VA Appraisal: Requirements, Fees and Timeline
If you’re applying for a VA loan, you’ll need to get a VA appraisal. This procedure ensures the home is a worthy investment and is safe to occupy. Learn more about the appraisal process, including VA appraisal requirements, timelines and VA appraisal fees.
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What is a VA loan appraisal?
A VA loan appraisal is a professional estimate of a home’s value. The U.S. Department of Veterans Affairs (VA) requires a VA appraisal for all VA purchase loans and VA cash-out refinances. During the process, a VA-approved appraiser estimates the home’s market value and assesses whether the property qualifies for financing.
After the appraisal, the appraiser submits a notice of value (NOV), a report that provides the estimated property value and additional information about the home.
VA loan appraisal vs. conventional appraisal
A VA appraisal is similar to an appraisal for a conventional (nongovernment) loan. The main objective is to assess the home’s market value and determine if it aligns with the loan amount.
However, VA loan appraisals differ from conventional loan appraisals because they follow different standards and procedures. Loan appraisers use VA guidelines to determine the home’s value and if the property meets the VA’s basic property standards, called minimum property requirements (MPRs). As a result, VA loan appraisal requirements are often considered stricter than requirements for non-VA loans.
|VA appraisal||Conventional appraisal|
|Purpose||To establish fair market value and if the property meets the VA’s minimum property requirements.||To establish fair market value.|
|Comps||Compares the home to similar properties in the area.||Compares the home to similar properties in the area.|
|Cost||Varies by property type and location. Fees are established by the VA.||Varies by property size and location. Fees are established by the appraisal company.|
|Timeline||Varies by location — typically between one and three weeks. Timelines are set by the VA.||No set timeline but typically takes one to two weeks.|
|Minimum property requirements (MPRs)||The VA’s MPRs.||Basic condition requirements.|
THINGS YOU SHOULD KNOW
A VA appraisal assesses a property’s condition to determine its market value and whether the home meets the VA’s minimum property requirements. But an appraisal is not the same as an inspection. During a home inspection, a professional thoroughly checks a home’s inner workings and physical structure. The VA requires appraisals for VA home loans, but it does not require inspections. However, the VA recommends that buyers get a separate inspection in addition to the VA appraisal.
VA appraisal requirements
The VA appraisal process estimates the market value of a home to ensure it is worth the proposed loan amount. Additionally, the appraisal determines whether the property meets the VA’s minimum property requirements.
VA minimum property requirements
The VA’s minimum property requirements are a set of basic standards that ensure a home is safe, sanitary and structurally sound. All homes backed by VA loans must meet the VA’s minimum property requirements. If the appraiser identifies conditions that don’t meet the standards during the appraisal, they will outline the repairs necessary for the property to meet the requirements.
Some of the VA’s minimum property requirements include the following:
- Space requirements: The property must have adequate and functional space for day-to-day living. This includes enough room for sleeping, cooking and dining. The home must also have enough working bathrooms.
- Access: The property must have safe access via walkways, roads and the backyard (if applicable) without passing through other properties.
- Drainage: The ground around the home must provide proper drainage away from the foundation and not retain water.
- Electricity: The home must have sufficient electricity for lighting and electrical equipment. The property must not have any visibly damaged or exposed electrical wiring.
- Water supply: The home must have an adequate and healthy water supply for drinking, bathing and other essential uses. The property must have hot water and safe sewage disposal.
- Mechanical systems: All mechanical systems in the home must be in safe working condition and protected from damaging elements.
- Heating and cooling: In climates where heat is required, heating must be permanently installed and maintain a temperature of at least 50 degrees Fahrenheit in areas of the home with plumbing. If a nonvented fireplace or heating source is present, the buyer must meet documentation requirements and must sign a written statement confirming the VA did not inspect the heating unit. If an air conditioner is installed, it must be functional.
- Health and safety hazards: The home must not have any conditions that adversely affect the safety or health of the occupants.
- Roof: The roof must prevent leaks and be in reasonable condition.
