VA updates appraisal rules, adjusts fees in some regions

The U.S. Department of Veterans Affairs (VA) has updated several home loan appraisal requirements, removing and revising certain Minimum Property Requirements (MPRs), the agency announced Thursday.

The changes are now in effect and reflected in the revised VA Lenders Handbook. The agency said in a news release that the updates are intended to “reduce delays, cut outdated rules and help Veteran homebuyers move faster in a competitive housing market.”

VA is also adjusting appraisal fees in select regions to remain competitive and maintain a pool of experienced appraisers.

“The cost for the appraisal went up slightly — that’s not a dramatic impact,” said Major Singleton, a branch manager at Edge Home Finance. “On average, we are seeing an increase of about $50. I cover the cost of the appraisal for my veteran and active-duty buyers.”

Appraisal fees average about $700, but they can reach $950 in Hawaii or $1,250 in Alaska, VA loan officers told HousingWire.

Faster timelines

VA said the updates are designed to make their home loans more competitive, accessible and responsive to current market conditions by keeping appraisal timelines “moving in the right direction.”

As of May 31, the average VA appraisal takes about seven business days, according to the agency.

“You can negotiate now with the appraiser for a rush fee, which wasn’t in place before,” Singleton said. “However, that appraiser has the right to charge whatever they want for that.”

VA framed the move as part of a broader modernization initiative that includes enhanced digital tools to track appraisal orders from notification through completion, as well as improvements to analytics and communication throughout the process.

Revised requirements, clarifications

VA said the revisions focus on long-standing requirements that have contributed to appraisal delays or added costs for veteran buyers.

The agency has removed the full radon-gas requirement; revised standards for properties built before 1978 and for properties built in 1978 or later; streamlined guidance on detached improvements and Specially Adapted Housing Regional Loan Center jurisdiction; and updated guidance for non-vented heaters.

VA said its goal is to remove outdated requirements, clarify gray areas for appraisers and lenders, and better align its rules with current housing standards and federal directives.

“One of the biggest pushbacks for VA home loans for a long time has been that agents will say, ‘Oh, they’re harder because the appraisals are harder; they have more difficult appraisal criteria to meet minimum property requirements,’” said Gay Veale, chief experience officer at Vetted VA.

One example, according to Veale, involves homes built before 1978. Previously, VA required any chipped, peeling or flaking paint — interior or exterior — to be repainted before a loan could close, a requirement that some in the industry viewed as cosmetic.

“That’s a small example of them relaxing and being more realistic on those minimum property requirements,” Veale said.