VA Eliminates Builder ID Number Requirement for Certain Guaranteed Loans and Modifies Builder Complaint Process

In a recent circular, the VA eliminated the procedure for requesting a builder identification number for processing guaranteed loans on new and proposed construction properties, and announced that it is modifying the process by which a veteran can submit a complaint about a builder.

Previously, the Lenders Handbook had required a builder to obtain a VA-issued identification number for each state in which it constructs homes for veterans who obtain a guaranteed loan.  The circular removes that requirement, but makes clear that there is no change for VA-issued builder identification numbers used in processing a Specially Adapted Housing grant or a Native American Direct Loan.  And a builder must still comply with any state or local licensing requirement.

Additionally, the circular explains that the VA will no longer be directly involved in the builder complaint process.  Instead, the agency will provide a veteran who submits a builder complaint with resources to resolve the complaint, such as information about local building codes or legal aid organizations.  The VA stopped performing compliance inspections for new and proposed construction properties in February of 2006.  Still, the agency never updated the process for submitting a complaint concerning construction.  Specifically, the agency indicated that many veterans incorrectly believed that it had the authority to compel builders to correct construction defects.