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One of the requirements for being approved for a VA loan is a property appraisal. If you don’t know what an appraisal is, how it works or what this process means for you, read on.

What Is A VA Loan Appraisal?

A VA appraisal is an appraisal performed by someone certified through the U.S. Department of Veterans Affairs (VA). It’s a valuation of how much the home you’re trying to buy or refinance is actually worth. This value is established by inspecting the house and comparing the asking price to recent sales prices for similar properties in the area.

The appraisal is important to your VA loan process for three main reasons:

  1. You want to make sure you’re not overpaying for a home.
  2. Your lender cannot loan more than the home is worth.
  3. The appraisal ensures that the home meets the VA’s minimum property requirements, which involves checking for basic safety and livability.

VA Appraisal Fees

It’s hard to say for sure how much an appraisal will cost, because that depends on where you live and the characteristics of the property. If the appraiser must travel further to get there or has to inspect multiple units, it could cost you more. You can pay for this or negotiate with the seller to pay as part of a package of seller concessions.

You can find maximum fees for your state and county on the VA website. As of April 1, 2019, maximum appraisal fees for single-family homes range from $425 to $1,000 across all 50 states.

VA Appraisal Checklist: Minimum Property Requirements

Just as the VA has certain requirements for loan eligibility, it also has VA-specific rules for its appraisers. Just as with traditional, non-VA appraisals, VA appraisers must inspect the property inside and out. They’re also required to select comparable homes, view the exterior of them and perform a comparative analysis. Typically, appraisers look for things like structural issues or any other problems that could impact a home purchase. The VA prefers that homes be move-in ready.

Each appraised home needs to meet a series of standards known as minimum property requirements (MPRs). You can view the full list online, but we’ve outlined the major requirements below.

Space Requirements

Your VA appraiser will check the property to ensure that there is sufficient space in your prospective home to perform normal day-to-day functions. Specifically, there should be safe and adequate room for food preparation, bathrooms and sleeping quarters.

Access And Encroachments

The property needs to have a safe means of access to the backyard and from the street. Private streets should be maintained in accordance with some form of homeowners agreement that will not place an undue burden for maintaining the road on you. The appraiser will note any encroachments of your property onto a neighbor’s and vice versa.

Hazards

Your appraiser will inspect the property to ensure there is no existing damage due to or imminent danger from natural hazards like flooding, mudslides, avalanches and sinkholes. They’ll also check for other hazards like lead-based paint, radon gas and environmental contamination.

Utilities

Typical issues that appraisers report include homes without an efficient and acceptable heat source. A heating system must maintain a minimum temperature of 50 degrees in the plumbing areas of the home. There must be adequate and code-approved electrical systems with all the proper fixtures. A leaky roof – or a roof that has problems – and windows that have broken or damaged frames and seals can be huge issues on an appraisal report.

House Structure

Appraisers also check the roof, attic, crawl space and basements for signs of water damage or other obvious structural problems. There are a few additional requirements for manufactured and modular homes to ensure they meet all state and local standards to be classified as real estate.

Pest Inspection

One big thing that’s unique to VA loans is a pest inspection, during which an inspector will check for insects that eat into wood, such as termites.

In many states, the seller is required to pay for this inspection. In certain states, the veteran can make this payment. If expenses are an issue for the seller, offering to pay for the inspection could help get your offer accepted.

The VA requires that pest inspections be done in all but these 11 states: Alaska, Colorado, Idaho, Maine, Minnesota, Montana, North Dakota, Oregon, South Dakota, Wisconsin and Wyoming. In certain states, inspections are only required in certain counties.

VA Home Appraisal Process

Now that you know what a VA appraisal looks for, let’s look at what you can expect from the process itself.

Scheduling

Once you begin the VA loan process, your Home Loan Expert will be able to schedule a VA-approved appraiser for you. The VA handles the scheduling and randomly assigns an appraiser to your property. Typically, the appraisal is requested early in the VA loan process to ensure enough time to address any issues found during the appraisal.

