VA Underwriting Guidelines 

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VA Appraisal Guidelines

VA Appraisal Requirements

A VA appraisal is required to help ensure that any property which will become the security for a VA-guaranteed loan has a value of at least as much as the loan amount, and is in a condition acceptable to VA. This site goes into great detail.

VA prefers that the lender request the appraisal, although it can be requested by any other party to the transaction, provided the appraiser is assigned by VA. 

Lenders must ensure that agents and mortgage brokers requesting VA appraisals on their behalf are familiar with the requirements. 

Cost Approach

Appraisers do not have to report the cost approach for VA purposes, unless it is applicable to the appraisal.

Income Approach

If the appraisal involves an income-producing property (more than one living unit), the appraiser will use value estimates developed through both the income approach and the sales comparison approach in the final reconciliation.

Remaining Economic Life

For VA Loan Guaranty purposes, the remaining economic life of the security must be at least as long as the loan repayment term.  A short remaining economic life estimate must be supportable and not arbitrarily established. This is to avoid depriving veterans of the home of their choice in an area where they can afford to live. 

Declining Values

Maximum LTV is 90% when the appraiser indicates values are declining.  (this is applicable on all VA appraisals for any type of property)

General Requirements

Every VA appraisal must:

  • Be performed in a timely manner
  • Conform to USPAP (Uniform Standards of Professional Appraisal Practice)
  • Meet the additional requirements that VA considers to be supplemental to USPAP 

Timelines

Appraisal Requestors must notify the fee appraiser on the same day as the appraisal assignment is made by VA.  Fee appraisers must complete VA assignments as quickly as appraisals for conventional loans are completed in the area where the property is located. 

An exception may be allowed in a particular case if:  Valid extenuating circumstances are documented, and VA (or the lender's staff appraisal reviewer in LAPP cases) is notified by the appraiser. 

USPAP

Every VA appraisal report must meet the Uniform Standards of Professional Appraisal Practice (USPAP) requirements for a complete appraisal, but may be issued as either a self-contained Appraisal Report or a Summary Appraisal Report. ... There are potential exceptions:

  • VA prior approval is required for the extremely rare case in which a "restricted" appraisal is justified.
  • VA prior approval is required for any case in which the USPAP departure rule is used.
  • The USPAP jurisdictional exception permits Federal agencies to follow their own requirements when there is a conflict between USPAP and Federal agency requirements. 
  • A properly completed appraisal report form on either: Uniform Residential Appraisal Report (URAR), Freddie Mac Form 70/Fannie Mae Form 1004, unless the property is a condominium unit or is income-producing (more than one living unit). Individual Condominium Unit Appraisal Report, Freddie Mac Form 465/Fannie Mae Form 1073, if the property is a condominium unit. 
  • Small Residential Income Property Appraisal Report, Freddie Mac Form 72/Fannie Mae Form 1025, if the property has two to four living units. A properly completed Statement of Limiting Conditions and Appraiser's Certification, Freddie Mac Form 439/Fannie Mae Form 1004B. 
  • A location map, showing the location of the subject and each comparable. 
  • A building perimeter sketch showing the "footprint" of the improvements. The calculation for the square foot size of the property must also be shown either here or in the "Comments on Cost Approach" section of the URAR.  
  • Any additional appraisal or repair-related information that may be needed to support the fee appraiser's conclusions. (The appropriate areas on a computer-generated URAR can be expanded to include such information, provided the standard sequence of the URAR instructions, information entries, etc., does not change and the "Sales Comparison Analysis" does not appear on two separate pages). 
  • The appraisal request (VA Form 26-1805) provided by the appraisal requester. The appraiser must confirm, and correct if necessary, all information provided by the appraisal requester, which is pertinent to the value estimate. 

Photograph Requirements

In proposed construction cases, a front view photograph of each comparable is required but photographs of the subject property are not required if there are no improvements under construction. 

