People like to support well-deserving veterans. And most builders and sellers would gladly sell a home to a veteran. However, a recent article in National Mortgage News – Origination News highlights a problem with home appraisals completed by the Veterans Administration (VA) that is keeping veterans from purchasing homes.

The VA offers a loan program that is meant to make it easier for veterans to purchase a home. The program features no down payment and 100% seller-paid closing costs. Basically, this enables a veteran to move into a home without paying anything.

According to Jody Kahn, a vice president with John Burns Real Estate Consulting, the conservative VA home appraisals, that are intended to protect veterans from overpaying, are keeping the loans from closing.

Often VA appraisals are lower than the home’s sales price. Not only does this impact the potential sale of the home, it also impacts the value of other homes for sale in the particular community – costing builders and home sellers money.

Part of the reason low-ball appraisals are being made is that the VA-assigned appraisers don’t know the local market. They look at the lowest comparables instead of the most relevant. Plus, they don’t consider the value of the options and upgrades in new homes chosen by the veteran buyers.

Additionally, the appeal process to get the appraisal changed is burdensome and almost always ineffective.

The whole process is so frustrating to builders “that it is becoming financially questionable to continue [selling homes to vets], says Kahn.

And for most sellers, they just opt to let the escrow fall out, which keeps the vet from getting the home.

Also, once a VA appraisal is made, it stays with the home for six months. Therefore, the seller can’t get a new appraisal done if another vet is interested in buying the home and wants to pay a higher price.

Another issue with VA appraisals is that the appraiser will often note so many items that require fixing or checking by the seller that the seller gets frustrated and walks away.

Unfortunately, the VA appraisal process is broken, according to U.S. home builders. And it has become so frustrating to builders and sellers that it’s keeping veterans from getting the homes they want because they’re using VA financing.

Whether you’re looking to buy a home with a VA, FHA or another financing option, you should talk to a reputable lender, who will work with you to help you find the right solution for your needs.