UPDATED 8.3.17: As of July 10, 2017, appraisals with permit issues (as long as they meet the VA’s Minimum Property Requirements) will be issued “As is.” This means that the lack of an existing permit for an addition or improvement will not prevent a home from obtaining VA financing, and it will no longer be necessary to obtain a VA waiver for homes that were not properly permitted. However, the appraiser will not give value to the non-permitted area. Read more HERE.

Therefore, the information in the post below does not reflect the new guidelines for non-permitted additions. Instead, go here: https://hawaiivaloans.com/new-non-permitted/.


Zoning rules and building laws can be pretty tricky. While most properties fall within legal bounds, there are a substantial number of properties that fall outside the bounds of the current restrictions.

Non-permitted Improvements

Non-permitted improvements refers to any construction done on the subject dwelling that requires a permit, but none was obtained. ?There are usually two types; interior changes that don?t affect the overall ?footprint? of the property, or additions that do.

  • FHA & Conventional (Conforming) Loan Programs

Allowed: if the improvements change the gross living area (GLA) then they can?t be valued. If the improvements are within the existing footprint & GLA they shouldn’t be noted on the appraisal and are therefore invisible.

  • VA Loan Program

Not Allowed: all improvements must be permitted.

Legal Non-Conforming

Some homes may have been built according to the building codes or zoning that existed at the time of construction, but no longer meet the current rules. ?They get grandfathered in and are legal, but not conforming to current regulations. ?This usually means that there will be some restriction in the event that the home needs to be rebuilt. ?Whether a bank will lend on the property depends upon the restrictions imposed.

  • Treatment by Loan Programs

FHA, VA and Conforming rules all allow for homes that fall into the ?legal non-conforming? category; however, the dwelling must be able to be rebuilt to the same specifications. ?If the rebuilt home must be different (i.e. – no ohana unit or reduced square footage), the disallowed structure or living area can?t be valued.