Every once in a while, a loan comes along that is an extreme challenge. Sometimes there are issues documenting income, employment history, and/or credit that often occur in the beginning stages during loan pre-qualification. However, during the loan process, there are cases when unpredictable property related challenges arise.

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We recently dealt with a loan that had a multitude of issues surrounding it, yet we were able to successfully close. It took a team of individuals to make the outcome a winning one: that team included our Hawaii VA Loans Specialist, Dane Costa, who exhibited exceptional perseverance, our local VA office, the sellers, the unwavering VA buyers, and the cooperative agents involved.

Here’s a summary of the specific challenges the loan presented and how each one was resolved:

Low Appraised Value

  • After the appraised value came in below the purchase price, the buyer and seller decided to split the difference and settle on a new purchase price in between the appraised value and the original price.


  • The VA requires that homes are connected to public plumbing lines whenever possible. In this case, the home was not. We needed to prove that the waste disposal was safe and legal. VA Loan Specialist, Dane Costa, contacted the Department of Health (DOH) and helped coordinate an engineer to come out and inspect the cesspool. As a result of the inspection, the cesspool was approved by the DOH.

Legal Non-Conforming

  • If the appraisal indicates that a home is considered “legal non-conforming,” it means that the home was legal when originally built, but does not conform to current zoning laws. The lender and the VA want to make sure that the home can be rebuilt in approximately the same manner if it happens to be destroyed. Dane contacted Roxanne from the Honolulu VA Regional Loan Center who provided documentation from Land Ordinance Codes that were acceptable with no further documentation required. Mahalo, Roxanne!

Non-Permitted Additions

  • The VA requires that all “non-permitted” additions are addressed either by obtaining a permit exception or by obtaining a permit. The home had two areas that had been modified without a permit:
  1. An extension of the roof line creating a covered area was removed because it violated current zoning restrictions. The covered area teardown needed pictures and an invoice for work done from a licensed contractor.
  2. A deck was retroactively permitted.

Check out our post on overcoming non-permitted additions for further explanations of solutions.

Non-Permitted Electrical & Plumbing Work

  • Recent work to the electrical and plumbing systems were completed with an unlicensed contractor. Dane found a licensed plumber and a licensed electrician to inspect the work and issue statements that the work was completed in accordance with current building codes.

Private Road Maintenance Agreement

  • Whenever a property relies upon a private road for access, the VA (and every other lending entity) requires evidence that the road will be maintained in the coming years. There was no recorded document for this property and no agreement among the homeowners that use the road. Dane and the agents were able to track down a letter from the City and County stating that they will maintain the road.

There are many moving parts to coordinate and document in order to close a loan, so even having one of these issues can be a challenge in and of itself. In my 17 years in Hawaii’s mortgage industry, I don’t believe I’ve seen another loan with so many issues to tackle, and hopefully, you won’t either. However, if you do, be confident that the Hawaii VA Loans team is ready to handle them.

The first step in buying a home with no down payment is to get pre-qualified. It’s quick and easy. Fill out this online application or contact us with any questions you may have about using your VA home loan benefits.