Security for Existing VA Loan

Property securing an existing VA loan is eligible for appraisal for the following purposes:

Refinancing:

Either

·   cash-out, which requires both an appraisal and a VA notice of value, or

·   interest rate reduction only, which requires neither an appraisal nor a notice of value.  However, if the new loan balance will exceed the original loan amount by 5% or more, the lender may wish to consider requesting an appraisal.

Partial release of security:

The request must be in writing and include any information that the VA office of jurisdiction considers necessary.  A formal appraisal is not required if there is sufficient information for VA staff to determine the reasonable value of the property being released and the value of the security remaining.

Foreclosure:

When the VA loan is in default.  A liquidation appraisal should be requested at the time the notice of sale is forwarded to VA, but no later than 30 days prior to the estimated or scheduled sale date.  The lender/holder/servicer is responsible for assisting the appraiser in gaining access to the interior of the property.

Reference: See Section 11.13 for more information about interior access.