VA Loans Are Still Much Easier, As We Still Don’t Need Full Inspection Reports
I wrote this blog in early March: VA Loans Are Much Easier Now – No More Clear Inspection Reports!
The full blog is copied below but the gist of it was this: we can close VA loans without submitting full inspection reports to underwriters if we provide an NPMA-33 form instead.
As long as the NPMA-33 does not disclose any active infestations, we can use the form to close a VA loan and avoid having to fix everything else that might be disclosed in a full inspection report.
Needless to say, this has been a godsend for many lenders like us who specialize in VA loans, as we have been able to use the form numerous times now to close VA loans more quickly and easily.
Problem: Some Pest Inspectors Refuse To Fill Out The Form
Since writing that blog, we have received feedback from a few agents telling us their pest inspectors would not fill out the form, citing a ruling by the pest inspection board.
I am not disputing those firms or that ruling in any way, as I don’t want to get anyone in trouble or foster any rifts.
The sole purpose of this blog is to let readers know that we are successfully using the NPMA-33 form to close VA loans and that we have pest inspectors in both Texas and California who will fill out the form.
And, given that the use of the forms makes closing VA loans faster, cheaper and easier for our veteran clients, we want to encourage everyone to take advantage of them when they can.
My Full March 7th Blog:
VA loans are the best loans on the market – given their very low rates, the lack of mortgage insurance, the lack of loan limits, and the ability to put 0% down.
Their biggest drawback, however, was the fact they required full pest inspection reports, and that all “Section I” items (and some Section II items if they were “health and safety” related) had to be cleared.
Section I items include evidence of wood-destroying pests, dry rot, and fungus. Section II items include issues that can lead to Section I items later on (like soil buildups near wood, standing water, or a broken sprinkler) or health and safety issues like missing railings or floor coverings.
NPMA-33 Replaces Pest Inspection
The biggest drawback has now been significantly curtailed.
This is because we can now use the NPMA-33 form in place of a full pest inspection report. The NPMA-33 (also known as the “Wood Destroying Insect Inspection Report”) is a two-page form from the National Pest Management Association that is typically filled out by a pest inspector (who has no interest in the property or transaction).
Lenders can now use only this form (in lieu of full inspections) as long as it indicates there are no active infestations on the property.
This is obviously a huge boon for anyone looking to purchase a home with VA financing, as the clear inspection requirements scared away all too many sellers!
Again – with this new form, we are no longer required to submit full pest inspections to underwriting – and that can not only help get more VA offers accepted, and it can save VA deals altogether.
The most shocking aspect of the NPMA-33 though is that it is not anything new!
This form has been in place with HUD since 2004, but it was revised slightly in 2020. The main difference was a change in some vague language to gear the form more for real estate transactions. The changes also removed the entire section requiring “Evidence of Previous Treatment,” as this often proved too difficult to provide.
You can read more about the changes in this link, but the big takeaway is that this form eliminates the need to provide full inspection reports and clearances.
Why This Matters So Much
Not to be too redundant here, but with the NPMA-33, we now only need to focus on ACTIVE infestations of wood-destroying pests – and NOT on dry rot, fungus, and health and safety issues.
I should finally note that if there are ACTIVE infestations or visible issues with fungus or dry rot that an appraiser calls out, these items will still have to be addressed prior to close. Appraisers, however, are more willing to ignore many issues that inspectors cannot.
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