The Veterans Benefits Administration has updated its “Valuation Practices during COVID-19.” The Circular outlines the adjusted rules of the VA’s appraisal process in order to protect appraisers, Veterans, and industry stakeholders as they continue to work toward delivering VA home loan benefits to our nation’s servicemembers and veterans during COVID-19.
The updated guidelines are effective for all loans on or after the date of the announcement: April 10, 2020, and will continue until further notice.
The action taken will allow for EXTERIOR-ONLY appraisals on properties up to $1,148,475 (one and a half times the maximum 2020 Freddie Mac Conforming Loan Limit); a full exterior and interior appraisal will be required if the value is larger. Fees, however, will remain the same as an interior/exterior (standard) appraisal.
To summarize the intricacies of this update, there are four main enhanced assignment conditions for the VA’s appraiser that go along with the exterior-only appraisals (more details of each condition can be found in the linked Circular):
- The appraiser will review the full exterior of the property and provide photos of all sides of the property with detailed notes of the exterior and any visible MPRs.
- A measurement of the footprint of the home should be provided if accessible. This is not to determine the gross living area (GLA) but for the appraiser to reconcile with public records.
- The appraiser will conduct a detailed interview over the phone with the occupant, Veteran, or real estate professional regarding the property.
- The appraiser may utilize any and all photos available from MLS, provided by the occupant, Veteran, or real estate professional.
In addition to the appraisal update, Reconsideration of Value (ROV) requests will be limited to $10K and will only be allowed for VA purchases. See point #3 in this post for ROV description.