If the property is in a condominium more than three units high, no photographs of the comparable sales are required, provided they are located in the same project as the subject property and are substantially identical to the subject property. 

In all other cases, each appraisal report requires: 

  • One set of original photographs of the subject property (two sets in LAPP cases) showing a front and back view (preferably including a different side view in each photograph) and the street scene, and 
  • One set of original photographs of each comparable. Only a front view of the comparable sales is required. 
  • In E-commerce transmission, one set of photographs is acceptable. 

There are two alternatives to submitting original photographs: Computer-generated pictures are acceptable, if they are of comparable quality to original photographs and,  Copies of listing service or advertising pictures are acceptable for the comparable sales, but not the subject, if they clearly depict the property. 

No limiting conditions can be made in addition to those on Freddie Mac Form 439/Fannie Mae Form 1004B.

Sales Comparison Approach

Since VA relies exclusively on the sales comparison approach to value (except in very unusual circumstances involving inadequate or no comparable sales available or an extremely unique property), the VA value estimate should never exceed that indicated by the sales comparison approach. 

The appraiser must select the three best comparable sales available and properly adjust the sales price of each one for differences between it and the subject property.  The goal is for the VA value estimate to not exceed the price at which similar properties can be purchased in the current market.

The appraiser must adequately explain any reliance on sales that are not truly comparable to the subject.  If there is a wide range in comparable sales prices, the appraiser must adequately explain. 

A single data source is adequate if it provides quality sales data verified by closed transactions. Sales data provided by a party to the sale or financing of the subject property must be verified by a party without such an interest. 

Comparable sales should be recent.  Although they should generally not be more than 12 months old, sales over six months old may be considered outdated in some markets.  The appraiser must adequately explain reliance on outdated sales data. 

Comparable sales should be located as close to the subject as practicable. Their proximity to the subject (such as three blocks north) must be described.  The appraiser must adequately explain any reliance on sales located either:  further from the subject than similar comparables, or outside of the subjects market area. 

Generally, good comparables require minimal adjustment for individual features and a minimal total net adjustment. The appraiser must adequately explain large adjustments. 

Adjustments based on some factor other than market reaction (for example, builder costs for materials, project development, etc.) are not acceptable. 

The appraiser must report:  In the "neighborhood" section of every URAR or on an addendum, the prevalence of sales or financing concessions (for example, interest rate buy-downs, inclusion of non-realty items in the transaction, seller payment of any buyer closing costs, etc.). 

If any of the comparables sales involved such concessions, the concession's effect (if any) on the comparable sales price (when such information is reasonably ascertainable). In doing so, the appraiser should consider: that the effect of financing/sales concessions can vary in different locales and that the amount of any adjustment should generally be based upon the real estate market reaction to the concession, and not on the dollar-for-dollar cost of the concession(s) to the seller.

In proposed construction cases, closed sales by the same builder, sales in competitive subdivisions and re-sales of similar existing properties. 

In every case, the appraiser must:  

  • Consider the supply and demand for available housing in the subject market area, and report, either in the "Neighborhood" section of the URAR or on an addendum, the average listing price to sale price ratio for the subject market area. 
  • Professional judgment must be used to estimate the that raio if it cannot be determined from available data sources. 
  • They must also consider the marketing time trend (increasing or decreasing) in the subject market area, and report, either in the "Neighborhood" section of the URAR or on an addendum, the extent of increase or decrease in the average marketing time (listing period) in that market area (for example, "In the last 3 months, the listing period in the subject's market area decreased from 180 to 190 days").
  • Analyze sales listings, contract offers and unsettled sales to determine if market conditions changed between the date each comparable sold and the date of the subject property appraisal.  This is especially important in markets with readily increasing or decreasing values. If the subject property is in a new subdivision, the analysis must include the builder's closed sales, sales in competitive subdivisions and sales of similar existing properties. 
  • Certify, either in the “Neighborhood” section of the URAR or on an addendum, “I have considered relevant competitive listings/contract offerings in performing this appraisal, and any trend indicated by that data is supported by the listing/offering information included in this report.” 
  • Provide a listings/offers addendum if a significant market transition is indicated in the "Neighborhood" section (due to changes in employment opportunity, housing supply/demand, average marketing time, seller concessions, etc. 

