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Saint Paul Regional Office
Regional Loan Center
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VA Property Types
| Properties are divided into four categories for VA purposes: |
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| 1. Proposed Construction. This requires three compliance inspections unless the property is covered by an approved 10-year, insurance-backed protection plan or is located in a community approved by HUD for substitution of local inspections for the first and second inspection. The lender must provide two sets of plans and specifications, one for the appraiser and one for the compliance inspector. The appraiser's plans are returned with the appraisal. For LAPP cases, the staff appraisal reviewer must include the plans and specifications along with the copy of the NOV and an original of the appraisal submitted to VA upon issuance of the NOV. |
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| 2. Under Construction. If a property is beyond the first inspection stage, then it falls under this category. Generally these are only acceptable if the property is covered by an approved 10-year, insurance-backed protection plan or HUD authorized local inspections. These cases also require plans and specifications. For further exceptions, see the VA Lender's Handbook. |
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| 3. New Construction. If the property is complete except for customer preference items and escrowable exterior items or 100% complete within the past twelve months, it falls under this category. Customer preference items are not defined, but would include things like carpeting and painting. If there is structural or mechanical work to be completed, the property does not fall under this category. Finishing a basement is not a customer preference item. These properties are acceptable if covered by an approved, 10-year, insurance-backed protection plan or by a one-year builder's warranty. If the builder is one who is not more than occasionally involved with VA financing and who will not provide either a one-year VA builder's warranty or a 10-year insured protection plan, then the property can be accepted under section 10.08 (Change 1) of the VA Lender's Handbook. |
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| 4. Existing Construction. If the property has been totally completed for more than a year or has been occupied by an owner other than the builder, it is considered existing construction. |
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| Reviewed/Updated Date: October 7, 2008 |
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