Charging Veteran for second appraisal

An appraisal request can be canceled before completion if the lender determines the borrower will not qualify or if other valid reasons arise. In such cases, the appraiser must be notified immediately. If the appraiser has already begun work on the assignment, they are permitted to charge a fee for the work performed prior to the notification. This partial fee is chargeable to the Veteran. To finalize the cancellation, the lender must email the Regional Loan Center with the case details and a confirmation that the earned portion of the appraisal fee will be paid.

Generally, once a Notice of Value (NOV) has been issued, it remains valid for six months. During this validity period, no duplicate appraisals may be requested for the same Veteran on the same property. This restriction ensures the integrity of the original valuation and prevents “appraisal shopping.” If a Veteran decides to change lenders during this period, the original lender is expected to transfer the case to the new lender upon written request. The new lender’s Staff Appraisal Reviewer (SAR) must then review the existing appraisal and issue a new NOV to the Veteran.

Under no circumstances are appraisers authorized to collect appraisal fees directly from Veterans. All appraisal fees, whether for an initial assessment or a justified second appraisal, must be paid by the requester who placed the order through the VA’s web-based systems. This safeguard prevents potential predatory practices and ensures that all fees are properly documented in the loan’s closing disclosure. Additionally, the maximum fees allowed by the VA are based on customary charges for similar services in the vicinity, and appraisers must not charge Veterans more than they charge other clients for similar work.

If a property is appraised but a natural disaster occurs before the loan closes, and there is evidence that the property value may have declined despite repairs, a new appraisal must be performed. In this specific circumstance, the Department of Veterans Affairs does not mandate who pays the fee. Instead, the payment for the appraiser’s fee for this second assessment is considered a contractual matter to be negotiated between the buyer and the seller. The lender must ensure the property has been restored to its pre-disaster condition or better before the loan can be guaranteed.

If a title limitation or condition is discovered prior to the loan closing that was not considered in the original appraisal, the lender must contact the appraiser to see if the property remains eligible security for a VA loan. If this condition is identified after the effective date of the initial appraisal, the appraiser may consider the necessary evaluation to be a new assignment. Consequently, an additional fee may be charged to the Veteran for this service. This ensures the appraiser is compensated for the additional work required to determine the impact of the newly found limitation on the property’s value.

If a sales contract is amended after the effective date of the initial appraisal but before the loan closes, the lender must determine if the changes affect the property’s value. If the changes are significant, the lender must forward the amended contract to the appraiser. Depending on the extent of these changes, the appraiser may deem the review a “new assignment” under Uniform Standards of Professional Appraisal Practice (USPAP) guidelines. In this specific scenario, the appraiser is entitled to an additional fee, which is chargeable to the Veteran, ranging up to the full cost of a new appraisal.

No. Once an initial appraisal has been requested, the VA does not authorize duplicate requests for the same transaction. If a lender inadvertently requests more than one appraisal for the same Veteran on the same property, the lender is required to immediately cancel the redundant order. If the lender fails to cancel the duplicate and multiple appraisals are completed, the lender is held responsible for the fees of all duplicate appraisals. The Veteran cannot be charged for these administrative errors, and the final NOV will be based on the first appraisal requested.

In cases where an appraisal was already completed and paid for by a previous prospective purchaser, but the sale was not completed, a second purchaser may apply for a loan on the same property. If the existing Notice of Value (NOV) is still within its validity period and the lender elects to use it, the lender may not charge the second purchaser an appraisal fee. This rule prevents redundant charges for a single valuation service. However, no duplicate appraisals may be requested for the same Veteran and property during the six-month validity period of an existing NOV.

The Veteran-borrower is strictly protected from being charged for any appraisal or second assessment if the request originates from the lender or the seller for the purposes of a reconsideration of value. In these instances, the financial responsibility for the additional appraisal must be borne by the requesting party, not the Veteran. This regulation ensures that the Veteran is not penalized financially for a valuation dispute they did not initiate. Furthermore, appraisers are not authorized to collect any appraisal fees directly from Veterans; all payments must be processed through the party that placed the order.

Yes, a Veteran-borrower is permitted to pay for a second appraisal if they are the party specifically requesting a Reconsideration of Value (ROV). This situation typically arises when the initial appraisal results in a “reasonable value” lower than the contract sales price. While the Veteran provides the written request for reconsideration to the Regional Loan Center (RLC), they may also elect to fund a new assessment to provide updated market data. It is important to note that Veterans are also protected from paying for appraisals requested by any parties to the transaction other than themselves or the lender.