VA financing shows up on a lot of Texas files, and around Joint Base San Antonio it can feel like every other contract. VA loans are a great product for buyers. For the file, they bring a few extra steps: the appraisal works differently, repairs can become lender conditions, and there are limits on what the veteran can pay.
Here’s what we track on VA transactions, and where they tend to slow down.
The contract: VA terms in the financing addendum
In Texas, the buyer’s financing goes on the TREC Third Party Financing Addendum, which has a section for VA-guaranteed loans. It includes the VA-required appraisal provision: if the price is more than the VA’s reasonable value for the property, the buyer isn’t obligated to complete the purchase or forfeit earnest money, but can choose to proceed anyway.
That provision is why the appraisal date matters so much on a VA file. Put it on the calendar with the option period and financing deadlines.
The appraisal and the Notice of Value
VA appraisals are ordered through the VA, not directly by the lender, and the result comes back as a Notice of Value (NOV).
- Tidewater. If the appraiser expects the value to fall short of the price, they notify the lender’s point of contact before completing the appraisal. That gives the agents a short window to send comparable sales and other supporting data. When it happens, speed matters: have the listing agent’s comps ready.
- Low value. If the value still comes in low, the parties renegotiate, the buyer pays the difference in cash, or the buyer exercises the VA provision and terminates.
Minimum Property Requirements and repairs
VA appraisers check the home against VA’s Minimum Property Requirements: safe, sound and sanitary. Items the appraiser calls out, like peeling paint on older homes, missing handrails or roof problems, become conditions of the loan.
The TREC resale contract speaks to this directly. Under Paragraph 7E, neither party is obligated to pay for lender-required repairs, including treatment for wood-destroying insects, unless they agree in writing. If they don’t agree, the contract terminates and the earnest money is refunded, and if the lender-required repairs cost more than 5% of the sales price, the buyer may terminate.
What that means for the file:
- Get the appraiser’s required repairs to both agents the day the NOV arrives
- Settle who pays in a written amendment before anyone starts work
- Schedule the repairs and the re-inspection around the closing date
Inspections, including termites
VA requires a wood-destroying insect (termite) inspection in areas it designates, which cover most of Texas. Order it with the rest of the inspections so any treatment or repair can happen before closing, not after.
Closing costs and concessions
VA limits which fees the veteran can be charged, and caps seller concessions at 4% of the value, not counting the normal closing costs a seller can pay. Paragraph 12C of the TREC contract anticipates this: when a government loan program prohibits the buyer from paying a charge, the seller’s contribution goes to those prohibited expenses first. The lender sorts out the details, but agents need to know early if the deal depends on the seller covering costs. The VA funding fee also applies unless the veteran is exempt, for example because of a service-connected disability.
Military moves and remote signings
Many VA buyers are relocating on orders. That can mean:
- A buyer who isn’t in town for the walk-through or the signing
- A power of attorney, which the lender and title company both need to approve in advance
- Reporting dates that make the closing date hard to move
Line up the signing plan with the title company and lender early.
A VA checklist
On VA files we add to the standard checklist:
- VA section of the Third Party Financing Addendum reviewed
- Appraisal ordered; expected NOV date calendared
- Comps ready in case of a Tidewater notice
- Termite inspection ordered
- MPR repairs tracked, with amendments and re-inspection
- Seller concessions confirmed with the lender
- Remote signing or power of attorney approved in advance
If VA files are a big part of your business in San Antonio or anywhere in Texas, we’ll run that list on every one. See also earnest money in Texas.
