_This guest post was written by Jessi Hall, a former real estate broker and investment property manager. She currently writes about real estate, VA loans, and homeownership for ""Veterans United Home Loans"":http://www.veteransunited.com/. Readers can follow Hall on ""Google+"":https://plus.google.com/107346304281743879061/post and the ""Veterans United Realty"":http://www.veteransunited.com/realestate/author/jessi-hall/ blog._
Hot on the heels of a huge fiscal year (FY) 2012 and the issuing of its 20 millionth home loan, the ""Department of Veterans Affairs"":http://www.va.gov/ (VA) is working through a mandate to expand its VA Appraiser Fee Panel by 25 percent.
[IMAGE]""Right now we have just over 4,100 appraisers on our fee panel,"" said Gerald Kifer, supervisory appraiser of the VA in a ""WorkingRE.com"":http://workingre.com/workingre/ article. ""We are looking to appoint an estimated 1,400 additional appraisers to VA panels nationwide.""
The expansion comes at an appropriate time. VA loan volume has grown a staggering 305 percent from FY 2007 to FY 2012. In an era of tight fiscal lending, the VA loan program appears to have hit its stride. As the availability of ""zero down"" loan options has nearly evaporated, VA loans continue to offer 100 percent financing to qualifying military borrowers.
*Purposes of the VA Appraisal*
The VA appraisal serves two main functions. First, the VA appraiser ensures the home's value either meets or exceeds the VA loan value.
Secondly, the VA appraiser compares the subject property against the VA's list of Minimum Property Requirements (MPRs).
*Minimum Property Requirements*
MPRs serve as basic property benchmarks for the VA appraiser.
[COLUMN_BREAK]Those benchmarks help ensure homes purchased by veterans are ""safe, structurally sound and sanitary."" For example:
* The roof must be in good condition and have ""reasonable future utility""
* Electrical and plumbing systems must be in good repair
* Basements and crawl spaces must be dry
* Homes must be termite-free
* Lead-based paint must be treated according to VA guidelines
*VA Appraisal Challenges*
A summary of the VA appraiser's findings is sent to the buyer's lender. Each VA appraisal report pinpoints the ""indicated value by sales comparison approach,"" or ""appraisal value."" The report also contains a list of repairs needed to bring the home up to MPR standards.
Either of these elements could create problems for potential VA home buyers. Should the appraisal value fall short of the desired loan amount, prospective buyers must either pay the difference in cash, negotiate a lower price with the sellers, or walk away from the purchase.
Additionally, any repairs ordered by the VA appraiser must be completed by the seller before the loan can move forward. But a crumbling foundation or faulty electrical system could be more than a potential buyer is prepared to handle. In those cases, it's often better for military buyers to move on to a more suitable property.
*Cost and Timeline*
The VA establishes appraisal fees according to state of purchase and property type. Those costs currently range from $350-$700 for single-family homes.
The agency also sets timeliness guidelines for submission of VA appraisal reports. Timelines vary by region, but the VA generally stipulates a 10-business day turnaround. In rural areas, where VA appraisers are in short supply, VA appraisals can take longer to complete.
That's a problem Kifer aims to resolve. ""We typically have the greatest need for appraisers in rural areas because of a lack of appraisers in those areas,"" Kifer said.
A focus on hiring VA appraisers in rural areas should serve the agency well. Expanding VA appraisal capabilities in less-populated areas can only improve an already user-friendly loan process, and could push VA loan volume to an even greater high in FY 2013.