VA Loan Information
How To Get A VA Loan
VA Appraisal - Certificate of Reasonable Value
The CRV (certificate of reasonable value) is based on an appraiser's estimate
of the value of the property to be purchased. Because the loan amount may not
exceed the CRV, the first step in getting a VA loan is usually to request
an appraisal. Anyone (buyer, seller, real estate personnel or lender) can request
a VA appraisal by completing VA Form 26-1805, Request for Determination of
Reasonable Value. After completing the form, it can either be mailed to the
Loan Guaranty Division at the nearest VA office for processing or an appraisal
can be requested by telephoning the Loan Guaranty Division for assignment of an
appraiser. The local VA office may be contacted for information concerning its
assignment procedures. The appraiser will send a bill for his or her services
to the requester according to a fee schedule approved by VA. To simplify things,
VA and HUD/FHA (Department of Housing and Urban Development/Federal Housing
Administration) use the same appraisal forms. Also, if the property was
recently appraised under the HUD procedure, under certain limited circumstances,
the HUD conditional commitment can be converted to a VA CRV. The local VA office
can explain how this is done.
It is important to recognize that while the VA appraisal estimates the value of
the property, it is not an inspection and does not guarantee that the house is
free of defects. Homebuyers should be encouraged to carefully inspect the property
themselves, or to hire a reputable inspection firm to help in this area. VA
guarantees the loan, not the condition of the property.
Application
The application process for VA financing is no different from any other type of
loan. In fact, the VA application form is the same as that used for HUD/FHA and
conventional loans. The mortgage lender verifies the applicant's income and
assets, and obtains a credit report to see that other obligations are being
paid on time. If all is well and the appraised value of the property is enough
to cover the loan needed, the lender, in most instances, can then close the
loan under VA's automatic procedure. Only about 10 percent of VA loan applications
have to be submitted to a VA office for approval before closing.
Requirements For VA Loan Approval
To obtain a VA loan, the law requires that:
- The applicant must be an eligible veteran who has available entitlement.
- The loan must be for an eligible purpose.
- The veteran must occupy or intend to occupy the property as a home within a reasonable period of time after closing the loan.
- The veteran must be a satisfactory credit risk.
- The income of the veteran and spouse, if any, must be shown to be stable and sufficient to meet the mortgage payments, cover the costs of owning a home, take care of other obligations and expenses, and have enough left over for family support.
- An experienced mortgage lender will be able to discuss specific income and other qualifying requirements.
