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Are VA appraisers harder than conventional appraisals?

Are VA appraisers harder than conventional appraisals?

Shorter Answer:

No, appraisers for VA mrotgages are not harder than their conterparts that do Conventional mortgages. Appraisers for VA mortgages must follow slightly different rules and look for different things (safety and hazard issues) compared to appraisers for Conventional mortgages. In reality, VA appraisers might complete appraisals for those looking for Conventional financing.

Longer Answer:

In the home buying journey, the role of an appraiser is pivotal in determining a property's value, influencing the mortgage amount a lender is willing to offer. While the appraisal process varies between VA (Veterans Affairs) mortgages and conventional mortgages, it's important to note that VA appraisers are often the same professionals who conduct appraisals for conventional mortgages. Here's a closer look at the distinctions and overlaps:

1. Appraiser Selection:

  • VA Mortgage: The Department of Veterans Affairs has a specific process for selecting appraisers. They maintain a roster of approved appraisers who are familiar with VA guidelines. The VA assigns an appraiser to a property, ensuring that the appraiser is unbiased and independent.
  • Conventional Mortgage: Lenders typically select appraisers from a list of approved professionals. The selection process is less centralized than the VA's, allowing lenders more flexibility in choosing appraisers.

2. Appraisal Guidelines:

  • VA Mortgage: VA appraisers must adhere to the VA's Minimum Property Requirements (MPRs). These guidelines ensure that the property is safe, structurally sound, and sanitary. The MPRs are more stringent than those for conventional loans, focusing on the well-being of veterans and their families.
  • Conventional Mortgage: Appraisers follow guidelines set by entities like Fannie Mae and Freddie Mac. While these guidelines ensure the property is marketable and meets basic safety standards, they are generally less strict than VA MPRs.

3. Appraisal Fees:

  • VA Mortgage: The VA sets a maximum allowable fee for appraisals, which can vary by state. This ensures that veterans are not overcharged for appraisal services.
  • Conventional Mortgage: Appraisal fees for conventional loans are determined by the market and can vary widely. Lenders may charge different fees based on the complexity and location of the property.

4. Appraisal Process:

  • VA Mortgage: The VA appraisal process includes a thorough inspection to ensure compliance with MPRs (safety and hazard issues). If issues are found, they must be addressed before the loan can be approved. This can sometimes lead to delays if repairs are needed.
  • Conventional Mortgage: The appraisal process is typically quicker, as the focus is primarily on determining the market value of the property. While issues may be noted, they do not necessarily need to be resolved before closing.

5. Reconsideration of Value:

  • VA Mortgage: If a veteran believes the appraised value is too low, they can request a Reconsideration of Value (ROV) through their lender. The VA has a formal process for reviewing and potentially adjusting the appraisal.
  • Conventional Mortgage: While borrowers can challenge a low appraisal, the process is less formalized than the VA's ROV. It often involves providing additional comparable sales data to the lender.

Conculsion

While both VA and conventional appraisals aim to determine a property's value, the processes and guidelines differ significantly. VA appraisals are more regulated and focused on the safety and well-being of veterans, while conventional appraisals offer more flexibility and speed. The individuals who complete the appraisal may be the same.

If you have other appraisal questions, please reach out at teamjd@mainstreethl.com

These blogs are for informational purposes only. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Should you have any questions about the information provided, please contact me.

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