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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