The Department of Veterans Affairs (VA) provides guarantees to lenders for eligible borrowers to obtain better loan terms—such as lower interest rates or smaller down payments—when purchasing, constructing, or refinancing a home. VA typically pays lenders up to 25 percent of the outstanding mortgage balance if a borrower’s home is foreclosed upon. Home appraisals for VA-guaranteed loans are necessary to establish fair market value and to determine whether the property is safe, sound, and sanitary. Appraisers must be approved by VA.
