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

VA 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.