Introduction
Homeownership is a cornerstone of the American dream, and for our nation's veterans and service members, the VA home loan program is a powerful tool to help achieve it. A crucial step, and one that many people just don't understand in this journey, is the VA appraisal process. This blog post aims to demystify the appraisal process, focusing on the VA Appraisal Fee Schedules and Timeliness Requirements, and the Minimum Property Requirements (MPRs) set forth by the Department of Veterans Affairs. My goal is to provide an easy-to-understand guide that empowers you with knowledge and confidence.
What is a VA Appraisal?
A VA appraisal is more than just determining the value of a home; it's a process to ensure the property meets the VA's standards for safety, structural integrity, and value. This appraisal is a unique aspect of VA loans and is different from a regular home inspection.
VA Appraisal Fee Schedules and Timeliness Requirements
The Department of Veterans Affairs sets specific guidelines on how much can be charged for an appraisal and how quickly it must be completed. These fees and timelines vary based on the location of the property and are updated periodically, so be sure your lender is talking to you about how much your appraisal should cost and when you can expect it to take place. Generally, the appraisal fee is reasonable and is comparable to conventional appraisal costs. I've noticed around military bases the VA deems the counties "high demand" and charges a little more. The timeliness requirement, usually within a few weeks, ensures that the home buying process keeps moving forward without significant delays.
Understanding Minimum Property Requirements (MPRs)
MPRs are the VA's standards for what makes a property safe, sanitary, and structurally sound. These include:
- Structural Integrity: The home must be free from defects that could affect its stability and safety (An ugly house isn't a reason for an appraiser to call something out).
- Safety: The property must meet local building codes and be free from hazards.
- Sanitary Conditions: There must be adequate facilities for living, including water, sewage, and electricity.
- Size and Accessibility: The property should be of adequate size and layout to meet the basic needs of the homeowner, with appropriate access from the street.
These requirements ensure that veterans and service members invest in properties that are not only valuable but also safe and comfortable for their families.
The Appraisal Process
- Initiation: Once a purchase agreement is signed, the lender orders a VA appraisal.
- Inspection: A VA-certified appraiser inspects the property, focusing on the MPRs and determining the fair market value.
- Report: The appraiser submits a report to the lender, outlining any MPR issues and the appraised value of the home.
What Happens if a Home Doesn't Meet MPRs or Value?
If a home doesn't meet MPRs or value, it's not the end of the road. Options include:
- Seller Repairs: You can ask your Realtor to negotiate with the listing agent to ask the seller to make necessary repairs to bring the home up to standard.
- Tidewater: The appraiser will NOT give value. They will ask for the Realtors to assist in finding value by allowing them to submit comparable sales that support the purchase price. There is a 48 hour allowance for this before the appraiser will complete their report and submit it.
- Reconsideration of Value: If (after Tidewater) the appraisal still comes in lower than the sale price, you can ask your Lender if they can submit a reconsideration of value on your behalf. Some Lenders are not savvy in this practice. Ensure you're working with a dedicated VA-specific Lender to have the best chance at success. If the price STILL comes in lower than sales price after the ROV, then you can ask your Realtor to negotiate the price or you can pay the difference.
Conclusion
The VA appraisal process is a critical part of securing a VA home loan, ensuring that the investment is sound and the living environment is safe. By understanding the basics of the appraisal fee schedules, timeliness requirements, and MPRs, veterans and service members can navigate the home buying process more effectively.
For detailed information on the VA Appraisal Fee Schedules and Timeliness Requirements, please visit the Department of Veterans Affairs website or reach out to me! Remember, this process is there to protect your investment and future, ensuring that the home you choose is a safe and valuable asset.
