e. Procedures

Submit a statement describing the alterations, improvements, or repairs made or to be made with the prior approval application (or loan closing package, if closed automatically).  In addition, report the amount outstanding on the existing loan as of the date of closing of the supplemental loan in the loan closing package.

If the cost of the repairs, alterations, or improvements exceeds $3,500:

A [ ] NOV and compliance inspections are required.

If the cost of the repairs, alterations, or improvements does not exceed $3,500

A [ ] NOV and compliance inspections are not required.  Instead, a statement of reasonable value may be submitted.  The statement must be completed and signed by a VA-designated appraiser.  A VA-designated appraiser is an individual nominated by the lender (who may be an officer, trustee, or employee of the lender or its agent) who has been approved by the local VA office.  The statement must specify

·   the work done or to be done

·   the purchase price or cost of the work and material, and

·   that the purchase price or cost does not exceed the reasonable value.

In lieu of VA compliance inspections, the lender must submit a certification as follows:

“The undersigned lender certifies to the Department of Veterans Affairs that the property as repaired, altered, or improved has been inspected by a qualified individual designated by the undersigned, and based on the inspection report, the undersigned has determined that the repairs, alterations, or improvements financed with the proceeds of the loan described in the attached VA Form 26-1820 appear to have been completed in substantial conformance with related contracts.”