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Lender Appraisal Processing Program

The Lender Appraisal Program (LAPP) is a program available to lenders that have met specific requirements. A lender must be approved by the Central Office. By using an LAPP lender, a VA assigned appraiser can actually close the applicant's loan, allowing for the loan process to be expedited.

The program requires Staff Appraisal Reviewers (SARS) for the review of different property types.

Staff Appraisal Reviewer

The SAR is the person that will receive an appraisal for review. When reviewing an appraisal, the SAR will make different assessments:

• Is the appraisal complete?
• Does the appraisal conform to industry practices and/or other VA requirements?
• Is the property value reasonable?

After assessing if the appraisal meets the appropriate requirements, the SAR will send written notice to the buyer on conditions and requirements for the loan.

SAR Qualifications

It is important that the SAR meet specific requirements. An SAR must be a full time, salaried employee of the lender. He or she will have 3 or more years of experience in appraisal reviewing. He or she will apply to become a SAR, and if approved, complete specific training for this position.

The interested candidate will need to apply by completing an LAPP application. The application will then be submitted to the local VA Regional Office. There is also an application fee. Further details can be read in Chapter 15 of the VA Lender's Handbook.

Property Types

There are four property types that are considered and reviewed by an SAR:

• Proposed Construction
• Under Construction
• New Construction
• Existing Construction

Proposed Construction

Proposed construction is construction that has not yet commenced. There are standards that must be met for this to be considered proposed construction:

• Three Compliance Inspections - The inspections are required There are two exceptions. The first exception is if the property is already covered by a 10 year approved and insurance backed plan. The other exception is if the property is located in a community approved by HUD for substitution of local inspections for the first and second inspection.
• Plans and Specifications - Two sets of plans and specifications must be provided by the lender. The first set is for the appraiser. The second set is for the compliance inspector.

Under Construction

After the first inspection phase has been completed, property is considered under construction. This classification also applies to those properties that had previously met the exception standards under the previously mentioned three compliance inspection section.

New Construction

Once construction is complete or mostly complete (with the exception of customer preferences) and is within a 12-month period, the property is classified as new construction.

Existing Construction

After property is in the completion stage for over a year, and/or has been occupied by the owner, the property is classified as existing construction.

See a related article: Purchase Agreement Information

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