VA Loan Reader Questions: VA Appraisal Requirements
A reader asks, “I am purchasing a home and had a VA appraisal one week ago. He sent a message that as part of the Tidewater Initiative he is letting us know that the appraised value appears to likely to come in under the sales price and per the Tidewater Initiative he is not allowed to discuss value but this gives us the opportunity to provide market evidence for his consideration prior to establishing the final URAR value.
We believe the house is a fair value considering the condition and all the amenities included with the house. It seems to be in a far superior condition to all the other homes in the area. Also, the house is right on a school district boundary with most of the other homes in the area in the other school district.
My question is: What does the VA appraiser actually look at. Does he look at all the details of the home such as a lifetime aluminum roof compared to asphalt shingles, cedar siding as compared to aluminum or vinyl siding, lifetime replacement windows compared to original windows? There are actually no other houses in this neighborhood that compare.”
The basics for VA appraisal requirements can be found in Chapter 12 of VA Pamphlet 26-7, the VA Lender’s Handbook. While the information contained there is not the full or final word on the matter, it’s a good place to start when trying to get an idea about what the VA requires from properties to be purchased with a VA insured home loan.
For example, VA minimum property requirements include the following as found in Chapter 12:
“Each living unit must have the space necessary to assure suitable
- Cooking and dining accommodations, and sanitary facilities.”
Chapter 12 adds, “VA Minimum Property Requirements (MPRs) provide general acceptability criteria for properties which will become the security for VA-guaranteed loans. In proposed or under construction cases, the MPRs help ensure that the property is constructed according to the applicable
- Building code
- Federal regulations, and
- HUD requirements.
In existing and new construction cases, the MPRs provide a basis for determining that the property is
- Safe, structurally sound and sanitary, and
- Meets the standards considered acceptable in a permanent home in its locality.”
Additionally, the VA official site says the following about VA appraisals:
“An appraisal is how the value of a property is determined. The appraisal is used to determine the maximum loan amount of the guaranteed mortgage. As part of the appraisal process, the appraiser looks for conditions that can affect the habitability and value of the property.”
That may include comparing the property to others similar to it in the same housing market. The neighborhood the property is in may not have comparable properties, but the housing market beyond that immediate area may. The appraiser may or may not be able to take such factors into account when determining the fair market value of the property.
The best advice to the reader in this particular case? Contact the VA Regional Loan Center with jurisdiction over that particular area to get a better idea of what may affect the appraisal locally. You can find your VA Regional Loan Center here.
Do you have questions about VA home loans? Ask us in the comments section.