If an Addendum is Required 

It must provide all of the following information regarding at least three competitive listings or verifiable, bona fide contract offerings considered the most similar and proximate to the subject: 

  • The type of information usually found in an MLS entry or other listing. 
  • How long each property has been on the market (total time listed). 
  • Any change in the listing price of each property (if known). 
  • A short statement comparing the property to the subject. Contract offerings are more desirable than listings. 
  • Any new construction contract must clearly identify every optional item and variation from the basic house type and any sales/financing concession included in the sales price. 

Listings must be properly identified and may include a legible copy of a MLS entry.  Although not required, it may be helpful to make adjustments or otherwise use a sales comparison analysis grid.  Sales listings, contract offers, and unsettled sales must not be used as comparable's. If such data is clearly identified and fully explained, however, it can be used to support a time adjustment. 

Existing Construction

The fee appraiser must check the “Reconciliation” section of the URAR either “As is” if the property meets MPRs (Minimum Property Requirements) with no repairs needed, or “Subject to the repairs….” if repairs are needed to make the property meet MPRs.  In that situation, the appraiser must also state “Subject to the MPR repairs noted in the comments section.” under “Conditions of Appraisal” and provide an itemized list of recommended repairs or other action necessary to make the property meet MPRs in the “Comments” section under “Condition of the improvements....” 

When there is an indication of a potential environment problem (e.g., abandoned underground fuel storage tank), the appraisal report must be conditioned for correction of the problem according to any local, state or federal requirements. 

Appraisers must not recommend electrical, plumbing, heating, roofing or other inspections only as a measure of liability protection. An inspection should be recommended only if there is an indication of a particular problem. 

Manufactured Homes Classified as Real Estate

The appraiser must enter the manufactured home unless it is both:  New, and has not been delivered to the dealer or to the site. 

If other manufactured homes on permanent foundations are not available for use as comparables, the appraisal report must:  State that fact, and show in the market analysis grid that the sales prices of the best conventional home sales available were properly adjusted. 

Property to be Altered/Improved/Repaired

When the purpose of the VA loan is to make alterations, improvements or repairs costing in excess of $3,500, the appraiser must estimate reasonable value both on an "as is" and an "as repaired" basis and disclose the full extent of the work to be done.

Partial Release of Loan Security

If an appraisal is required, the appraisal report will estimate the reasonable valve of:  The whole property on an "as is" basis, and that portion of the property which will remain as security if the release is approved. 

Building Code Enforcement

If there are local building authority requirements due to building code enforcement or urban renewal, either:  Provide evidence with the appraisal requested that those requirements are satisfied, or  the Notice of Value will be conditioned to require such evidence. 

Geological or Soil Instability

In areas that have a history of geological or soil instability, the builder must submit either:

  • A certification that to the best of the builder's knowledge and belief, any geological or soil-related hazard has been compensated for in the engineering design of the improvements and no portion of the construction will rest on fill, or 
  • Evidence from a qualified geologist or engineer that the subject site either does not present unusual geologist or engineer that subject site either does not present unusual geological soils-related hazards or such hazards have been compensated for in the engineering design of the improvements. 
  • Note: Qualified geologists are State licensed or are a member of a national or State organization which requires responsibility, experience, education and demonstrated ability in the field of engineering geology.
Note: Qualified geologists are State licensed or are a member of a National or State organization which requires responsibility, experience, education and demonstrated ability in the field of engineering geology.

Review Requirements

Every appraisal made for VA purposes must be reviewed either by the lender's VA-authorized staff appraisal reviewer (SAR) under the Lender Appraisal Processing Program (LAPP), or a VA staff appraiser.

