When applying for a VA loan—an exclusive benefit available to veterans, active service members, and some surviving spouses—one crucial step is the VA appraisal. This process not only determines the fair market value of the property but also ensures that the home meets the Department of Veterans Affairs’ (VA) strict safety and structural criteria, called Minimum Property Requirements (MPRs).
The VA appraisal differs from a standard appraisal in that it includes an additional review to protect the borrower by flagging any significant safety or structural issues that could affect habitability or value. The VA assigns an independent, VA-certified appraiser via a rotating system to provide impartiality. This means neither the buyer, seller, nor lender selects the appraiser.
Here’s how the VA appraisal process works:
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Order Initiation: After signing a purchase contract, the VA loan lender orders the appraisal through the VA’s online system. The borrower typically pays a standardized appraisal fee upfront.
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Appraiser Assignment: The VA assigns an independent appraiser who inspects the property.
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Property Inspection: The appraiser assesses the home’s condition, size, and features, taking photos and comparing it to similar homes recently sold in the area (known as comps).
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Report and Notice of Value (NOV): The appraiser issues a detailed report including the appraised market value and any required repairs to meet MPRs. The NOV is valid for six months.
The Minimum Property Requirements ensure the home is safe, sanitary, and structurally sound. Some common MPR standards include:
- Safe electrical wiring and heating systems
- Sound roof and foundation
- No active termite damage or hazardous materials like lead-based paint in peeling condition
- Adequate access to the property
If the property does not meet these standards, repairs must be completed before the VA loan can close.
It is important to understand that a VA appraisal is not a substitute for a home inspection. While the appraisal checks vital safety and value measures for the lender and VA protection, a home inspection provides a comprehensive review of the home’s condition for the buyer’s peace of mind. We recommend ordering a professional home inspection alongside the VA appraisal.
If the appraisal value is lower than the agreed purchase price, buyers can negotiate with the seller to reduce the price, pay the difference in cash, or request a reconsideration of value (ROV) from the VA. An appraisal contingency in the purchase contract typically allows buyers to back out and recover their earnest money if needed.
For further information on VA loans, you can visit our VA Loan glossary entry. To understand the importance of a home inspection when buying a property, see our article on Home Inspection.
Additional credible sources include the U.S. Department of Veterans Affairs official page on VA appraisals and the Consumer Financial Protection Bureau’s guide on Home Appraisals.
