Appraisals and ValuationsMortgage

House passes bill to modernize VA appraisals

Companion bill awaits passage in the U.S. Senate

The U.S. House of Representatives this week passed a bill that streamlines the appraisal process for U.S. Department of Veterans Affairs mortgage loans.

With the passage of HR 7735, known as the “Improving access to the VA home loan benefit Act of 2022,” the VA is now permitting desktop appraisals and in some circumstances, waiving appraisals altogether. Critics have long complained VA appraisals had to be performed in-house, which has resulted in a costly and slow process for veterans and servicemembers.

The bill, introduced by Rep. Mike Bost of Illinois, should make veterans more competitive homebuyers, the Mortgage Bankers Association said.

“The bill will encourage important reforms to the agency’s requirements regarding when an appraisal is necessary, how appraisals are conducted, and who is eligible to conduct an appraisal,” said Bob Broeksmit, President and CEO of the MBA. “This legislation is an important first step towards broad modernization of VA appraisal processes and could make veterans’ home purchase offers more viable in today’s competitive housing market.”

A companion bill in the Senate, introduced by Sen. Dan Sullivan of Alaska, awaits passage.

“This bill will make sure that veterans are not unfairly disadvantaged during the home buying process and allow for a modern, digital appraisal process, which will get them into their new home faster,” Bost said in a statement.


Why is now the time for lenders to modernize their appraisal processes

HousingWire recently spoke with Erin Reen, Vice president of originations, valuations and operations at ServiceLink about approaching appraisal modernization in an innovative way while addressing logistical challenges along the way. 


In late July, the VA announced that it would accept desktop and exterior-only appraisals on some transactions. In a department memo, the VA said that the move was a response to “high demand for appraisal services and limited availability of appraisers in certain local market areas.”

However, the VA said that its “willingness to accept” alternative appraisals was not a substitute for an appraisers’ assessment of the appropriate scope of work, and whether a desktop or exterior-only appraisal could result in a “credible report.” The agency noted that there were caveats, including that the purchase price cannot exceed the Federal Housing Finance Agency‘s conforming loan limits, which are $970,800 for 2022. Lenders also have to be approved to participate in the VA’s Lender Appraisal Processing Program.

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