Military Service Members and Veterans are in a unique position to take advantage of the many benefits of VA loans. But to secure your VA loan, you need to meet the VA appraisal requirements.
Here are the answers to your most pressing VA appraisal questions.
1. How does the VA define an appraisal?
The VA defines an appraisal as the “reasonable or market value of a property for VA home loan guaranty purposes.” In other words, the appraisal determines the value of a home under current market conditions so that the VA can confidently back the loan for that home.
2. How does a VA appraisal differ from other appraisals?
Unlike standard home appraisals, VA loan appraisals come with a list of Minimum Property Requirements (MPRs) that must be met for the property to “pass” the appraisal.
Appraisers are given an extensive VA appraisal checklist of the MPRs to ensure that the property is in generally good condition. These MPRs include:
- Working electrical systems
- Functional heating and cooling systems
- Adequate roofing (with no signs of needing replacement in the near future)
- Continuous supply of clean water with sanitary facilities
- Safe and sanitary sewage disposal
- Accessibility (there must be an all-weather driveway to the property)
- Free of lead-based paint, dry rot, and termites
- Accessible and properly ventilated crawl spaces and attics
If a property fails to meet the MPRs, the home “fails” the VA appraisal and does not qualify for a VA loan.
3. What should I look for when I’m shopping for a home to prepare for my appraisal?
Since the VA MPRs can eliminate some properties from qualifying for a VA loan, you should focus your home search on properties that are most likely to qualify for a VA loan. This means skipping the serious fixer-uppers in favor of well-maintained homes. Prepare with this handy checklist to that ensure your property is a good fit.
It’s also important to keep property type in mind. VA loans only apply to residential properties where you will live full-time. But if you have plans to become a real estate investor, you can purchase a multi-family property of up to four units as long as you choose one of the units to be your primary residence.
4. What does a VA Appraiser look for when conducting their appraisal?
A VA Appraiser will first confirm that the property qualifies for a VA loan, using the VA MPR checklist. Then the appraiser will document the property information (such as size, age, location, and condition) and find similar homes that recently sold. These comparable sales can be used to determine the current market rate on a per-square-foot basis, which can then be used to calculate the current value of the subject property.
5. What are VA appraisal fees?
VA appraisal fees vary by state. And in large states, like California, fees may vary by county.Effective December 1, 2021, fees for single-family homes can range from $525 in South Carolina to over $1,300 in parts of Alaska. If you’re purchasing a manufactured home or multi-family property, expect the fees to be a bit higher.
In most cases, for a single-family VA appraisal, you’ll pay between $500 and $800 (effective December 1, 2021). But the fees may be over $1,000 in some high-value counties.
If you’re purchasing a manufactured home, expect to pay an extra $50-$100. And if you’re looking at multi-family properties, you’ll probably pay an extra $200-$300.
6. Who pays for VA appraisal fees?
The buyer typically pays for the appraisal. In most cases, your lender will order the appraisal and the appraisal fee will be included in your closing costs.
7. How long does a VA appraisal take? And can I check the status?
It can take one to three weeks to complete a VA appraisal, with most counties completing the process in 7-10 days. The exact time depends on the current demand and availability of local appraisers. You will get updates on the status of your appraisal from your dedicated OVM loan officer.
8. Is a home inspection also required if I complete the VA appraisal?
A home inspection isn’t technically required by the VA, but it is a critical process for protecting your interest as a home buyer. While the appraisal simply confirms that the minimum standards are met, it does not provide a detailed report on the condition of the home like a home inspection will. With your home inspection, you’ll get a complete report of all accessible parts of the home so that you know exactly what you’re getting and what the potential issues are before committing to the purchase. Learn more about the differences between the two reports here.
At OVM Financial, we understand that the VA appraisal and loan process can be confusing. But our loan officers work with the VA every day to make home loans accessible to veterans and military members, so we can help you navigate the process. You can contact us at 757-296-2148 to get all your loan questions answered. And if you’re ready to apply for a home loan, you can start your loan application online at ovmfinancial.com/QuickStart.