VA loans

VA Appraisals: A Reader Question

August 14, 2014

VA Appraisals: A Reader Question

055-logoA reader asks, “Can you clarify this for me? ‘reasonable value of the property established by the Department of Veterans Affairs’. Is “reasonable value” the appraisal they preformed or can the VA set a value different than what the appraisal was?”

This reader question refers to what happens when the borrower commits to the purchase of a property using his or her VA loan benefit and the property gets appraised by a VA assigned fee appraiser. When the appraisal is finished, there is a fair market value established by the appraiser. This value takes into account the housing market, comparable properties in that market, the age and condition of the home, and other factors.

The appraised value of the home is, in the eyes of the VA, the “reasonable value” of the property.

The VA relies on the expertise of the appraiser to set that value and the Department of Veterans Affairs has no cause to alter that value unless there is a written request for a re-evaluation of the appraisal or an appeal of the original appraisal. This is not done lightly, and it’s not permitted simply because one party to the sale of the home disagrees with the results of the appraisal.

For all intents and purposes, unless errors have been made in the appraisal or there’s a question of the appraiser’s competency or accuracy in a given case, the appraised value of the home will stand. This reader’s question is one likely on the mind of more than one person buying a home with VA loan benefits, but all borrowers should know that the appraisal essentially establishes the reasonable value of the property.

You can learn more about VA loan appraisal rules by reading Chapter 12 of the VA Lender’s Handbook.

Do you have questions about VA home loans? Ask us in the comments section.

  1. Elaine

    I am trying to sell my manufactured home in Kingman Az. Vet buyer was pre approved for loan. My realtor called me the monday before scheduled closing and said "due to lender property qualifications this property is not loanable" NO reason given . I have called numerous times to realtor and broker and still don't know why it is not loanable. Shouldn't I be given a specific reason? Is there someone or place I can go to get the answer? My husband was in the navy... he died about two years ago and I would like to down size. Thank you. Elaine Seggerson August 28 2014

    • Joe Wallace

      You would have to discuss this situation with the financial institution that denied the loan application or the realtor.

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