Timeline

Along with fees, the VA sets standards with regard to how long the turnaround for an appraisal can be. This varies state by state. Across the U.S., appraisers have between 5 and 21 business days to complete their reports. Be aware that this doesn’t necessarily mean the whole process will be over in under 3 weeks. If you need repairs, the process could take quite a bit longer.

Appraisal Procedure

Appraisers must include a location map, building perimeter sketches and photographs of either the sale property or the lot where a new home’s construction will take place. They also provide an itemized list of repairs to be completed for VA loan approval. This list also includes any corrections needed to make the property conform to regulations set by the Department of Veterans Affairs. Then, they must personally make the final value estimate and sign their name to the report. The VA will then review the appraisal report and issue a Notice of Value.

Home Inspection

It’s important to note that your VA appraisal does not cover the same ground as a home inspection. Regardless of your loan type, a home inspection and appraisal are different parts of the home buying process.

While there are some basic checks in place during this process to ensure safety and livability, you should still consider getting a home inspection before finalizing your purchase to ensure you have a thorough understanding of everything your home has in store for you.

How To Handle Problems With Your VA Appraisal

There are a few things that can go wrong with a VA appraisal that might complicate the home buying process. Being prepared can help you deal with these issues if they arise.

The Property Doesn’t Meet MPRs

If your appraiser determines that the property doesn’t meet minimum property requirements and needs repairs, you’ll need to get those taken care of before you secure your VA loan. Ideally, the seller will agree to pay for these repairs, but they aren’t obligated to do so. If they refuse, you can either pay for them yourself or walk away from the property.

Make sure you consult your real estate agent and lender to discuss your options. It can be difficult to weigh the pros and cons in this situation if you’re not a VA loan expert.

The Appraisal Is Lower Than Expected

The appraisal sets a ceiling on how much you can borrow with your VA loan. If the appraised value of the home is less than the sales price, you might not have the funding to cover the purchase.

You have the option of covering the deficit in cash, but that isn’t a realistic option for many home buyers. If that’s the case for you, too, you’ll have to negotiate with the seller, ask the VA to reconsider its appraisal or, unfortunately, walk away from the property.

A low appraisal can be a tough situation to navigate, so make sure you speak with your real estate agent and lender to determine what the best course of action is.

The Bottom Line: The Right Team Can Make For A Smoother Appraisal

An appraisal doesn’t have to be a daunting step in your effort to buy a home. Learning more about the process is a great start, but it also helps to have the right team to back you up when things get complicated.

Make sure your real estate agent and lender are both well versed in VA property guidelines. Having an agent who shows you properties that are ultimately ineligible for a VA loan is a waste of your time, and lenders who have dedicated VA loan experience can help guide you through the homebuying process with ease.

Ready to assemble your team? You can find a qualified agent at Rocket Homes® 1,2 or, if you’re ready to get started on your loan, you can apply online with Rocket Mortgage® to explore your VA mortgage options.

1 Rocket Homes® is a registered trademark licensed to Rocket Homes Real Estate LLC. The Rocket Homes® Logo is a service mark licensed to Rocket Homes Real Estate LLC. Rocket Homes Real Estate LLC fully supports the principles of the Fair Housing Act. For Rocket Homes Real Estate LLC license numbers, visit RocketHomes.com/license-numbers. California DRE #01804478

2 Quicken Loans, LLC (doing business as Rocket Mortgage) and Rocket Homes Real Estate LLC are separate operating subsidiaries of Rocket Companies, Inc. (NYSE: RKT). Each company is a separate legal entity operated and managed through its own management and governance structure as required by its state of incorporation, and applicable legal and regulatory requirements.

This Post Has 17 Comments

  1. Hello,

    I am currently looking at homes and looking to use my VA loan, but many of the homes in the area that I’ll be moving to are very old and need updates. How will something like an ungrounded electrical system affect my ability to buy a home with a VA loan? I understand that the VA will not cover renovation costs in the total loan amount, but will something like this prevent me from buying the home, even if we’re willing to pay out of our own pockets to correct the issues once purchased? Other common factors I’m encountering in my search are roofs that need work/to be replaced, or HVAC system needing updates.

