The VA Appraisal Got Easier in 2026. Terrell Hills Homes Didn't Notice.

Every real estate agent in San Antonio has heard some version of the same line this year: VA loans got easier. Sellers who spent the last few years avoiding VA-financed offers because of appraisal headaches are hearing that the government loosened the rules, and some are relaxing their guard as a result. In most of San Antonio, that's a fair read. In Terrell Hills, it's only half true, and the half that isn't true happens to be the half that decides whether your listing sails through or stalls.

Here's the mechanism. On May 1, 2026, the Department of Veterans Affairs rolled out a set of updates to how VA appraisers evaluate a home's Minimum Property Requirements, the baseline safety and habitability checks that ride alongside every VA purchase appraisal. The changes were real and reported directly by the VA. But one of the biggest relief items, the relaxed standard on peeling exterior paint, only applies to homes built after 1978. Terrell Hills has a median construction year of 1957. That's not a rounding error. It means the reform that's making headlines this year was written for a different housing stock than the one sitting on Terrell Hills' own streets.

What Actually Changed on May 1, 2026

The VA didn't touch its core three pillars for MPRs: a home still has to be safe, structurally sound, and sanitary. What shifted were several of the smaller items that historically generated repair conditions without reflecting real risk.

Four of those five rows are genuine wins for sellers. The fifth row is the one that matters most if you own a home in Terrell Hills, because it's the one row where the calendar year the house was built decides everything, and Terrell Hills was mostly built well before that cutoff.

The Cutoff Nobody Put in a Headline

The VA's own reasoning for the pre-1978 carveout is straightforward: homes built before 1978 are the ones federal law presumes may contain lead-based paint, so the appraiser still has to flag peeling or chipping exterior paint as a condition that must be corrected before the loan can close. That means scraping, priming, and repainting affected surfaces, verified by re-inspection, before the file gets a clear to close.

This isn't a new rule. It's the rule that already existed, left standing while everything around it got lighter. The people who read "VA appraisals got easier this year" and stopped there are the ones most likely to be surprised when their 1950s Terrell Hills home gets a paint condition on the Notice of Value.

According to demographic data on Terrell Hills housing stock, about 12.3 percent of homes were built before the 1940s, with another 10.1 percent built by 1949. Combine those figures with a median construction year of 1957 and the math is simple: at least half of the roughly 1,846 occupied housing units in Terrell Hills were built in 1957 or earlier, which puts them comfortably on the wrong side of the 1978 line by two decades or more. Only a small share of the city's housing, around 11 percent combined, was built in the 2000s or later.

Why This Lands Harder in Terrell Hills Than Most San Antonio Neighborhoods

Plenty of San Antonio neighborhoods have older housing. What makes this specific to Terrell Hills is who's likely to be on the other side of the contract. The city sits about five miles northeast of downtown San Antonio, and its history includes a long run as a preferred address for military officers stationed nearby. Homes here also carry real architectural pedigree, from a 1939 Atlee B. Ayres-designed Spanish Revival estate to a small O'Neil Ford-designed condominium community, alongside the Tudor, Spanish Revival, Mediterranean, and midcentury modern homes that make up the bulk of the city's roughly 1.61 square miles.

That combination, an affluent enclave close to a major military installation with a housing stock that skews pre-1978, means VA-financed buyers are a real and recurring part of the offer pool here, not a hypothetical. A seller who assumes VA activity is something that happens in other ZIP codes, and treats this year's reform as blanket good news, is the seller most likely to get an unwelcome surprise three weeks into a contract.

What a Pre-Listing Scope Should Catch Before the Appraiser Does

None of this means a Terrell Hills listing can't close cleanly with a VA buyer. It means the preparation has to be specific to what still gets flagged, not what got relaxed. Before you list, it's worth walking the exterior with the pre-1978 standard in mind:

• Scrape, prime, and repaint any peeling or chipping exterior paint, even small areas, since the lead-hazard flag applies regardless of square footage affected
• Confirm the roof has enough remaining useful life, generally accepted at two years or more, since roof condition remains one of the most common friction points industry-wide
• Check stair handrails and any exposed wiring, both of which remain automatic flags under the unchanged safety pillar
• Line up a wood-destroying insect inspection ahead of time. Texas requires an NPMA-33 report from a licensed pest control operator on every VA purchase, statewide, regardless of what county the home sits in
• Keep a comparable sales file ready in case the appraisal trends low. VA's Tidewater process gives the lender only two business days after a Notice of Value to submit additional comps, so a file assembled in advance is worth more than one built under deadline pressure

A private inspection before the VA appraiser ever sets foot on the property is the cheapest insurance in this list. It lets you negotiate repairs on your own terms, before a flagged condition becomes a closing-week scramble.

The Negotiating Leverage Sellers Often Overlook

VA financing allows sellers to contribute up to 4 percent of the purchase price toward a buyer's closing costs, a point above the 3 percent cap that applies to conventional buyers putting down less than 10 percent. For a seller weighing a VA offer against a conventional one on price alone, that extra concession room is often what makes the VA number pencil out competitively, provided the paint and roof items are handled before they become a mid-contract fire drill.

A Few Questions Worth Settling Before You List

Does a recent renovation change the pre-1978 paint standard? No. The rule is tied to the year the structure was originally built, not to whether it's been updated since. A beautifully renovated 1948 home in Terrell Hills is still a pre-1978 home under this standard.

Am I required to accept a VA offer? No. Sellers can decline any offer for legitimate business reasons. The point of preparing for the pre-1978 paint standard isn't obligation, it's removing a source of leverage that otherwise favors a buyer mid-negotiation.

Is a private inspection required before listing? It isn't required, but given how specific the exterior paint condition is to Terrell Hills' housing age, it's the single highest-value step on this list.

If you're weighing how a Terrell Hills listing will read to today's buyer pool, or want a pre-listing walk-through with this exact standard in mind, Leslie Reyes Idais works this market daily and can help you get ahead of it before it becomes a contract-week problem. Let's Connect.