Certificate Of Reasonable Value (CRV)

Definition of "Certificate of reasonable value (CRV)"

Written by

Nicola Wakelin

John R. Wood Christie’s International Real Estate

The Department of Veterans Affairs (VA), formerly known as Veterans Administration, issues the Certificate of Reasonable Value (CRV), an appraisal, determining the highest value and loan for a VA loan for a particular property. To understand what a Certificate of Reasonable Value means, we must first investigate the VA loan. 

The Veterans Affairs loan

A VA loan defines a mortgage loan enabling only US veterans, military personnel retired honorably, and remaining spouses to buy real estate with a small amount of downpayment for home loans or often without the obligation to provide this deposit at all. Besides, they enjoy other advantages, such as they don’t have to pay for private mortgage insurance and they will receive an excellent interest rate.

Who is entitled to a Veteran Affairs loan?

The VA loan facilitates US army, air service, and navy veterans to receive higher loans than any conventional financial institute would typically grant. In addition, regular citizens would require a good credit score. An outstanding credit score is not a fundamental standard to get a loan. Still, they expect applicants to have a credit score of at least 620.

Let’s suppose a veteran had bought a house using their VA loan. Then, they sold it and let the new buyer pay off the loan. If the property’s new owners settle the loan on the house, the veteran will fully be entitled to a new VA loan.

Thirdly, if a veteran rents their place, they can have a partial entitlement for a new VA loan at their disposal.

How does CRV work?

A veteran can now select a home and submit their application for a VA loan. Then, a real estate appraiser makes an official appraisal or home investigation to decide the property’s value. Practically speaking, a veteran obtains VA benefits which they can use to apply for an advantageous home loan. 

Home appraisals are essential to get a Certificate of Reasonable Value.

The Veterans Affairs orders home appraisals for their mortgage plan. After they complete the report, the department will hand out the certificate. Subsequently, the CRV is valid for six months on already built homes. For new constructions, it remains genuine for one year. The department upholds loans for eligible and qualified veterans. Particular relatives can also apply for this loan.

How much is the VA loan assessed?

Once the appraisal is submitted and evaluated, the VA approves and issues a Certificate of Reasonable Value. Note that the Department of Veterans Affairs expects that the chosen real estate’s worth equals or it’s less than the loan amount. In other words, it is below the amount of the needed mortgage.

The Certificate of Reasonable Value has to be an approved assessment. It sets a ceiling on the most substantial amount of a VA mortgage loan, meaning the highest sum of money the Veterans Affairs can lend to the applicant. The VA provides the loan for a house under a contract of sale and establishes the loan based on the given home’s value. 

Ask a local real estate agent about how to apply for a VA loan!