VA Loans – The Notice of Value Part 2


Deciphering the VA Lender’s Handbook Chapter 13 Part 6


We’re moving on with telling you everything you need to know about the Notice of Value. If you missed Part 1 and earlier articles also covering Chapter 13, we recommend you go back and get caught up. The first thing we’re going to talk about in this article is how Notices of Value (NOVs) get distributed and when you should expect to receive a copy depending on who prepared them. The second thing we’ll talk about is how long an NOV is valid and usable. This depends upon the situation in which the NOV is issued.

Notice of Value

First, for lenders who are part of LAPP, which means they’ve been approved to process their own appraisal reviews, the review is conducted by a Staff Appraisal Reviewer (SAR). You’ll be pleased to know that the SAR is responsible to get you the borrower a copy of the NOV and the appraisal report within 5 business days of when they receive the appraisal report from the appraiser. If there is a delay beyond that length of time, there must be documented, reasonable extenuating circumstances (such as the need to obtain additional information from the appraiser). Usually, if there is a case where the SAR needs more information from the appraiser, they’ll communicate that to your loan officer and your loan officer will communicate that to you. The SAR is also responsible for getting the NOV and the complete appraisal report contents to the local VA office either the same day as they send it to the veteran or on the last day of the month along with any other NOVs issued that month.


For appraisals reviewed by the VA, no timeline is provided by the Handbook as to how long it might take. However, the VA does promise to send a copy of the NOV directly to the borrower to make sure you receive it. They will also send a copy to the lender, so if you think you should have gotten one by now, you can check to see if your loan officer has received one yet. Once the NOV is issued, whether by the VA or by an SAR, it will only be valid for a certain period of time. This period of time depends on what the situation is with the veteran and the home being purchased.


For example, in most cases the home being purchased is either “existing” or “new” construction. To fall under one of those two classifications, it means the loan is for purchasing a house that is already completely built, and the NOV was requested as part of the loan approval process. In cases of existing and new construction, the NOV is generally valid for six months, but if real estate market conditions are rapidly fluctuating, then the validity period may be shortened. If the NOV is for a home being appraised as “proposed” or “under” construction, then the NOV is actually valid for up to 12 months to take into account the amount of time it will take to finish construction on the home. Usually you won’t run into that because most lenders won’t approve construction loans.


If the veteran signs a purchase agreement during the NOV’s validity period, then the validity period is extended until the veteran either purchases the home or the agreement is terminated. That isn’t the only way for a validity period to be extended, though it is both the simplest and the most common. The VA may also extend the validity period when they determine that current market conditions are calm enough that the original value estimate will remain valid for longer. This determination is done only by request, and those requests should be made by the lender. The lender will submit the extension request to the local VA office that has jurisdiction over where the property is located. The VA might contact the appraiser, if appropriate, and issue an extension to the validity period if it makes sense for the period to be extended. If not, the VA will reject the request and the original time frame will still apply.


Generally speaking, there aren’t a lot of scenarios where you as the borrower would want or need the validity period to be extended. If you think you might, talk with your lender to see what the best course of action is.


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