Multi Family Home and the VA Loan
(Based on experience & much trial and error
The VA will allow the purchase of up to a 4 unit Multifamily (MF),
so long as the Veteran lives in one of the units. However, other VA
rules make MF’s hard to acquire. As they need to be in move in
ready condition. Single Family (SF) rules that carry over are included
Keep in mind, MF’s, especially bank owned MF’s, are often in
‘as-is’ condition. Meaning, the seller or bank will not fix anything, so if
any of the following are present, the probability of the deal working
with a VA loan is negligible.
A home inspection for a MF, can run $700-$1000+ and mneeds to be in move in ready condition.
Single Family (SF) rules that carry over are included below.
(SF’s also need to be in move in ready condition.)
A Condex is a duplex style condominium development consisting of only 2 units. …
Lower prices, and no condo fees are the top benefits of a Condex. You also have your
own yard…with all it’s maintenance too! Sounds very similar to owning your own single
family property, other than each unit shares a wall. The VA is usually fine with
Read the remarks in the MLS listing carefully, if the words,
contractors, developers, investors, repairs, ‘as-is’, TLC, or there
is a negotiation fee of $1000-$10,000 beware, these are tells that
the property will not work with a VA loan.
Also if there are no pictures, then there is likely nothing good,
to take a picture of. A home inspection for a SF, can run $350-$750
1. The roof needs to have 3-5 Years worth of roof life left. 3-5 Years of
life is in itself hard to determine. Asphalt shingle roofs can last 20-
30 years. Things to look for are ceiling stains and leaks, missing
shingles, damaged or missing seals around any vents and chimneys,
warped sheathing, chimneys that need re-pointing (cement) between
the bricks, or missing bricks. Moss happens to roofs that are under or near tree limbs. This
is not such a big deal. There are sprays that will kill the moss, and it
will come off on its own. Also, make sure the bathroom fans are venting
out of the attic, if the vent is in the attic, the accumulation of
moisture can lead to mold in your attic.
2. Pest inspection. The Wood Destroying Insect Inspection
Report (Form NPMA-33). This report is necessary for any VA
loan, on any property MF, SF, or condos. Insects like termites,
powder post beetles, carpenter ants, carpenter bees, ect., can be
an issue. However, so long as the damage is minor, and not
structural, it is remedied, by treatment, by a pest company. Usually
$200-$1500, the VA will want invoices, and the treatment
documentation (chemicals used). If the damage is structural, then
a structural engineer is needed to assess the damage, and advice
on the proper repairs. Many sellers and buyers, will not want to
deal with this due to the expense. ($300+ for the engineer, and a lot
more money to repair)
3. Basements & Foundations. Some SF’s are older, some quite
old, over 100+ years old. Building practices, a century ago were not
as good as today. Often the foundations are lacking the proper
footings, beams and supports. This leads to uneven floors &
settling. Foundations in time need to be repointed, the gaps,
provide access to pest, to enter the property. Dirt floors allow for
moisture to enter the basement, and termites love wet/moist wood.
4. If near the ocean a river, lake, or wetland. Check to see if flood
Insurance is needed.
5. Electrical Systems. I have seen lovely Victorian properties, that
have what appears to be modern circuit breaker 200amp, electrical
systems. However, buried inside the walls is knob and tube wiring
or aluminum wiring, both pose a hazard that could cause shorts
and possible electrical fires. Other potential issues are items like
the Federal Pacific electrical box, they had a fire issue, and had a
lawsuit over said issue.
6. Plumbing Issues. Many SF’s still have an abundance of cast
iron plumbing. This has a service life of about 100 years, it rusts
from the inside out, so by the time is starts to leak, it will need to be
7. Paint Issues. Since 1978 lead paint has been banned. Lead paint can cause
health issues, especially in children under six. Paint chips, and
dust created from opening painted wood windowsills, that can be
inhaled by children and adults. The mandatory form associated,
with lead paint is, THE PROPERTY TRANSFER NOTICE. Many
owners do not test for lead. It is expensive to de-lead, and once
you test, you have to disclose the results. Whether this is right or
wrong, some sellers, prefer to remain willingly ignorant, to the presence of lead.
8. Mold is another thing to look out for. There are thousands of
types of mold. A small percentage can cause health effects. Mold
tests cost about $600-$1000+/-. Mold can grow on wood and paper,
in the presence of moisture. If the bathroom vents are vented into
the attic, or there is a dirt floor in the basement, mold is a
possibility. Inspectors, are not mold experts, they will say there is,
‘an unknown substance’ or something similar.
9. Asbestos. Some older properties may have asbestos tiles, or
insulation on the pipes. While a good insulator, and harmless, if not
airborne. It is harmful, if airborne.
10. Wells. Many SF’s are in towns and cities, with municipal water &
sewer. Municipal water & sewer is ok for VA. However, if they have
a well, the water needs to be tested by a 3rd party (often the home
inspector), for Nitrites, Nitrates, Ecoli, & Coliform. Essentially the
runoff from fertilizers, and bacteria. This carries over to MF’s as
well, & condos.
10.Septic Systems, if present. Otherwise known as a Title V
inspection. New systems have what is called a Certificate of
Compliance. These can be found at the town or city Board of
Health (BOH). These certify the septic system is operational, safe,
and in good condition. If you have city sewer, then this is not a
problem or concern.
12. Heat, Hot Water Systems & Utilities. Make sure they are in
good condition. Look for leaks, corrosion on the pipes and the age
of the systems. Tank water heaters only have a limited life, about
13. Radon. If there is a basement, you can request of the inspector,
to do a radon test. Radon is a radiological naturally occurring gas,
that come up from rocks in the ground. If detected in higher
concentrations, a radon mitigation system, can fix it, easy enough.
It is essentially a fan, that transfer air, under the foundation, to
outside the house $1000-$2000+/-.
14. Appraising. An appraiser will do a VA appraisal report. They will
look for safety items, like broken stairs, missing handrails &
balusters, chipping paint, ect. Important! Make sure all the
bedrooms have a window (that exits to the outside), door,
closet, heat, and is more than about 7×7 feet. Otherwise, it will
not count as a bedroom, and you will not appraise as high.
15. Garages & Sheds. The home inspector will have to include them
on a pest inspection. The appraiser may include any outbuildings,
as well, as well as check safety items, as mentioned before.
(Closing costs. VA loans have on average higher closing costs, but also have a
lower interest rate. Closing costs can include, the inspections, buyer attorney,
taxes, title work, title fees, title insurance & home insurance. Depending on credit
scores, income, and debt to income ratio. 2%-4%+/- of the value of the loan.)
Read the MLS listings carefully, sellers are supposed.
to disclose, material defects
James H Burton
CENTURY 21 Marathon
Licensed in MA, RI, & NH
77 West M St Ste 1 Hopkinton MA 01748
“A Sale is not something you pursue, it’s what happens to you, while you are immersed in servicing your customers”
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