Properties Not Eligible for Appraisal

  • Property in a badly deteriorated condition is not eligible for appraisal unless VA agrees there is a reasonable likelihood that it can be repaired to meet VA Minimum Property Requirements (MPRs) prior to loan closing. 
  • Property is not eligible for appraisal if the improvements are or will be located in A Special Flood Hazard Area (SFHA) and either: it is proposed/under/new construction with elevation of the lowest floor below the 100 year flood level, or flood insurance is not available. 
  • An area subject to regular flooding for whatever reason, whether or not it is in an SFHA. 
  • A Coastal Barrier Resources System area. An airport Noise Zone 3, if proposed or under construction. 
  • A transmission line easement involving high-pressure gas or liquid petroleum or high voltage electricity, if any part of the residential structure is located within the easement , or 
  • An area susceptible to geological or soil instability (earthquakes, landslides or other history of unstable soils), if proposed/under/new construction and the builder cannot provide evidence that either the site is not affected or the problem has been adequately addressed in the engineering design. 
  • A condominium must be acceptable to VA before any unit in the project can be eligible for VA loan guaranty. To avoid an unnecessary appraisal fee, a condominium unit should not be appraised unless there is a reasonable likelihood that VA or HUD will accept the project prior to loan closing. 
  • Property involving a less than fee simple ownership (i.e., leaseholds, cooperatives, ground rental arrangements) is not eligible for appraisal without prior VA approval of the specific legal arrangement or project. 

No new appraisal can be requested on property which already has a valid VA value determination.

Proposed or Under Constructions Properties

Individual vs Master Appraisals

Properties can be appraised prior to the start or completion of construction either individually, or s a group of 5 or more on a "master" appraisal. 

Each model or house type is appraised at the same time by the same fee appraiser on a separate appraisal report. All of the properties are included on the same VA Master Certificate of Reasonable Value. 

Master Appraisals

A Master appraisal request must include the following:

  • Plat showing the locations of each lot or unit to be included in the appraisal
  • Completed VA Form 26-1843b, Master Certificate of Reasonable Value worksheet
  • Builder Program statement, which includes: Total number of dwellings to be build in the project,  number of dwellings contemplated in the primary construction phase, anticipated starting and completion dates of that phase and, arrangements regarding the construction, dedication and maintenance of streets and utilities with information regarding any special assessments to be assumed by purchaser. 

Potential Master Appraisal Restrictions

During times of heavy VA workload or limited resources and with VA Central Office concurrence, a VA field station may temporarily refuse a builder's request for "master" appraisals if experience with that builder or location indicates that a minority of the units will receive VA financing. 

In that situation, the builder may obtain an individual appraisal on any property sold to a veteran. 

With VA Central Office concurrence, a VA field station may also limit the number of units in a "master" appraisal to the number which it believes can be successfully marketed during the validity period of the VA value notice, or optional items of equipment or variations from basic house types to be included in a "master" appraisal. 

Required Exhibits

Each set of proposed construction exhibits must include:

  • Specifications on VA Form 26-1852-Refer to the VA for details. 
  • Plot plan which includes the location of the well/septic systems, if applicable. 
  • All exterior building elevations. 
  • Foundation or basement plan. 
  • Plan of all floors. 
  • Sectional wall details. 
  • A certification signed and dated by a technically qualified and properly identified individual (such as, builder, architect, engineer, etc.). The VA will accept HUD form 92541 or refer to the VA for details. 

If Inspections to be made by HUD during construction, the appraisal request must include:

  • The construction exhibits required above, except for the certification regarding those exhibits. 
  • The certification directly above item 38 on VA Form 26-1805. 
  • The certification by the builder or lender that the construction exhibits submitted to VA, including any DUD-accepted change orders, are identical to those submitted to HUD. 
  • A copy of the final HUD inspection report countersigned by HUD or a HUD Direct Endorsement underwriter, or a letter from HUD that the property has been completed in accordance with the approved plans and specifications and acceptable change order, if any. This requirement will be made condition of the VA notice of value if not submitted with the appraisal request. 

