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/.


Recently, the VA issued an announcement clarifying their rules and expectations for loans on properties with “non-permitted” additions or improvements. At Hawaii VA Loans, we believe in bringing you breaking news and current headlines about the VA home loan process. This includes delivering information on certain hurdles we may need to jump over together in order to close your loan and get you moved into your new Hawaii home! So let’s take a look at what the VA has to say about all things non-permitted.


What are “non-permitted improvements”?

In short, any construction, demolition or alteration of a structure, building or fence requires a permit. Painting cabinets, flooring, repairs valued at less than $1,000, and fences under 30 inches in height do not need a permit. Everything else requires a permit. If a permit is not obtained, the work is considered a “non-permitted improvement”.

  • For more information about when a permit is required, the Honolulu Department of Planning and Permitting (DPP) has created a handy handout: click here.
  • Honolulu’s DPP also offers a nifty online tool called “Permit Pal” to help you determine if a permit is required: click here.

What was included in the VA’s recent announcement?

Essentially, the announcement was a reiteration of previously published rules regarding exceptions to the permitting requirements. However, it did reinforce the local VA office’s commitment to flexibility:

  • The VA will grant exceptions to permitting guidelines and issue a guarantee for loans on properties with certain types of non-permitted improvements. The VA buyer and lender must indicate that they have knowledge of the situation and hold the VA harmless for any effects of the “non-permitting.”
  • The VA will not issue guarantees for loans where the non-permitted improvements create a possible health, safety or soundness hazard unless proof is submitted to the VA for a determination that they do not present a health, safety or soundness issue. Specifically, in order to get exceptions from the VA for electric or plumbing work that was non-permitted, a licensed plumber/electrician will need to certify that the work was done to code.
  • Click here to read the VA’s official announcement release.

What are the steps to the exception process?

  • Identify the non-permitted improvements.
  • Determine if, in fact, a permit is required or an exception is allowed.
    • If a permit is required, the lender will work with the parties involved to determine if an exception can be obtained. This may involve pictures of the improvement(s) and the surrounding area.
    • The lender may make the determination or they may consult the VA to see if an exception can be issued.
    • If an exception is allowed, the lender will help prepare the “hold harmless” letter to be signed by the borrower.
    • If the exception is not allowed, there are two options:
      1. Obtain “retroactive” permits (permits obtained after the construction is complete).
      2. Remove the non-permitted structure in question.

Stay positive if you’re looking at home with a non-permitted improvement. Our knowledge and experience with these types of issues is extensive, and we can help you find the right solution to pursue.

The first step in buying a home with no down payment is to get prequalified. It’s quick and easy. To get prequalified for a VA home loan, fill out this online application or contact us with any questions you may have.