Does a VA Appraisal Stay With the Property?
Discover if a VA appraisal report remains with a property for future sales or if new transactions require fresh assessments.
A VA appraisal is a specific evaluation required for homes purchased with a Department of Veterans Affairs (VA) home loan. This assessment serves as a fundamental step in the homebuying process for eligible veterans, ensuring the property meets specific standards before a loan can be approved. It provides an unbiased professional opinion of the home’s market value, which helps protect both the veteran borrower and the lender.
Understanding the VA Appraisal’s Role
The core function of a VA appraisal is twofold, serving distinct but interconnected purposes for the VA and the lender. Primarily, the appraisal aims to establish the reasonable value of the property, ensuring that the purchase price does not exceed the home’s fair market worth. This assessment protects the veteran from overpaying and the lender from providing a loan amount that surpasses the collateral’s actual value. An appraiser uses current market data and recent sales of comparable properties to determine this value.
Beyond valuation, the VA appraisal also verifies that the property adheres to the Department of Veterans Affairs’ Minimum Property Requirements (MPRs). These requirements are designed to ensure the home is safe, structurally sound, and sanitary. MPRs cover various aspects, including working electrical and HVAC systems, a sound roof, adequate living space, and a clean water supply.
If a property does not meet MPRs, necessary repairs must be completed before the loan can be finalized. The appraisal is specifically conducted for the benefit of the VA and the lender to assess the property’s suitability and value for that particular loan transaction, rather than as a general market valuation for any potential buyer.
How VA Appraisals Relate to the Property
While a VA appraisal thoroughly assesses the property’s condition and value, the resulting appraisal report is a document specific to a particular VA loan application. The appraisal evaluates inherent property characteristics such as square footage, number of bedrooms, and overall condition. These physical attributes are intrinsic to the property itself.
The valuation opinion and the specific report generated, known as the Notice of Value (NOV), are transactional in nature. This means the appraisal report does not permanently “attach” to the property in public records for all future transactions. Instead, the appraisal is primarily tied to the specific veteran borrower and their loan application.
The Longevity of a VA Appraisal
A VA appraisal, specifically the Notice of Value (NOV), has a defined validity period for the original VA loan transaction for which it was ordered. This validity typically extends for six months from the effective date of the appraisal. If the loan does not close within this 180-day period, the appraisal expires, and a new one may be required.
An appraisal can be reused or transferred under specific circumstances, but generally not to a different VA buyer. The appraisal is considered to “stick with the veteran” who originally ordered it, meaning that if the veteran borrower switches lenders, the appraisal can often be transferred to the new lender. However, if a different veteran buyer attempts to purchase the same property, a new appraisal is almost always necessary. Market conditions can change significantly over time, necessitating a fresh assessment for each new transaction.
Implications for Future Property Transactions
The existence of a previous VA appraisal carries different implications for subsequent property sales, depending on the type of buyer. For a non-VA buyer, such as someone using a conventional loan, a prior VA appraisal has no direct bearing or legal standing. Their lender will require a new appraisal specific to their loan type and current market conditions. This ensures that the property’s value is assessed according to the standards of the conventional lending market.
For future VA buyers, a new appraisal is typically required for each new VA loan application. The Department of Veterans Affairs mandates that each loan transaction be supported by a current valuation that reflects the property’s condition and market value at that specific time. This practice accounts for potential fluctuations in market values and ensures that the property continues to meet VA Minimum Property Requirements for the new buyer.