs? If the buyer does get the repairs done, would the VA allow them to pass the cost on to me at closing? TIA.
You can pay for the repairs prior to closing. I'm tempted to say something ridiculously obvious like "make sure the deal is solid."
You mention that these items showed up on the Inspection - - this is the Contractor's Inspection, not the appraisal, correct? Because if the appraiser notates items in need of repair, your VA Amendatory Clause document that you and the sellers signed is your ticket to void the transaction and get your earnest money back, if worse comes to worse. However, if the appraisal notes items that the Lender says must be fixed prior to close, you basically confer with the seller and if they refuse to pay for items at a loss, you could look at getting the repairs done prior to closing, either out of your pocket, or in a manner wherein the contractors doing the repairs are paid at closing. This way the seller can raise the price by the amount of the repair costs, and the seller is not at a loss, the transaction closes, and the costs are essentially rolled into your loan.
It was a home inspection by an independent, licensed inspector paid for by me. The appraisal is separate.
The lender (who has a lot of VA experience) says that he thinks the required repairs will be minimal and indicated that the buyer is allowed to pay for repairs. The appraisal has been ordered so we'll see what they say and proceed from there.
Good news -- the appraisal came in over asking with no required repairs.
The only concern now are the "recommendations" on the termite inspection. There is no infestation but the inspector recommended things like trimming a tree away from the house and removing a small pile of bricks. I sent it to my loan officer and he's going to review and let me know if the "recommendations" are requirements or not.
May need to read up on VA home loans.
Buyer can't pay for repairs.. or I would of been done moved in
VA does allow.
9.09 Escrow for Postponed Completion of Improvements
General In some instances, it may not be possible to complete certain items before the
veteran wishes to move into the property. The escrow of funds can permit the
veteran-purchaser to gain occupancy of the dwelling prior to completion of
certain items which must be postponed due to weather conditions or other
circumstances. Such items include, but are not limited to
• walkways, driveways, and retaining walls
• exterior painting
• landscaping
• garages
• street paving and offsite drainage, and
• public sidewalks.
VA may permit the escrow of funds necessary to complete the unfinished
work later, and still issue evidence of guaranty.
Many of the repair items on the list above are part of new costruction/ new subdivision issues and are paid for by the builder/seller as part of a construction contract.
The VA does allow a winter escrow for some exterior repairs, like exterior painting, between Novermber 15 to April 15 in areas of the country subject to severe winter weather.
Keep in mind that lenders have their own overlays. I have seen lenders require exterior painting in January in bad snow years in New England. Waste of time, effort and money but their investors will not close with escrows.
For interior repairs such as interior painting, electrical, plumbing, etc. that is going to have to be done prior to closing. Many exterior carpentry repairs can also be done any time of the year.
Also keep in mind that VA escrows require one and half the amount of the repair to be placed in escrow. That can add up- often better to do the repair that to come up with all that extra money.
I had a level 2 chimney inspection and fire chimney cracked and needs to relined. The furnace chimney top cover is damaged
and needs to be replaced and screen put in . The furnace flu shows evidence of water marks traveling all the way down to
furnace in basement. Will the seller have to pay for repairs under V A Loan. Thanks totentools
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