Waiving First and Second Stage Inspections

The requirement for a first and second stage VA inspection is waived in all proposed or under construction cases in which both of the following requirements are met:

·   The property is located in an area where the inspection procedures of the local building authority are acceptable to the Department of Housing and Urban Development (HUD) for loan insurance purposes, and

·   a third stage (final) VA compliance inspection is performed by a VA fee inspector assigned by the VA office of jurisdiction. 

Exception

This provision has no affect on other proposed or under construction-related VA requirements and does not apply to cases involving a VA Specially Adapted Housing grant.

Lender’s File Documentation

For each loan processed under this provision, the lender’s loan origination file must include both

·   a properly executed clear third stage (final) compliance inspection report on VA Form 26-1839, and

·   an occupancy permit or other appropriate documentation issued by the locality to verify that all construction has been acceptably completed.

Discontinuing VA Reliance on Local  Inspections

VA may discontinue relying on the inspections of a particular building authority if VA staff detects

·   excessive construction deficiencies, or

·   construction complaint activity in that building authority’s jurisdiction.