When you need to borrow money to purchase a home, the lender will seek an independent evaluation of the property’s value — also called an appraisal. This is required for all types of home loans, including VA loans.
But the VA appraisal process is often different from what’s involved with appraisals for other types of mortgage financing.
Here’s how the VA appraisal works, how it differs from conventional, FHA, and USDA appraisals, how a VA appraiser is selected, what to expect during the process, and how the findings can affect you.
The VA Appraisal Explained
It’s important to know the fair market value of a property before you buy it. Mortgage lenders require an appraisal before lending money for a home loan: since the home serves as collateral, they want to ensure you don’t overborrow.
An appraisal is an impartial evaluation of a property’s worth conducted by a licensed professional. The appraiser focuses on valuation factors including the size, bedroom count, and features of the home (such as views or a swimming pool), as well as the property’s overall marketability. They also review comparable homes that sold in the neighborhood over the prior six months and compare those to the subject property.
This evaluation results in an estimated value that ideally meets or exceeds the sale price. If the appraisal comes in below the purchase price and the borrower is targeting a zero-down VA loan, they will need to come up with additional funds to cover the difference at closing.
The lender also uses the appraisal to help determine the interest rate, required down payment, and whether the loan will be approved.
It’s Not the Same as a Home Inspection
A home inspection is conducted by a home inspector — typically someone with general contractor experience — and is a detailed evaluation covering everything from the foundation to the roof, including electrical and plumbing systems. An appraiser does not go into that level of detail.
Many buyers opt to have a home professionally inspected to check for flaws, defects, and hidden problems. A home inspection is not required by the lender, but many buyers include a home inspection contingency in the purchase contract to protect their interests.
How the VA Appraisal Is Different
VA appraisals include minimum property requirements (MPRs) that are more stringent than those for other loan types. These MPRs are designed to protect VA borrowers by ensuring they’re purchasing properties in good, livable condition that won’t become an undue financial burden.
MPRs require the appraiser to evaluate the roof, confirm the basement is dry, verify that basic systems like electrical and plumbing are in working order, and assess the overall condition of the home. Conventional and FHA appraisals do not have these same requirements and don’t typically require an inspection of the attic or basement.
VA loans also require clearance of a pest inspection completed by a certified pest remediation company — something not required on most other loan types. This inspection must clear all Section 1 items, which include live organisms such as mold, mildew, dry rot, beetles, termites, and rodents. All Section 1 issues must be resolved before closing.
This frequently becomes a point of negotiation: sellers are often reluctant to pay for remediation on a home they’re selling, while buyers are understandably hesitant to pay for repairs on a home they don’t yet own. As a result, many VA buyers focus their search on homes that already have Section 1 clearance — which can be challenging in markets with older housing stock.
Additionally, as Jason Gelios, a Realtor who specializes in representing veterans, notes: “A property to be purchased with a VA loan cannot have flaking paint that may contain lead.”
Other Ways a VA Appraisal Is Different
The VA appraisal process can also take longer. A VA appraiser is entitled to 10 business days to conduct their analysis and submit their report to the lender.
“For other mortgage loans, it’s possible to get this completed more quickly,” notes Bethany Stalder, a Realtor and owner of Fidelis Property Group. “For example, you can order a rush appraisal for a conventional loan, but the 10 business days can’t be accelerated or waived for a VA appraisal.”
VA appraisals also tend to cost more than FHA or conventional appraisals. They can only be facilitated through the VA’s portal and completed by appraisers certified by the U.S. Department of Veterans Affairs. While the fee is higher, the full amount goes directly to the VA appraiser — which creates a financial incentive to prioritize these orders. In practice, this has often resulted in faster turnaround times than borrowers might expect.
VA loan borrowers are also not permitted to waive their appraisal contingency. As Stalder explains: “With conventional loans, you could elect to waive an appraisal contingency in your offer to make it more attractive to the seller — meaning that if the sales price is determined to be higher than the appraised value, you have no right to renegotiate later. VA borrowers aren’t allowed to waive this contingency.” If the home appraises below the sales price on a conventional loan with a waived contingency, the buyer must pay the difference in cash at settlement.
How the VA Appraiser Is Chosen
As with other loan types, borrowers do not choose who appraises the property. The lender orders the appraisal, and the borrower pays for it as part of the loan financing.
Following the financial crisis of 2008, a firewall was put in place between lenders and appraisers. As Stalder explains: “When the buyer and lender order the appraisal, that order gets sent to a panel of qualified appraisers and neither the buyer nor the lender has any direct influence over which one accepts the job. This is meant to ensure that the appraisal is truly independent and home values are not artificially inflated based on a buyer or lender’s influence on the appraiser.”
What to Expect During a VA Appraisal
The appraisal process typically begins shortly after signed disclosures are received. It’s in the lender’s interest to initiate it as soon as possible to allow time to address any issues that arise.
The appraiser will work with the listing agent to schedule an in-person visit, which usually takes 30 to 60 minutes depending on the property’s size. During the visit, the VA appraiser must complete several key tasks:
- Visit the home in person and take photos to confirm the visit.
- Verify the size of the home by taking measurements. As Stalder notes: “Sometimes, the physical condition of a property won’t match the listing or the tax record, so it’s important for the appraiser to validate the home that’s actually going to convey to the buyer.”
- Evaluate MPR requirements per the VA handbook — including a head-and-shoulders inspection of the attic and crawlspace for leaks, damage, and defects; measurement of distances between well and septic systems to ensure potable water is not contaminated; and testing of major systems including HVAC, plumbing, and electrical, along with a sample of fixtures.
- Look for recent updates that could increase the property’s value.
- Review comparable sales. As Gelios explains: “This expert will gather information on comparable properties that have sold in the last 90 days in that area and which are similar in amenities and size. They will assess various data on the property for sale, too.”
- Submit a written appraisal report to the lender within 10 business days of accepting the order.
Once you’ve signed a contract with the seller, you typically receive your appraisal results within 15 to 21 days, per Stalder.
How the VA Appraisal Can Affect You
Once you receive the appraisal report, review it carefully — especially if the appraised value doesn’t align with the purchase price. If you’re planning to close with 100% financing and the appraisal comes in low, you’ll need to pay the difference at closing.
MPR findings can also create additional requirements that will need to be renegotiated with the seller. While this can complicate the transaction, it’s worth remembering that these requirements exist to protect you from making a purchase you may regret.
According to the Federal Deposit Insurance Corporation (FDIC), there may be instances where an appraisal contains errors, omits significant information, or includes potentially biased details that could affect the final valuation. That’s why it’s essential to review the report thoroughly.
If you spot inaccuracies, you can request a reassessment from the lender. When doing so, gather factual documentation to support your case, which may include:
- A plat map to address lot size discrepancies
- Measurements of the home to verify total square footage
- Photos of interior and exterior updates or improvements, along with receipts
- A list of comparable homes nearby that sold within the past 12 months, with sale prices, to provide more accurate benchmarks
If you’re a veteran or active service member exploring your home financing options, Refi.com can help you find the right loan — reach out to learn about current rates and eligibility requirements, including our minimum credit score requirements for the programs we offer.
