VA Appraisal Policies

Veterans Benefits Administration sent this bulletin at 12/16/2021 12:53 PM EST

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Greetings,

Loan Guaranty Service would like to bring the following VA appraisal policies to the attention of all stakeholders. These policies may be advantageous for Veterans obtaining VA-guaranteed loans in making their offers more competitive when purchasing a home in a seller’s market.

Repair Waivers: Veterans may request a waiver of Minimum Property Requirement repairs listed on the Notice of Value with the concurrence of their mortgage lender. The property must still be habitable from a standpoint of safety, structural soundness, and sanitation. Details are in Chapter 12, Topic 44, of the VA Lenders Handbook.

Consideration of Additional Market Data: Before an appraisal is completed for a purchase transaction, the appraiser will notify the requester if it appears that the estimated market value will be below the sales price. The appraiser will allow 2 business days for the requester, or parties to the transaction contacted by the requester, to submit any additional sales data that they wish to have considered. This process, known as the “Tidewater Procedure”, as VA first piloted this procedure in the Tidewater area of Virginia, is outlined in Chapter 10, Topic 8, of the VA Lenders Handbook.

Reconsideration of Value: After the appraisal has been completed and a Notice of Value (NOV) has been issued to the Veteran, the Veteran may request a reconsideration of value. Within 5 business days, VA staff will review the appraisal report, any additional data submitted with the request, as well as the market data available through VA’s Appraisal Management System. If VA staff concludes that an increase in the estimated reasonable value is supported by the market, VA will issue an amended NOV. Details are in Chapter 10, Topic 22, of the VA Lenders Handbook.

The VA Lenders Handbook is available online at Lenders Handbook - VA Pamphlet 26-7 - Web Automated Reference Material System. For more information on the VA Home Loan program, visit VA’s website at https://www.benefits.va.gov/homeloans/.

Sincerely,

Loan Guaranty Service

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