#### Chapter 4

#### Construction Inspections

#### Overview

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| ##### In   | > This chapter provides administrative details to       |
| troduction | > supplement the policies and procedures in Chapter 14  |
|            | > of the Lender\'s Handbook.                            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | > This chapter contains the following topics.           |
| #### In th |                                                         |
| is Chapter |                                                         |
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+-------------------------------------------------------+--------------+
| ## Topic                                              | ##           |
|                                                       | ### See Page |
+-------------------------------------------------------+--------------+
| 1.  Submission of Inspection Reports                  | 4-2          |
+-------------------------------------------------------+--------------+
| 2.  Review of Inspection Reports                      | 4-4          |
+-------------------------------------------------------+--------------+
| 4.03 New Construction Materials and Methods           | 4-4          |
+-------------------------------------------------------+--------------+

####  {#section .unnumbered}

#### 4.01 Submission of Inspection Reports

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| ###        | If construction is acceptable and there are no          |
| ## By Fee  | deviations or substitutions, the compliance inspector   |
| Compliance | will submit the Department of Veterans Information (VA) |
|  Inspector | inspection report (Form 26-1839) in the following       |
|            | manner:                                                 |
|            |                                                         |
|            | If the lender is known:                                 |
|            |                                                         |
|            | -   Provide the lender with a copy,                     |
|            |                                                         |
|            | -   Provide the builder with a copy, and                |
|            |                                                         |
|            | -   Keep a copy for his/her file.                       |
|            |                                                         |
|            | If the lender is not known:                             |
|            |                                                         |
|            | -   Provide the builder with 2 copies, one of which the |
|            |     builder will forward to the lender when known, and  |
|            |                                                         |
|            | -   Keep a copy for his/her file.                       |
|            |                                                         |
|            | ***Not*e**: Regional Loan Centers (RLCs) have the       |
|            | authority to require a copy of each inspection report   |
|            | not requiring VA prior approval be forwarded to their   |
|            | office for field review purposes (See Section 6.06).    |
|            |                                                         |
|            | Stations should direct compliance inspectors to provide |
|            | a monthly report outlining the prior months inspection  |
|            | activity, including case numbers and stage of           |
|            | inspections performed. Stations will use this report to |
|            | determine those cases for full submission to the RLC    |
|            | for field review (10%) purposes.                        |
|            |                                                         |
|            | Continued on next page                                  |
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4.01 Submission of Inspection Reports, Continued

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| #          | Any inspection report (VA Form 26-1839) showing         |
| #### Subst | "substitutions or deviations" from the construction     |
| itutions,  | exhibits or unacceptable construction will be forwarded |
| Deviations | by the compliance inspector to VA, along with a         |
| , or Unacc | statement showing any dollar difference in construction |
| eptable Co | cost resulting from the change(s).                      |
| nstruction |                                                         |
|            | VA will:                                                |
|            |                                                         |
|            | -   Determine whether or not it will be necessary to    |
|            |     alter the reasonable value, and in what amount.     |
|            |                                                         |
|            | -   Check the appropriate box and issue a revised       |
|            |     Notice of Value (NOV) if the reasonable value is to |
|            |     be adjusted, and                                    |
|            |                                                         |
|            | -   Send a copy of the inspection report and the        |
|            |     revised NOV to the lender and to the veteran if one |
|            |     is under contract.                                  |
|            |                                                         |
|            | > ***Reference:*** See section 14.07 of the Lender's    |
|            | > Handbook for procedures concerning changes to         |
|            | > construction exhibits.                                |
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#### 

#### 4.02 Review of Inspection Reports

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| **VA       | If VA revises any inspection report, for any reason, a  |
| R          | copy of the revised report (along with a copy of the    |
| evisions** | original report marked "Superceded") will be sent to    |
|            | the:                                                    |
|            |                                                         |
|            | -   Lender,                                             |
|            |                                                         |
|            | -   Builder, and                                        |
|            |                                                         |
|            | -   Fee Compliance Inspector                            |
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#### 4.03 New Construction Materials and Methods

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| ##### Acc  | VA encourages special methods of construction and new   |
| eptability | materials that are developed to meet market conditions  |
|            | without sacrificing structural soundness.               |
|            |                                                         |
|            | New and unconventional methods and materials approved   |
|            | by the Department of Housing & Urban                    |
|            | Development/Federal Housing Administration (HUD/FHA),   |
|            | e.g., in engineering bulletins or material releases,    |
|            | are acceptable to VA.                                   |
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