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VA Appraisals: How Long Until a Notice of Value Expires?

va loanVA rules state that any property to be purchased with a VA loan must have a notice of value assigned after being reviewed by a VA-assigned appraiser. The notice of value allows the VA to issue a VA loan amount for the purchase based on the fair market value of the property.

But once the property is appraised, how long does that notice of value remain in effect before a new one is required? If the borrower waits too long to decide on the loan, will he or she be required to pay for another appraisal in order to move the loan ahead? What about cases where a VA loan applicant decides not to purchase the home–does a new borrower have to pay for a second appraisal just as the first one does?

According to VA loan rules, the length of time a notice of value is valid depends on the type of property being appraised. For example, proposed or under construction properties have a 12-month period before the notice of value expires.

For other homes, the rules state: “A notice of value for property appraised as existing or new construction is valid for six months. Rapidly fluctuating real estate market conditions may temporarily dictate the use of a shorter validity period.” That last sentence is very important. The borrower may have plenty of time to decide in the short term about purchasing a home once the notice of value is issued, but waiting too long isn’t really an option even under the most forgiving circumstances.

A borrower is likely held to a specific amount of time to decide based on the contents of the written loan agreement, so the “six month window” wouldn’t apply in such instances.

If the borrower decides not to go through with the deal, the notice of value would be theoretically good for the full six months, unless market conditions dictate otherwise. That means a new VA borrower could possibly avoid having to pay an appraisal fee when trying to purchase a home where the notice of value is still valid.

The VA rules add some protection to the borrower who has agreed to purchase the property after the notice of value is issued. “If a veteran signs a purchase agreement during a notice of value’s validity period, that notice of value will remain valid until that transaction is either completed or terminated.”

This would protect the borrower from having to pay for another appraisal under the rules should closing the deal happen after the notice of value’s “on paper” expiration date. This would not necessarily save the borrower from having to pay for a second appraisal when it’s time to refinance the home with a VA loan, as the lender may require a new appraisal for some types of refinancing as a condition of the loan.

About Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association.

2 Responses to VA Appraisals: How Long Until a Notice of Value Expires?

  1. francis e croucher says:

    We are inquiring about the NOV of our appraisal for our home loan. It is taking longer to get it then we were told it would be. The lender said they would have it in the system usually about 3 days and it has been six. we are trying to close this month and just waiting on the NOV.

  2. Tammi Lutz says:

    Please be aware that as of January 1, 2012 the VA guidlines regarding the appraisal name transfers have changed. Prior to January if a VA appraisal had been done on a property, that appraisal stuck with the property for 6 months and could be used for another VA buyer if the first buyer backed out. My husband and I are in the process of purchasing a home going through a VA compromise sale and the lender had a VA appraisal done just 3 months ago. All parties were under the impression that we could use that appraisal. However, 2 weeks before closing we found out from the VA that because our names were not on the appraisal that we had to order a new appraisal. This has pushed our closing date way back, cost us an additional $470 and if the new appraisal comes in lower than the previous we will have to go back to negotiating the sale price with the lender. If someone had told us this in the beginning stages, we would have had it done and it could have saved us from major headache!

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