VA Appraisal - Certificate of Reasonable Value:
The CRV (certificate of reasonable value) is based on an
appraiser's estimate of the value of the property to be
purchased. Because the loan amount may not exceed the CRV, the
first step in getting a VA loan is usually to request an
appraisal. Anyone (buyer, seller, real estate personnel or
lender) can request a VA appraisal by completing VA Form
26-1805, Request for Determination of Reasonable Value. After
completing the form, it can either be mailed to the Loan
Guaranty Division at the nearest VA office for processing or
an appraisal can be requested by telephoning the Loan Guaranty
Division for assignment of an appraiser. The local VA office
may be contacted for information concerning its assignment
procedures. The appraiser will send a bill for his or her
services to the requester according to a fee schedule approved
by VA. To simplify things, VA and HUD/FHA (Department of
Housing and Urban Development/Federal Housing Administration)
use the same appraisal forms. Also, if the property was
recently appraised under the HUD procedure, under certain
limited circumstances, the HUD conditional commitment can be
converted to a VA CRV. The local VA office can explain how
this is done.
It is important to recognize that while the VA
appraisal estimates the value of the property, it is not an
inspection and does not guarantee that the house is free of
defects. Homebuyers should be encouraged to carefully inspect
the property themselves, or to hire a reputable inspection
firm to help in this area. VA guarantees the loan, not the
condition of the property.
Application:
The application process for VA financing is no different from
any other type of loan. In fact, the VA application form is
the same as that used for HUD/FHA and conventional loans. The
mortgage lender verifies the applicant's income and assets,
and obtains a credit report to see that other obligations are
being paid on time. If all is well and the appraised value of
the property is enough to cover the loan needed, the lender,
in most instances, can then close the loan under VA's
automatic procedure. Only about 10 percent of VA loan
applications have to be submitted to a VA office for approval
before closing.
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