If the final HUD inspection report stipulates that certain incomplete work, such as street improvements, will be completed according to requirements specified by HUD elsewhere, a copy of the documentation that states those requirements must be furnished. In that situation, there must also be a VA-approved escrow agreement and a subsequent VA or HUD re-inspection report or other acceptable evidence of satisfactory completion. The veteran cannot be charged the cost of that re-inspection. 

If there is a question about HUD consistent with VA in the interpretation and application of VA/HUD Minimum Property Requirements, the VA field station may impose a VA inspection, at an appropriate inspection stage, in addition to the HUD inspections. 

Manufactured Home Classified as Real Estate

Any case in which the foundation has not been fully completed and the manufactured home unit installed is considered to be "proposed or under construction." In those cases, each set of construction exhibits must include:

  • Specifications for the foundation and a plot plan as required for conventional site-built homes. 
  • In double-wide homes, a detail of the mating line pier, if applicable. 
  • A foundation plan showing the location and a cross-sectional detail of the supporting piers. In all cases, include drawings of the foundation anchorage details. 
  • A floor plan of the unit and exterior elevation drawings/photographs of the front and rear of the home, unless the unit is physically located on the site to be appraised or the appraiser has access to the unit on the dealer's lot. These may be provided in the manufacturer's advertising or technical installation manual. 
  • In States or localities that require the underside of the unit to be completely enclosed. details of the perimeter enclosure that comply with those requirements. 
  • Since site conditions vary considerably from location to location, any revision needed to information provided in the manufacturer's technical installation manual in order to comply with local requirements. 
  • Appropriate construction exhibits for any other on-site improvements, such as decks, enclosed patios, garages and carports, etc., to be financed with the loan proceeds. 
  • A certification signed and dated by a technically qualified and properly identified individual (such as builder, architect, engineer, etc.). Refer to the VA for details or the VA will accept HUD 92541, Builder's Certification of Plans, Specifications and Site, in lieu of this certification. 

Fees For Appraisals and Inspections

The maximum appraisal and inspection fees allowed by each VA field station is based on customary fees for similar services in that station’s jurisdiction. Regardless of the amount of the maximum fee, appraisers and inspectors must not charge veterans more than they charge other clients for similar services. 

The appraisal requester will pay the appraiser’s fee and the expense will be included in the claim under loan guaranty. 

If the borrower attempts to pay the full arrears after the appraisal is obtained, the holder must include the cost of the appraisal in its computation of the total amount delinquent. 

Veterans cannot be charged for any portion of a “master” appraisal fee. 

Total maximum “master” appraisal fee = (Fee per House Type x Number House Types x Number Appraisers Assigned) + (Fee per Lot x Number Lots) + (Fee per Option x Number Options).

Construction Inspection Fees 

The builder, sponsor, or lender will pay the inspection fees, which are not to exceed $100 per inspection unless otherwise specified by the VA field station. 

While the veteran can be charged for all regular inspections of an individual property, the veteran cannot be charged for re-inspections due to: 

  • The builder’s noncompliance with VA requirements. 
  • The builder’s failure to provide access to the property or have the work ready for inspection, or 
  • The inspector’s failure to arrive at the appointed time. 

If a property is located outside of the fee person’s normal business area, an additional fee may be charged only for that portion of travel beyond the normal business area and at a mileage rate not to exceed that allowed for federal employee travel. 

Re-considerations of value (rovs)

If the lender processing a ROV request provides the additional information directly to the fee appraiser in a format similar to the comparable sales grid on the URAR, the VA fee appraiser will be required to provide a response within 5 working days. This should be the preferred, though not required, format. 

