A VA loan permits an eligible veteran to borrow up to 103.3% of the purchase price or the value of the home, whichever figure is lower. The VA uses state-licensed or state-certified appraisers to provide opinions of value for the homes on which it guarantees the mortgages. In order to complete a VA appraisal, you must be on the VA panel. Here’s an overview of how the VA appraisal panel operates.
VA appraisal panel vs. FHA appraisal roster
Most residential appraisers are familiar with the FHA appraiser roster. It is important to note that the VA appraisal panel works very differently from the FHA appraisal roster.
As one example, the FHA roster is open to all qualifying appraisers. If you meet the FHA roster requirements, all you have to do is apply, and you will be added to the FHA roster.
Conversely, the VA panel is only opened up when the VA Regional Loan Center (RLC) has a need for appraisers in certain geographic areas. For example, there might be a need for appraisers in one city, and the VA will open up the panel and accept appraiser applicants from that city. But if you are from another city where there is not a perceived need for appraisers, the VA will not add new appraisers to the panel from that city.
There is no fee to apply or maintain membership on the VA panel.
Are you a current or prospective VA panel appraiser? Enroll in our new CE course: Appraising for the VA.
The VA does not originate or underwrite individual loans, but the VA does select the appraiser who will complete the appraisal for each VA loan. It uses a rotation system to select appraisers to complete appraisals on VA loans in a certain geographic area.
For example, let’s say there are four VA panel appraisers in Anytown. They are:
John Q. Public
If a VA appraisal assignment becomes available in Anytown, it will go to Jane Doe because her name is at the top of the list. After she receives the assignment, her name rotates to the bottom of the list, and the list now looks like this:
John Q. Public
The next VA appraisal assignment in Anytown will go to John Smith, then his name will go to the bottom of the list, and so on. It’s a simple yet effective system, and it protects and maintains appraiser independence.
As noted previously, the VA differs significantly from the FHA when it comes to appraiser selection. For FHA, the lender (or the AMC working as an agent of the lender) is permitted to select the appraiser. For VA loans, the VA selects the appraiser, period. The originating lender has no input into who is selected to complete their appraisal.
Another difference is that the VA sets appraisal fees; these are maximum allowable fees which are based on geographic areas. The fee schedule is available on the website of the VA Regional Loan Center (RLC) that has jurisdiction. This is in direct contrast to FHA, which does not set or establish fees. An appraiser may negotiate with the lender or AMC to establish an FHA appraisal fee that is agreeable to all parties; not so with VA.
The maximum allowable VA appraisal fees are available on the VA’s website here: http://www.benefits.va.gov/HOMELOANS/appraiser_fee_schedule.asp. The VA Lenders Handbook, Pamphlet 26-7, provides some additional information about appraisal fees.
Want more info and insights? Check out our VA appraisal course: Appraising for the VA.