VA Guidelines

Appraisal Form Requirements

- Total loan amounts up to and including $417,000 ($625,500 for AK and HI): Form 1004 - Total loan amount >= $417,001 ($625,501 for AK and HI): Form 1004
- A 1004MC (Market Conditions Addendum) is required on ALL loan files.
- All 1004 appraisal reports must include:

  • Interior photographs, which at a minimum show: the kitchen, all bathrooms, main living area, examples of physical deterioration (if present) and examples of recent updates such as restoration, remodeling and renovation (if present).

  • Clear, illustrative, original photographs showing the front, rear view (preferably including a different side view in each photograph) and a street scene of the subject property and the front of each comparable sale.

  • The subject and all comparables must be appropriately identified.

  • Include photographs of any improvement, site feature or view affecting value.

  • Acceptable photographs include clear, illustrative images. Copies of photographs from a multiple listing service are acceptable only

    with an explanation why original photos are not available (i.e. gated communities where access may require trespass to photograph, etc.).

    - VA IRRRLs: A 2055 Exterior Appraisal is required (including a 1004MC).

    Appraisal Review

    - LARAs are not required but may be ordered at the PCM Underwriter's discretion

    Carbon Monoxide Detectors:

    - If the property state requires Carbon Monoxide Detectors in the subject property and the detectors are missing or nonfunctional: As-Is property:

    - A 1004D (provided by the appraiser) OR a Lender Certification (provided by a PCM Employee) along with supporting photo(s) must be provided to verify that the detectors have been installed and/or are currently functioning on every floor of the property.

    Subject-To property:
    - A 1004D (provided by the appraiser) must be provided to verify that the detectors have been installed and/or are currently

    functioning on every floor of the property.
    - Carbon Monoxide detectors should never be listed on the appraisal as a MPR (and if so, appraiser must provide corrected appraisal).

    Flipping Policy

    - No current PCM restrictions (red flags for property flipping & rapid appreciation must still be addressed by the PCM Underwriter)

    Inspection Requirements

    - Appraisers must look for and report evidence of wood destroying insect infestation, fungus growth and dry rot in addition to any other VA requirement for an inspection of the property by a wood destroying insect inspector. If the appraisal indicates evidence of wood destroying insect infestation, inspection requirements as detailed in the property eligibility section of the guidelines must be met.

    Minimum Property Requirements

    - VA Minimum Property Requirements (MPRs) provide general acceptability criteria for properties that will become the security for VA- guaranteed loans. MPRs provide a basis for determining that the property is safe, structurally sound, sanitary, and meets the standards considered acceptable in a permanent home in its locality.

    Notice of Value (NOV)

  • -  The VA Underwriter (SAR) must distribute the appraisal and Notice of Value to the borrower.

  • -  The NOV for the property appraised is valid for six months.

  • -  The VA Underwriter (SAR) must issue the NOV at the appraised value reflected in the appraisal report and may not issue a NOV that

    deviates from the fee appraiser's value estimate.

    Re-Inspection and Review Requirements for Disaster Areas

    - Pinnacle Capital Mortgage will implement additional property re-inspection and review requirements on loans secured by properties located in disaster areas. It is important to note that not all disaster areas as determined by PCM are qualified as FEMA disaster declarations. Please refer to the following procedures on loans that are located in PCM-determined disaster areas.

Any Appraisal Performed on or Before Incident Period End Date for Disaster: Property must be re-inspected by the original appraiser or acceptable inspection source (such as, a nationally recognized field company or local professional licensed inspector). The appraiser/property inspector must provide the following commentary/ evidence: Property is free from damage and the disaster had no affect on value or marketability.

- If the re-inspection indicates damage, the extent of the damage must be addressed. Completion of repairs is required as evidenced by Form 1004D, Appraisal Update and/or Completion Report, with photos, prior to funding the loan.