Can You Use a VA Appraisal for a Conventional Loan?

Home appraisals assess a property’s value and ensure it meets specific standards for mortgage approval. VA and conventional loans have distinct appraisal processes and requirements. This raises the question of whether a VA appraisal can be used for a conventional mortgage. Understanding these differences is important for homebuyers.

Understanding VA Appraisals

A VA appraisal determines a property’s fair market value and confirms it meets the Department of Veterans Affairs’ Minimum Property Requirements (MPRs). VA-approved appraisers conduct these appraisals, focusing on the home’s safety, structural soundness, and sanitary conditions.

MPRs cover adequate living space, functional mechanical systems, a sound roof, safe water supply, and proper sewage disposal. They also ensure the property is free from hazards like lead-based paint or wood-destroying organisms. While appraisers note visible repairs, the VA appraisal primarily establishes value and compliance with VA guidelines. A Notice of Value (NOV) is issued, outlining the appraised value and any required repairs.

Understanding Conventional Appraisals

A conventional appraisal establishes the market value of a property to assure the lender that the loan amount is justified by the collateral. These appraisals are performed by state-licensed or certified appraisers who evaluate the property’s condition, location, and recent comparable sales. The primary guidelines for conventional appraisals often align with standards set by government-sponsored enterprises like Fannie Mae and Freddie Mac.

The appraiser assesses the home’s physical attributes, including size, condition, and improvements. External factors like neighborhood and market trends are also considered to determine marketability. While health or safety concerns that impact value are noted, the focus is less on stringent property condition standards compared to VA appraisals.

Acceptability of a VA Appraisal for a Conventional Loan

Generally, a VA appraisal cannot be directly used for a conventional loan. This is due to distinct requirements and objectives that differentiate the two appraisal types. Conventional lenders and their investors, such as Fannie Mae and Freddie Mac, adhere to their own specific appraisal guidelines and often require a new, independent appraisal to mitigate risk.

The fundamental differences in appraisal standards are significant. VA appraisals include specific Minimum Property Requirements (MPRs) that ensure a home’s safety, soundness, and sanitary conditions, exceeding the typical scope of a conventional appraisal. While both determine market value, the VA process has distinct administrative elements not applicable to conventional lending.

Lenders order appraisals through Appraisal Management Companies (AMCs) to ensure appraiser independence and compliance. Appraisals are loan-specific documents, generally not transferable between different loan programs or lenders. Even if a property meets VA MPRs, a conventional lender will likely require an appraisal tailored to their specific underwriting criteria and risk assessment.

Steps for Obtaining a Conventional Appraisal

When a conventional loan requires an appraisal, the lender initiates the process. The borrower is responsible for the appraisal fee, typically ranging from $400 to $700, but does not directly order it. Instead, the lender works with an Appraisal Management Company (AMC), which assigns a licensed appraiser to the property.

The assigned appraiser visits the property for a physical inspection, taking measurements and photographs. They also research comparable sales data to determine market value. The completed appraisal report is submitted directly to the lender for review. The borrower receives a copy after lender approval. The timeline for a conventional appraisal varies, often taking one to two weeks, depending on property complexity and appraiser availability.