Where information submitted in support of an ROV request requires the fee appraiser to review data that was not available at the time of the fee appraisers report, the appraiser will be allowed to charge a reasonable fee for this service. The Regional Loan Center (RLC) of Jurisdiction over the property should be consulted on questions of proper ROV fees. 

Wherever possible, ROVs, and other correspondence, should be submitted via e-mail with supporting documentation as PDF attachments. Such documents are easily forwarded to appropriate personnel and allow VA and the fee appraisers to receive and process information in the most timely and efficient manner. 

Notification of Point of Contact(s)

If the requester, on the appraisal request form (VAF 26-1805, Request for Determination of Reasonable Value), has provided specific Point of Contact (POC) information, VA fee appraisers are required to notify the listed POC when it appears that the appraised value will come in below the sales price of the subject property. The requestor may designate whomever they feel is most appropriate as the POC including the Realtor, Loan Officer/Originator, etc. 

If this information is not provided, the appraiser will be required to call the appraisal requestor shown on the appraisal request to make such notification. 

Note: The Appraisal System (TAS) allows appraisal requesters to contact VA via the Internet any time of the day or night to obtain VA assignment of a case number and fee appraiser (and construction inspector, if applicable).

The appraiser will not be at liberty to discuss the contents of the appraisal with the POC at this point beyond explaining that they are calling for whatever additional information the POC may be able to provide.  

Once the fee appraiser has notified the lender or POC, they will have 2 working days to provide additional information to the fee appraiser, in a format similar to the comparable sales grid on the URAR. Verification that the sale actually closed is also required. If pending sales contracts are submitted to support a time adjustment, they must be complete with all contract addendums attached. 

There should be a brief narrative attached that describes the similarities/differences between the pending sale and the subject property. 

After receipt of any additional information, the appraiser will complete the appraisal report indicating that this process was utilized. If the information provided to the appraiser does not result in an increase in value that meets or exceeds the sales price, the appraiser will report on an addendum the following information: Who provided the information, what information was provided, and why it did not change the opinion of value. 

In either situation, the appraiser will include a comment regarding the amount of time this process added to the overall appraisal delivery. VA and Lender Staff Appraisal Reviewers (SARs) will monitor this factor and determine if reasonable timeliness was adhered to. 

How Long Notice of Value is Valid

Existing or New Construction:  A notice of value for property appraised as existing or new construction is valid for six months. Rapidly fluctuating real estate market conditions may temporarily dictate the use of a shorter validity period. 

Proposed or Under Construction:  A notice of value for a property appraised as proposed or under construction is valid for 12 months. Rapidly fluctuating real estate market conditions may temporarily dictate the use of a shorter validity period. 

Veteran Under Contract:  If a veteran signs a purchase agreement during a notice of value’s validity period, that notice of value will remain valid until that transaction is either completed or terminated.

Extension of Validity Period

VA will extend the validity period only when it is determined that current market conditions make it likely that the original value estimate will remain valid through the extended period. Generally, extension requests will be sent to the VA office of jurisdiction, which will contact the fee appraiser involved, if appropriate, and issue an endorsement to the notice of value, if justified. 

Conversion of HUD Value Notices for VA use

Generally, HUD value notices cannot be converted for VA use, since VA is required by law to assign fee appraisers and HUD allows lenders to select appraisers.  

Exception: To eliminate duplicative efforts and unnecessary appraisal costs for veterans, VA staff will convert a HUD conditional commitment issued by either HUD staff or a Direct Endorsement lender to a VA Certificate of Reasonable Value (CRV) if all of the following requirements are met:

  • The appraiser is a VA fee panel member and not a staff employee of the lender. 
  • The property was appraised as an individual case (that is, not listed on a valid HUD “master” value determination). 
  • Did not already have a valid VA value determination on the date of the purchase agreement 
  • Was appraised for HUD purposes and the lender documents a legitimate need to change to VA financing after the appraisal was made. That is, the buyer changed from HUD to VA financing while under contract, or the property is being purchased with VA financing after a contract with a previous buyer requiring HUD financing fell through. 
  • The lender submits to the VA office of jurisdiction the lender’s written request for conversion, which includes a certification that identifies the property and addresses each of the above requirements. 
  • A completed VA Form 26-1805, Request for Determination of Reasonable Value, the HUD value notice and the original appraisal report, including photographs and all other addenda. 
  • VA will list applicable VA requirements and conditions on the CRV.

