Building Rural or Unique? Here's the VA Appraisal Rule That Can Kill Your Loan
Ashley's Five Acres Almost Became a Very Expensive Lesson
Ashley found five acres just outside Charleston and fell in love with it fast. She started sketching house plans with a builder before she ever picked up the phone to talk financing. That's a common story, and it's also how a lot of rural VA builds run into trouble before they even get started.
The Rule That Catches Veterans Off Guard
For a VA new-construction loan, the appraiser doesn't just estimate the value of the home you're planning to build. The appraiser has to find three comparable home sales, closed within the last twelve months, from a reasonable distance to your property. In a typical subdivision, that's routine, there are recent sales everywhere. Out on rural acreage, or with a property that's genuinely unique in size, layout, or land use, those comparable sales can be scarce or nonexistent close by.
Why This Kills Rural and Unique Builds
When the appraiser can't find three qualifying comps nearby, they have to widen the search radius, sometimes ten or twenty miles, hoping to find something close enough in age, size, and land use to compare fairly. If that search comes up short, or the only sales available are too old or too different from what's being built, the appraisal comes back low, incomplete, or unsupported. That can stall the loan, or kill it outright, no matter how strong the veteran's credit or income looks.
What Ashley Did Differently, Once She Called
Once Ashley reached out, before she signed anything with the builder, I had a local agent run a comp search specific to her exact lot. We found three sales that qualified, close enough in distance and similar enough in characteristics to support the appraisal. That gave her the green light before she spent a dollar on architectural plans or put down a deposit with a builder.
The One Thing to Do Before You Spend on Plans
If you're a veteran planning to build on rural land or on a property that doesn't look like everything else nearby, do this before you sign anything: get a comp search run on your actual lot. Ask whether there are at least three home sales within the last twelve months, reasonably close by, that are similar enough to your planned home to hold up in an appraisal. If the answer is unclear, get help figuring it out before you commit money to plans, permits, or a builder contract.
I work with veterans across the Charleston area and the Lowcountry on exactly this kind of rural and unique VA build. If you're in the early stages of planning, call me before you sign anything. I'm Jason Sharon at Home Loans Inc, licensed mortgage broker, and I find the path. Call 843-569-7283, or reach out through homeloansinc.com.
Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448.