- Attic: The attic must have proper ventilation and no sign of water damage.
- Basement: The basement must not have signs of moisture or structural problems.
- Termites, dry rot and fungus: If evidence of a termite infestation, fungus growth or dry rot is present, the home may be subject to a termite inspection, and any damage must be repaired. The VA may require a termite inspection in some areas of the country.
- Local requirements: Properties may have to meet additional requirements based on location.
VA appraisal fees
As with most loan appraisals, the buyer is responsible for paying the VA appraisal fee. However, a seller may agree to take on the appraisal fee and other closing costs during negotiations. Additionally, some lenders offer no-closing-cost loans, in which they cover the appraisal fee and other expenses in exchange for a higher mortgage rate.
VA appraisal fees tend to be higher than the fees for other loan types because VA-approved appraisers must meet specific criteria and be familiar with the VA’s thorough appraisal process. For comparison, home appraisals generally range from $300 to $500; however, VA appraisals can be as high as $1,000 or more, depending on the property and location.
Below is an example showing the VA appraisal fees for the Roanoke region. You can look up the VA appraisal fees for your location using the VA’s appraisal fee schedule.
VA appraisal fees for the Roanoke region
|State||Single-family home||Condominium||Manufactured home||Multifamily home|
|District of Columbia||$625||$625||$700||$900|
For example only. Fees vary by region.
VA appraisal process and timelines
In addition to setting appraisal fees, the U.S. Department of Veterans Affairs establishes timelines and guidelines that lenders and appraisers must follow.
Order an appraisal
After a seller accepts your offer and you both sign the purchase agreement, your lender will request an appraisal from a VA-approved appraiser. You’ll pay the appraisal fee up front when your lender orders the appraisal.
The VA establishes the turnaround time for VA appraisals, which could be anywhere from seven to 21 business days, depending on your location. Keep in mind the timeline begins the first business day after your lender assigns the appraisal to a VA-approved appraiser.
After the VA-approved appraiser completes the appraisal, they will summarize their findings in a notice of value (NOV). This report provides the estimated value of the home, information on comps in the area, photographs and a list of recommended repairs necessary to meet the VA’s minimum property requirements.
If a home doesn’t appraise high enough to qualify for the VA home loan, borrowers can challenge the appraisal by requesting a reconsideration of value (ROV). To request an ROV, you would work with your real estate agent to provide your lender with market data that shows the home is worth more than the appraised value. VA staff will then review the appraisal report and the additional data. If they determine the appraiser should have assigned a higher value, they will issue an amended NOV.
Frequently asked questions
An appraiser has two main objectives during a VA appraisal. They assess the home’s value to ensure it is in line with the proposed loan amount, and they see if the home meets the VA’s minimum property requirements. VA-approved appraisers follow VA guidelines to complete the appraisal.
VA appraisals may be more thorough than an appraisal for a conventional loan because, in addition to estimating the home’s market value, the appraiser checks if the home meets the VA’s minimum property requirements (MPRs). Whether a property appraises high enough and meets the MPRs depends on many factors, including the condition and location of the home and the property type.
If the VA appraisal reveals any conditions that the VA considers “defective” or hazardous to the occupants’ health and safety, the home will be subject to repairs before loan approval. These conditions include but are not limited to defective construction, poor workmanship, ongoing foundation settlement, excessive dampness, leakage, decay and termites.
VA borrowers have multiple options when a home appraises lower than the loan amount. If they believe the appraiser misestimated the home’s value, they can request a reconsideration of value (ROV). Other options include renegotiating the purchase price with the seller, paying the difference between the appraised value and the loan amount, and walking away from the sale.
The U.S. Department of Veterans Affairs requires a VA appraisal for all VA home loans and cash-out refinances. Borrowers doing a VA interest rate reduction refinance loan (IRRRL) do not have to get an appraisal.
Homebuyers must pay the VA appraisal fee up front when their lender requests the appraisal. The lender will typically order the appraisal shortly after you and your real estate agent submit a signed purchase agreement.