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Veterans Administration Announces Updates to Chapter 12 of the VA Lenders Handbook

The Veterans Administration announced updates to Chapter 12 of the VA Pamphlet 26-7 (VA Lenders Handbook) on October 18, 2019.

The Topics revised in Chapter 12 Minimum Property Requirement are in regards to the Appraisal Process:

Topic 1: Minimum Property Requirement Procedures

This was revised to show how to include detached improvements in the appraised value.

Topic 2: Marketable Real Estate Entity

If more than one parcel is included on the appraisal, the appraisal needs to be made subject to all of the parcels being included on one deed.

Topic 7: Geological or Soil Instability, Subsidence, and Sinkholes

This whole Topic has been revised and addresses how the appraiser should address this type of issue on the appraisal, along with the new requirements of the builder.

Topic 8: Special Flood Hazard Area

Properties located in a FEMA Special Flood Hazard Area (SFHA) must be covered by flood insurance to be eligible. The appraiser can use their knowledge of the market area for regular flooding areas. The appraisers will indicate the map location for the subject; however, the lender is responsible to verify the properties actual location and if flood insurance is required. Did you know the Veteran could elect to obtain Private Flood Insurance.

Topic 21: Defective Conditions

Examples of defective conditions that would need to be subject to would include defective construction, poor workmanship, continuing settlement, excessive dampness/leakage, decay and termites.

Topic 34: Radon Gas

For proposed and new construction cases, the builder must certify radon resistance construction techniques were used.

Additional information regarding radon gas is available here:

You can read more details about the updates to Chapter 12 of the VA Pamphlet 26-7 here:


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