    Thank you,
    Michelle

    1. Hi Michelle:

      There are a few scenarios that might be applicable here. Ultimately, it’s going to depend on the house and the specifics of the situation, so you want to talk to one of our Home Loan Experts. That said, I can give you a little information. If you’re paying for the repairs out-of-pocket, you may just get any necessary repairs affecting livability of the property completed before moving in. If weather or a shortage of building materials made it impractical to complete the repairs before close, you might be able to do what’s called an escrow hold back in which case part of your loan funds would be dispersed after the repairs. You would have up to six months to complete repairs. For more information, I recommend you speak with one of our Home Loan Experts by calling (888) 980-6716. They would be able to go over specifics and restrictions in much greater detail.

      Thanks,
      Kevin Graham

  2. tell Me more about eligibility for second va loan for second home. I want to buy the house across the street, renovate for elder care and rent out for now.

    1. Hi Doug:

      Unfortunately, the VA only allows these loans to be used on primary residences. We can help you look into a second home, but it’s going to be an option like a conventional loan from Fannie Mae or Freddie Mac. If you’d like to go over your potential options, you can get in touch with us by filling out this form or calling (888) 980-6716 to speak with one of our Home Loan Experts.

      Thanks,
      Kevin Graham

    1. Hi Chris:

      Costs vary with every loan. We can also build the closing costs in in a lot of cases. I’m going to recommend you start by speaking with one of our Home Loan Experts to go over your situation in more detail. You can get in touch with us at (888) 980-6716.

      Thanks,
      Kevin Graham

  3. Can I use a VA Loan at my overseas posting?

    I’m PCS for a longer stint then I planned and the housing market is rather steep here.

  4. Hi, my wife and have been trying to refinance our mortgage to lower the interest rate and our monthly mortgage payment. We have 3 buildings in our 2 acre property. One is our home residence, two is a ministry house ,where we host our speakers, third the building is where people gather to be trained and ministered . My wife and are ordained pastors. We have tried to refinanced with our local banks and have not been able to help us. How can you help in this matter, The monthly payment is being paid by direct deposit.

    1. Hi Pedro:

      I’m going to suggest you talk to one of our Home Loan Experts. It sounds like you have some mixed-use operations going on with this property and there are some special guidelines are around that. If you call (888) 980-6716, they can look into your situation and give you a more definitive answer than I can on this.

      Thanks,
      Kevin Graham

  5. Are there any closing costs the veteran buyer is not allowed to pay and will become seller’s responsibility even though contract does not call for seller to pay any closing costs for buyer?

    1. Hi Linda:

      There are no such costs. This used to be the case for repairs, but it no longer is. Those can be paid by the buyer or seller, at least under our policies. Hope this helps!

      Thanks,
      Kevin Graham

  6. My husband and I have a closing date next month..but we are having to jump through hoops to get this.. was not prepared to pay 12 months of home insurance in advance..was not prepared to have more assets that we actually keep in our bank account..we live in an apt now and after buying our home our finances will be 10x better..anyone else come anyone cross similar issues?..both my husband and I are disabled and we live on a fixed income..so it is very overwhelming

    1. Hi Alice:

      I’m going to have one of our Home Loan Experts reach out and see if we can give you some advice. Thanks for reaching out!

      Kevin Graham

  7. Hello Gilbert, I don’t see any earlier response to your question and I’m wondering if anyone from Quicken got back to you. I also would like to have a home built with a VA Loan and would like some information on the process, Thanks Gilbert or anyone else.

    1. Hi Chip! At this time Quicken Loans® does not do construction loans. However, once the house is built and you’re residing in the home, we can refinance you into a conventional loan. I’ve passed your comment on to our team of mortgage experts who can discuss this in more detail with you.

  8. I am elegible for a second VA home loan. How can this be used for building a new home? The builder is a small company and can not provide financing, requiring a construction loan with permanent financing upon completion. Per local bank, this would require two separate closings and 20% down payment although credit score is approx 800. As I am getting close to retirement age, I do not want a lot of cash tied up in home equity, so a VA loan with $0 down would be ideal for my situation.

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