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Introduction to Certificate of Reasonable Value for VA Loan
If you are a veteran or active service member who is looking to buy a home, a VA loan is the best bet for you.
To get a VA loan approved you might need some additional documents that are required according to VA loan guidelines.
One of those documents is a certificate of reasonable value. In this post, we will learn what is a certificate of reasonable value (CRV) in detail.
What is a Certificate of Reasonable Value?
If you are a veteran who is looking for a VA loan, you would need a certificate of reasonable value.
This certificate of reasonable value helps in deciding and understanding the actual worth of the property to get approval for a VA loan.
The US Department of Veteran Affairs has set the upper limit for VA Loans. Furthermore, to comprehend and assess this property value, a Certificate of Reasonable Value is particularly required.
With the help of this Certificate of Reasonable Value (CRV) for real estate, the veteran who is applying would be eligible to get a VA loan to buy the house.
The Certificate of Reasonable Value (CRV) for real estate determines the maximum value of the property which you are buying and also helps to finalize the loan amount that needs to be provided to the borrower.
The property evaluation is done only by the US Department of Veterans Affairs.
How to Obtain a Certificate of Reasonable Value?
In a nutshell, VA loans are only available for veterans or US navy, air force, and army active service members.
The VA loans come with many benefits one of which is the no down payment requirement. Hence it is imperative to have a Certificate of Reasonable Value (CRV) along with a certificate of eligibility.
Once you have finalized the property that you want to buy, a borrower needs to intimate the US Department of Veterans Affairs in form of a letter using a specific template to issue a Certificate of Reasonable Value (CRV) for real estate.
Once the letter is received by the US Department of Veterans Affairs they will review the application and issue a Certificate of Reasonable Value (CRV).
It is important for the property value to be equal to or below the limit set for by the VA loan guidelines.
The VA will order the appraisals to determine the value of the property which is one of the guidelines for VA loans. Only once the appraisal report is sent, the department will issue the Certificate of Reasonable Value (CRV).
The validity of a Certificate of Reasonable Value is six months for old constructed properties and one year for newly constructed homes.
Conclusion
When a veteran applies for a VA loan he would have to initially get a certificate of eligibility from the US Department of Veterans Affairs.
Once the COE is submitted to the lender, the appraisal of the property is ordered and the VA appraiser will provide the Certificate of Reasonable Value to the lender.
This certificate holds a lot of significance as it helps the lender determine how much would be the home value and the loan amount that a borrower is eligible for.
