The CRV (Certificate of Reasonable Value) is based on an appraiser's estimate of the value of the property to be purchased. Since the loan amount may not exceed the CRV, the first step in getting a VA home loan is usually to request an appraisal. Anyone (buyer, seller, real estate personnel or lender) can request a VA (Veteran's Administration) 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 are encouraged to carefully inspect the property themselves, or to hire a reputable inspection firm to inspect the property.

VA Home Loan Application Process

The application process for VA financing is no different from any other type of loan. In fact, the VA home loan 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 close the loan under VA's automatic procedure. Only about 10 percent of VA loan applications have to be submitted to an office for VA home loan approval before closing.

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