Good news! As of July 2017, there’s relief for VA program participants who run into roadblocks with unpermitted additions or modifications.
In the past, buyers of such homes were required to obtain a formal waiver, tear down and remove the unpermitted portion, or get a retroactive permit—which can take months. Across the islands, it is common to find homes that do not match official plans on file, with unpermitted lanais, extra rooms, walls, and other improvements.
The new VA appraisal policy harmonizes Hawaii policy with national policy and that of major federally backed lenders. Now, as long as other minimum property requirements are met, and absent major red flags such as termite damage/rot, water damage, structural issues, and older homes with cracking paint, the appraiser will issue their assessment “AS IS.” Permitting issues will no longer prevent a home from obtaining VA financing. However, it should be noted that the appraiser will not provide a value on the unpermitted section(s), which may decrease the value of the home slightly. If a permit is obtained retroactively, the value can be included.
The two major benefits of this policy are:
- Sales transactions will not be delayed by permitting issues.
- Refinance transactions that formerly could not be completed because of permitting issues can also go through.
If you are interested in using your VA benefits to purchase a home in Hawaii, put my wealth of experience as a leader on the Hawaii Life Military Specialized Team to work for you! Contact me, Cathy Possedi, at:
Cathy Possedi, REALTOR(B) CRS, SRS, SFR, MRP