Many consumers and realtors are frightened by VA home loan appraisals. But in reality, they are not as tough as they seem. The VA sets strict guidelines for the lenders to follow, more specifically in regards to inspection scheduling and appraisal report due dates. This often forces the appraisal to be completed more quickly than other types of loans.
Although the exact timing varies per state, the normal required time for VA home loan appraisals to be scheduled after an inspection is ordered is within 24–48 hours. Additionally, the report has timeline requirements set by the VA. The appraiser must have the report completed and sent back to the lender within five to ten days (not just business days). Some states allow a couple extra days’ time but the vast majority are within five to ten days max.
Did you know that the VA also sets max price for the appraisal fee? That’s right! An appraiser will often increase the cost of the inspection if the property is unique, in a rural area, or larger in size; making the report more difficult and more expensive to complete. The VA however, sets strict fees as to how much an appraiser can charge a veteran for the appraisal often resulting in lower closing costs to the borrower.
So what makes a VA home loan appraisal different from all others? First, the VA enforces strict timelines to complete the report and therefore speed up the process. Second, the appraisal fee is set in stone—protecting veterans from being overcharged for the report. Third, the appraiser simply does his due diligence to make sure the home is safe, sanitary, and secure for the veteran and his or her family.
What happens once the VA Home Loan appraisal is complete?
There are a few more steps to be completed once the appraisal is sent to the lender. Keep in mind the reasoning behind the extra due diligence is to simply make sure that the veteran receives the best service, the best appraisal, and the best home loan, all by an experienced lender, such as Homesite Mortgage.
First, the appraisal must be looked at by a Staff Appraisal Reviewer (SAR), which is a fancy term for an experienced underwriter already approved by the VA to review these types of appraisals. The SAR is responsible for reviewing the report and making sure the appraiser has met the minimum appraisal requirements and the property meets VA minimum requirements.
Second, once the appraisal is reviewed and approved by the SAR, the report must then be uploaded to the VA’s portal, or website for a second review. Even though the normal turnaround time is only a day or two for review, Homesite Mortgage always makes VA appraisals a high priority in order to meet our closing time frame.
Third, after the VA reviews the appraisal they will issue what’s called an NOV or Notice of Value. This is the “True” value acceptable by the lender.
The NOV typically matches the value on the report and is rarely ever lower, but it is possible for the value to come back higher. Typically, this is only when the lender disputes the report with the appraiser or VA. When this happens, the lender can go directly to the VA and request a higher value as long as the lender provides sufficient documentation and reason for why they believe the value should be higher. This is yet another example of why choosing the right lender for your VA home loan is so important—at Homesite Mortgage we have the experience you need.
Because of this, until the NOV is issued by the VA, the appraisal cannot be given to the borrower. Once a SAR reviews and approves the appraisal, and the VA representative also reviews the appraisal and provides the NOV or “true value” of the property, the appraisal can be shared to all parties involved.
How long is a VA home loan appraisal valid?
VA appraisals are valid for up to six months but expire immediately when the loan closes. In other words, if you buy a house and use your VA benefits, then decide to refinance down the road, a new appraisal report must be completed. The only exception to this rule is if you decide to utilize the VA IRRRL program (Interest Rate Reduction Refinance Loan).
However, what’s nice about VA home loan appraisals is that they can be transferred to another company if you’re not happy with their service. So if you’re currently going through the VA home loan process and the lender is taking too long, call Homesite Mortgage today at 855-225-9827 and let the experts take over.
Written by Tom McSwain, U.S. Air Force Veteran