EDUCATION
What You Need to Know About Your VA Home Loan Appraisal
July 13, 2021 – NewDay USA
EDUCATION
What You Need to Know About Your VA Home Loan Appraisal
July 13, 2021 – NewDay USA

You found the perfect home. It’s on the list of properties you can purchase with your VA Loan so you made an offer—and it’s been accepted. Congratulations! Because you’re using your Veterans Affairs (VA) home loan benefits, the next step in the process is to have the required VA home loan appraisal. The VA wants to make sure you don’t overpay for the home and that it meets the VA’s minimum property requirements (MPRs) to ensure the home is safe and has no major defects.

Determining the Fair Market Value through Appraisal

Your lender will help you connect to a VA-certified appraiser and you can set up a date and time for the appraisal. You do not need to be present. Your lender will let you know the results. The appraiser will look at both the inside and outside of the home and then compare it to current real estate market data and what similar properties in the area recently sold for. They will then establish the Notice of Value (NOV), which states the value of the property and specifies any property conditions that may need to be met. 

The sale price of the home you wish to purchase should not be higher than the appraised value. If the home does not appraise at or above the purchase price, you can ask your realtor to provide sales data on similar homes to show that your home might have been inaccurately appraised. If there is information that was not considered that could affect the value, or if the appraisal was not done according to VA standards, you might be able to justify asking for a corrected NOV. According to the VA, “The value may be changed where the change is clearly warranted and fully supported by real estate market or other valid information which would be considered adequate and reasonable by professional appraisal standards.”1

If the appraisal value is lower than your accepted offer, you may also be able to renegotiate the sale price with the seller or pay the difference at closing. If you are willing to pay the difference, it must be paid upfront at closing and not financed as part of the loan. However, if the amount is significant, it could negatively affect the terms of your mortgage agreement.

Meeting the Minimum Property Requirements for VA Home Loan Appraisal

The other task of a VA appraiser is to ensure the property meets three basic requirements. The home must be:

  • Safe
  • Structurally sound
  • Sanitary

Here are some of the minimum property requirements that the VA appraiser will be looking at:

  • Working electric, heating, and cooling systems
  • Adequate roofing that will last the foreseeable future
  • Sufficient size for basic living necessities
  • Clean, continuous water supply with sanitary facilities
  • Free of lead paint
  • Free of wood destroying insects, fungus, and dry rot
  • Safe and sanitary sewage disposal
  • Accessible from an all-weather public or private street
  • Accessible and properly vented attics and crawl spaces

If the home does not meet all of the MPRs, you can ask the seller to pay for the necessary repairs or pay for the repairs yourself. You can request an exemption for some MPRs, but these are only granted on a case-by-case basis.  Be sure to ask your lender if they will cover the cost of the appraisal fee. Some lenders do as a service to Veterans, and that will save you some money.

In addition to the VA appraisal, you may want to have your own home inspection. This will be more expansive in scope and should cover minor and major defects. An inspection can be a good price negotiation tool and will provide you with a list of what needs to be repaired either before or after the closing.

Would you like to learn more about the VA home loan appraisal process? Turn to the expert loan team at NewDay USA. We are a nationwide VA mortgage lender focused on helping active military personnel, Veterans, and their families achieve their financial and housing goals. Call us today at  to learn more about any of our VA home loan products.

https://benefits.va.gov/RODENVER/docs/ReconsiderationofValueRequestSOP.pdf

You found the perfect home. It’s on the list of properties you can purchase with your VA Loan so you made an offer—and it’s been accepted. Congratulations! Because you’re using your Veterans Affairs (VA) home loan benefits, the next step in the process is to have the required VA home loan appraisal. The VA wants to make sure you don’t overpay for the home and that it meets the VA’s minimum property requirements (MPRs) to ensure the home is safe and has no major defects.

Determining the Fair Market Value through Appraisal

Your lender will help you connect to a VA-certified appraiser and you can set up a date and time for the appraisal. You do not need to be present. Your lender will let you know the results. The appraiser will look at both the inside and outside of the home and then compare it to current real estate market data and what similar properties in the area recently sold for. They will then establish the Notice of Value (NOV), which states the value of the property and specifies any property conditions that may need to be met. 

The sale price of the home you wish to purchase should not be higher than the appraised value. If the home does not appraise at or above the purchase price, you can ask your realtor to provide sales data on similar homes to show that your home might have been inaccurately appraised. If there is information that was not considered that could affect the value, or if the appraisal was not done according to VA standards, you might be able to justify asking for a corrected NOV. According to the VA, “The value may be changed where the change is clearly warranted and fully supported by real estate market or other valid information which would be considered adequate and reasonable by professional appraisal standards.”1

If the appraisal value is lower than your accepted offer, you may also be able to renegotiate the sale price with the seller or pay the difference at closing. If you are willing to pay the difference, it must be paid upfront at closing and not financed as part of the loan. However, if the amount is significant, it could negatively affect the terms of your mortgage agreement.

Meeting the Minimum Property Requirements for VA Home Loan Appraisal

The other task of a VA appraiser is to ensure the property meets three basic requirements. The home must be:

  • Safe
  • Structurally sound
  • Sanitary

Here are some of the minimum property requirements that the VA appraiser will be looking at:

  • Working electric, heating, and cooling systems
  • Adequate roofing that will last the foreseeable future
  • Sufficient size for basic living necessities
  • Clean, continuous water supply with sanitary facilities
  • Free of lead paint
  • Free of wood destroying insects, fungus, and dry rot
  • Safe and sanitary sewage disposal
  • Accessible from an all-weather public or private street
  • Accessible and properly vented attics and crawl spaces

If the home does not meet all of the MPRs, you can ask the seller to pay for the necessary repairs or pay for the repairs yourself. You can request an exemption for some MPRs, but these are only granted on a case-by-case basis.  Be sure to ask your lender if they will cover the cost of the appraisal fee. Some lenders do as a service to Veterans, and that will save you some money.

In addition to the VA appraisal, you may want to have your own home inspection. This will be more expansive in scope and should cover minor and major defects. An inspection can be a good price negotiation tool and will provide you with a list of what needs to be repaired either before or after the closing.

Would you like to learn more about the VA home loan appraisal process? Turn to the expert loan team at NewDay USA. We are a nationwide VA mortgage lender focused on helping active military personnel, Veterans, and their families achieve their financial and housing goals. Call us today at  to learn more about any of our VA home loan products.

https://benefits.va.gov/RODENVER/docs/ReconsiderationofValueRequestSOP.pdf

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