VA Appraisal and Minimum Property Requirements
What the VA appraiser looks at, and what you can do if the value or the condition becomes a problem.
Every VA purchase loan needs an appraisal by a VA-assigned appraiser. It does two jobs: it sets the home's reasonable value, which caps the loan, and it checks that the home meets the VA's minimum property requirements, known as MPRs. Knowing what the appraiser looks for helps you avoid surprises, especially with older homes.
What the minimum property requirements are about
The VA's standard is that the home must be safe, structurally sound and sanitary. In practice the appraiser looks for things such as:
- A roof that keeps water out and has reasonable remaining life.
- A working heating system that can keep the living areas at a healthy temperature.
- Safe drinking water and a working sewage system.
- Electrical and plumbing systems that work and are not hazardous.
- No peeling or chipping paint on homes built before 1978, because of lead paint risk.
- Year-round access from a public or private road.
- No signs of active wood-destroying insect damage. In many areas a termite inspection is required.
The VA appraisal is not a home inspection. It does not test every system in detail, so a separate inspection is still worth paying for.
How the process works
- Your lender orders the appraisal through the VA's system, which assigns an appraiser from its panel.
- The appraiser visits the home and compares it with recent sales.
- The lender or the VA issues a Notice of Value (NOV) with the reasonable value and any required repairs.
- Required repairs must be completed and confirmed before closing, unless the lender allows an exception, for example for weather-related items.
If the value is likely to come in low: Tidewater
Under the VA's Tidewater process, if the appraiser expects the value to come in below the contract price, they must tell the point of contact, usually the lender, before finishing the report. That gives your side a short window, generally two business days, to send in additional sales data that supports the price.
If the final value is still low
- Ask for a reconsideration of value (ROV) through your lender, with comparable sales the appraiser may have missed.
- Renegotiate the price with the seller.
- Pay the difference in cash, since the loan cannot exceed the reasonable value.
- Walk away. VA purchase contracts include an amendment, often called the VA escape clause, that lets you cancel without losing your earnest money if the price is above the reasonable value.
Tips before you make an offer
- On older homes, look at the roof, the paint and the heating system before you write the offer.
- Ask your agent to include who pays for VA-required repairs in the contract.
- Avoid properties that need major work unless you plan a renovation loan, since a standard VA loan expects a home that can be lived in at closing.
Frequently asked questions
Who pays for the VA appraisal?
It is usually paid by the buyer as part of closing costs, though the seller can agree to pay it. The fee is set by the VA for each area.
Can a VA appraisal be transferred to another lender?
A VA Notice of Value is tied to the property and the VA case, and can generally be used by another VA lender. Ask the new lender.
Is the VA appraisal stricter than FHA or conventional?
It has its own property requirements. Many homes pass easily, but older homes needing repairs can face more conditions than with a conventional loan.
Does the VA appraisal replace a home inspection?
No. The appraisal sets the value and checks the minimum property requirements; it is not a detailed inspection of the home's condition. The VA encourages buyers to get their own home inspection.
What if the seller will not make the required repairs?
Repairs listed on the Notice of Value have to be completed before the loan can close, whoever pays for them. You can negotiate with the seller, ask whether you may pay for them yourself, or use the contract terms to walk away.
Sources
This page is educational and is not legal, tax or financial advice. Rules and rates can change, so confirm the details with the VA and your lender.