Inspection reports

Construction Inspections:  Properties appraised as “proposed or under construction” must be inspected by VA or HUD during construction. The purpose of the inspection(s) is to help ensure that the property is built according to the construction exhibits used in the appraisal, and that it meets VA Minimum Property Requirements for proposed construction. 

Only a final inspection is required if either the property is to be covered by a ten-year insured protection plan, or VA can rely on local building authority inspections in lieu of first and second stage VA inspections. 

Note: VA acceptance of only a final VA or HUD inspection during construction is a privilege available only to builders who routinely provide good quality construction. Builders who are required to obtain a full complement of inspections during construction will be notified by VA in writing. VA, not lenders, will monitor builder compliance with the restriction.

Construction Warranty: In every case processed as proposed or under construction, the builder must provide the veteran home buyer with a one-year VA builder’s warranty on VA Form 26-1859, Warranty of Completion of Construction.

No Inspector Available:  In areas where there is no qualified VA or HUD fee inspector, properties cannot be appraised until they qualify as "New construction" or "Existing construction" 

If only a final VA or HUD inspection is made during construction, a ten-year insured protection plan acceptable to HUD is also required (unless the builder provides evidence of local building authority inspections acceptable to VA in lieu of VA first and second stage inspections per Section 14.03). 

Lender Use of Inspection Reports

Considering the requirements to obtain VA loan guaranty, before the loan is closed, the lender should ensure that:

  • All VA value notice requirements regarding inspections are met. 
  • Any deviations and/or noncompliance items listed on the third-stage inspection report are resolved to VA’s satisfaction. 
  • Any appliances or floor coverings installed under Section 14.05 are the same as those described in Section 1 of the third-stage inspection report, and 
  • The third stage inspection report includes all of the information required for a final inspection. 

The Lender must retain all inspection-related material in their loan origination file.

Condo Requirements: Required Documentation Determined by VA fee appraiser.

PUD's and Condos:  The appraisal report must show the amount of the current monthly assessment. 

For condominiums, indicate which utilities are/are not included, and comment on the adequacy of the monthly assessment, based upon the appraiser's opinion of the adequacy of the project's budget and a comparison to competitive projects. 

If the assessment is considered inadequate, a "fair" or market" assessment must be recommended. 

Non-Warrantable Condos: Not applicable.

Occupancy Ratios:  Not applicable.

Modular Construction

In addition to the other requirements in this section, an appraisal request involving modular construction must include either  evidence of coverage by a HUD structural engineering bulletin, or a certification of approval by the State in which the unit is fabricated. This requirement will be made a condition of the VA value notice if not submitted with the appraisal request. 

Rural Property (Farm Residences)

Although VA does not make farm or other business loans, the law allows veterans to use their Loan Guaranty benefit to purchase a farm on which there is a farm residence.

The appraisal of properties with acreage should not present difficulties if a sufficient number of similar properties in the area were recently sold primarily for residential use. 

For VA purposes, the valuation must not include livestock, crops or farm equipment and supplies. 

Installed facilities (such as, well, septic tank, etc.) serving the dwelling will be considered part of the dwelling when in the opinion of the appraiser, such items contribute to the desirability and aspects of the property.  Buildings other than the dwelling will be valued on the basis of the use of the property for residential purposes only. 

Mixed use Properties: Not allowable.

Agricultural/Commercial zoning: Not allowable.

 

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