VA loan requirements CRV

VA Loans

VA Loan Requirements: What Is a CRV?

VA loan requirements can be confusing, especially if you’re buying a home with a VA loan for the first time. During the process, you may encounter several terms that are unfamiliar to you. One such example is the term “CRV.” Below, we’ve explained what exactly this commonly used acronym means and why it’s important for VA borrowers.


What Is a CRV?

CRV stands for Certificate of Reasonable Value. It’s an official document that’s generated as part of the appraisal process and is required by VA loan guidelines. The purpose of a CRV is to ensure the purchase price on a property is aligned with the appraised value. In essence, a CRV protects you from paying more than what the property is truly worth.


Why Do I Need a CRV?

Since the VA guarantees a portion of VA loans, they want to minimize risk by validating the home’s value. The CRV confirms you aren’t borrowing more than what the property is worth if it had to be sold. This protects you as well as your lender.


What’s the Process?

When you apply for a VA loan, an appraiser will be assigned to assess the home and determine its value. The appraiser will conduct a detailed inspection and complete an appraisal report that outlines their findings as well as the home’s market value. This becomes the CRV which is then used to confirm whether the loan application process can move forward.


How Long Does It Take?

The CRV process typically takes 1-2 weeks for the appraisal to be completed once requested. This fits within standard VA loan timelines. Borrowers should be aware that delays could happen depending on the appraiser’s availability and other unforeseen factors.


Low Appraisals

A low appraisal can impact the CRV and VA loan process. If the appraisal shows the property value is less than the amount you wish to borrow, this means there would be a coverage gap. Since the purpose of the CRV is to demonstrate the value supports the loan, additional steps would need to be taken.

There are a few options if the appraisal is lower than expected:

  • The seller may agree to lower the price to match the appraised value. 
  • You could see if the seller is willing to make updates or repairs to the home. This may increase the property value. If you go this route, the home will most likely need to be appraised again.
  • More funds may be needed to cover the difference between the appraised value and the previously agreed-upon purchase price. In this case, the borrower can choose to contribute funds out of pocket.

Ultimately, the loan amount must be supported by the CRV’s appraised value. Any gap would prevent the borrower from being able to get a VA loan.


Ready for the Next Steps?

We hope this overview of CRVs helps explain what they are and why they are part of the VA loan process. Let us know if you have any other questions about VA loan requirements! Our team is here to help you navigate the homebuying process. Call today to get in touch.