VA Extends Appraisal Requirement Rule
The Department of Veterans Affairs issued a brief VA Loan Circular to announce the extension of a VA appraisal rule issued in 2009.
According to the original 2009 guidance, VA Circular 26-09-3, VA appraisal rules were amended to include a requirement that, “a copy of the agreement of sale or sales contract be provided to the fee appraiser by the requester of the VA appraisal immediately upon assignment.” This rule was created in order to insure the most accurate appraisal possible.
“When the value opinion to be developed is market value, Uniform Standards of Professional Appraisal Practice requires an appraiser to analyze all agreements of sale, options, or listings of the subject property, current as of the effective date of the appraisal, if such information is available to the appraiser in the normal course of business” the original VA circular says. It also adds;
“VA believes that the fee appraiser must have access to such information to ensure that the estimate of value represents a proper value, which includes consideration of financing data, sales concessions, or property conditions typically contained in the agreement of sale. Furthermore, for VA loan origination purposes, VA expects that the agreement of sale is available, or would be available, to the requester of a VA appraisal.”
Therefore, the 2009 VA loan rule, which was originally set to be rescinded in 2012, required the person requesting the VA appraisal to “provide a copy of the agreement of sale and all addenda to the appraiser immediately upon assignment, but not later than 1 business day after the date of assignment. If the agreement of sale is amended during the process, the requester must provide the updated contract to the appraiser.”
The assigned VA appraiser will analyze the agreement of sale and consider that analysis in establishing the fair market value of the property and any affect on VA minimum property requirement repairs. Should the requester fail to provide the agreement of sale to the appraiser, the appraiser will, upon notice to the requester, hold the assignment and notify VA of the delay.”
On February 25, 2013, the VA issued an announcement stating the rule would continue past the previous expiration date; it is now in effect at least until January 1, 2014, the date VA has given as the “rescission date” of the circular. This rule was extended once before when they original rescission date listed on the circular (in 2012) approached. The requirement stands until the VA makes it permanent or extends the rescission date once more.
Do you have questions about VA home loans or refinance loans? Ask us in the comments section.
About Bruce Reichstein
Bruce Reichstein is an Expert on (VA) Military/Veteran Home Loan Guidelines for over 26 years — www.VALoans.com. He is an experienced VA Loan Mortgage Banker who is passionate about assisting US Military Veterans utilize their Veteran Eligibility to purchase a home.