VA loan appraisals are valid for six months and automatically expire if the loan closes. A borrower cannot reuse the same appraisal once the loan has closed.
This is true for any transaction requiring a VA appraisal, including rare instances of obtaining a cash-out refinance before the original appraisal expires.
What Happens if my VA Appraisal Expires Before My Loan Closes?
While it is unlikely, if the VA appraisal expires before the loan closes, the lender must order a new appraisal for the loan to close.
Even less common, if the appraisal expires and the new appraisal comes in lower than the original, the VA is likely to reject the expired appraisal. VA appraisals are designed, like all appraisals, to give fair market value for a property based on the home, comparable homes in the market and the state of the housing market at the time of the appraisal.
When an appraisal expires, housing market conditions may have changed or fluctuated since the time of the original appraisal of the home - one reason why a new appraisal would be required once the old one expires.
The value of the home for appraisal purposes is not just based on the construction, condition and age of the home. It is also based on comparable properties in that particular housing market. That is one reason why appraisals exist in the first place.
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Challenging a Low VA Appraisal
In instances where the new appraisal comes in lower than the original, the homebuyer may challenge the appraisal – this is known as a Reconsideration of Value (ROV). With an ROV, anyone involved in the transaction (buyer, seller or agent) may challenge the appraisal value.
Anyone challenging a VA appraisal should know that the ROV process is more than filling out a form. Homebuyers should be prepared to:
- Review the appraisal report for inaccuracies, such as incorrect square footage
- Find documentation to support your ROV, such as floor plans, a competitive market analysis and up to three recent comparable home sales that weren’t included in the original appraisal
- Speak with your lender who will review the request and if it has merit, will either send to the appraiser or escalate it directly to the VA
Appraisals can be tough to predict, but having a thorough understanding of the VA appraisal process can help you be a better-prepared homebuyer. Learn more about the VA appraisal here.