What Is a VA Home Appraisal?

A VA appraisal is an essential step in the VA home loan process, ensuring that the property meets both value and safety standards established by the U.S. Department of Veterans Affairs (VA). Here’s what you need to know:

• Purpose: A VA appraisal assesses the home’s market value and ensures it complies with the VA’s Minimum Property Requirements (MPRs), focusing on safety, sanitation, and structural soundness.
• Who conducts it: A VA-approved appraiser, certified and registered with the VA.
• Who pays for it: Typically, the buyer is responsible for covering the cost of the appraisal.
• What it includes: The appraisal involves inspecting the property, comparing it to similar homes, and providing a report detailing the estimated value and key findings.
• When it’s required: VA appraisals are mandatory for all VA purchase loans and VA cash-out refinances.
• Why it’s important: It ensures buyers don’t overpay for a property and verifies that the home is safe and habitable.

Key MPRs for VA Loans:

• Adequate living, sleeping, cooking, and dining space.
• Functional bathrooms.
• Safe access via public or private streets with all-weather surfaces.
• Reliable water supply, hot water, and proper sewage disposal.
• Operable, safe, and protected mechanical systems.
• Roof in good repair.
• Crawl space access that is ventilated and free of hazards.

Common Issues Appraisers Look For:

• Leaks in basements or around windows.
• Dry rot, mold, or fungus.
• Peeling or chipping paint.
• Missing or damaged siding.
• Termite infestations or evidence of past damage.

A VA appraisal not only protects you as the buyer but also ensures the property meets the VA’s standards for a secure and livable home.

Why VA Appraisals Matter

The VA appraisal protects both the borrower and the lender. For the borrower, it prevents overpaying for a home or committing to a property that requires significant repairs. For the lender, it ensures the loan is backed by adequate collateral.

“VA appraisals are not just about value; they’re about ensuring the home is a safe investment for both the buyer and the lender,” says Michael Grant, Lead Loan Specialist at Veteran Mortgage Advisors.

VA Appraisal vs. Home Inspection

One common misconception is that a VA appraisal replaces a home inspection. While both assess the property, they serve different purposes.

The VA Appraisal Process

The VA appraisal process typically takes 10 to 14 days, depending on the location and the availability of appraisers. Here’s a step-by-step overview:

1. Order the Appraisal: Your lender orders the appraisal through the VA’s online system.
2. Appraiser Visit: A VA-certified appraiser evaluates the property in person.
3. Determine Value and Compliance: The appraiser calculates the home’s fair market value and checks it against the VA’s MPRs.
4. Report Issued: A written report is sent to your lender, detailing the home’s value, condition, and any required repairs.

Minimum Property Requirements (MPRs)

The VA minimum property requirements set specific standards to ensure the home is safe and livable. These include:

• Structural Soundness: The home must have a stable foundation, roof, and walls.
• Safe Utilities: Functioning heating, plumbing, and electrical systems are required.
• Adequate Access: The home must be accessible by a public or private road.
• No Health Hazards: Issues like mold, lead-based paint, or asbestos must be resolved.

Challenges During a VA Appraisal

While the VA appraisal is designed to protect buyers, it can sometimes present challenges:

• Appraised Value Below Purchase Price: If the home’s appraised value is less than the agreed purchase price, the buyer may need to renegotiate or cover the difference.
• Required Repairs: The appraiser may list repairs that must be completed before the loan is approved.

“Low appraisals can be frustrating, but they’re an opportunity to revisit the negotiation process,” notes Sarah Blake, Real Estate Analyst at Home Hero Lending.

How to Handle a Low Appraisal

If your home’s appraised value is lower than the purchase price, consider these options:

• Renegotiate: Ask the seller to lower the price to match the appraisal.
• Appeal the decision: You can appeal the VA appraisal if it comes back too low.
• Reconsideration of Value (ROV): Provide additional evidence of the home’s value to challenge the appraisal.
• Pay the Difference: Cover the gap between the loan amount and the purchase price out of pocket.

Tips to Ensure a Smooth VA Appraisal

• Work with VA-Savvy Professionals: Choose a lender and real estate agent experienced with VA loans.
• Prepare the Home: Sellers should address visible issues, such as peeling paint or broken windows, before the appraisal.
• Review Comparable Sales: Provide recent sales data for similar homes in the area to support the home’s value.

Current Housing Market Impact on VA Appraisals

The current housing market presents unique challenges for buyers and appraisers alike. Limited inventory and rising prices make appraisals more critical than ever.

• Median Home Price: The National Association of Realtors (NAR) reported a median home price of $396,000 in October 2024, up 3.8% from the previous year.
• VA Loan Growth: VA loans accounted for 13% of all new mortgages in 2024, highlighting their importance in today’s market.

Costs Associated with a VA Appraisal

VA appraisal fees vary by location but generally range from $425 to $875. Other potential costs include:

1. Appraisal Fee

• Typical Cost: $400–$600 for single-family homes, with higher fees for multi-unit properties or unique homes.
• Factors Affecting Costs: Property type, location, and complexity can influence fees. Expedited services may cost extra.

2. Payment Responsibility

• Buyers usually pay upfront for the appraisal, though sellers or lenders may occasionally cover it.

3. Additional Fees

• Reinspection Fees: $100–$150 if repairs are required.
• Transfer or Cancellation Fees: May apply if the borrower changes lenders or cancels the appraisal.

4. Related Expenses

• Repairs to meet VA standards and optional home inspections are additional potential costs.

Frequently Asked Questions

What is the purpose of a VA appraisal?

A VA appraisal ensures the home’s value matches the loan amount and meets VA safety and livability standards.

How long does a VA appraisal take?

Most VA appraisals are completed within 10 to 14 days, though timelines vary by location.

Can a VA appraisal be challenged?

Yes, borrowers can request a Reconsideration of Value (ROV) by submitting additional evidence to support a higher appraisal value.

Are VA appraisals stricter than conventional ones?

VA appraisals include Minimum Property Requirements (MPRs), making them more focused on safety and livability than conventional appraisals.

Who pays for the VA appraisal?

The buyer typically pays the appraisal fee, though sellers may contribute as part of negotiations.

What happens if the appraisal is lower than the purchase price?

Options include renegotiating the price, providing additional evidence for an ROV, or covering the difference out of pocket.

Do VA appraisals include a home inspection?

No, a VA appraisal is not a substitute for a home inspection. Buyers should still hire an inspector for a thorough evaluation.

Can the VA appraisal fee be refunded?

No, the VA appraisal fee is non-refundable, even if the transaction does not close.