What does a Certificate of Reasonable Value (CRV) represent?

A Certificate of Reasonable Value (CRV) is an important document that represents the market value of a property as determined by a VA appraisal. This appraisal process is specifically designed for properties being purchased with a VA loan, ensuring that the property is worth the amount being financed. The CRV establishes a benchmark for the maximum loan amount that can be guaranteed by the VA to the lender for that specific property.

In this context, it is crucial to differentiate the CRV from other metrics like purchase price, mortgage amount, or a buyer's creditworthiness. The purchase price reflects what the buyer agrees to pay for the property, which may be at, above, or below the appraised value stated in the CRV. The mortgage amount pertains to the funds borrowed by the buyer to finance the property, which may not directly correlate with the appraised value. Lastly, a buyer’s creditworthiness pertains to their ability to repay a loan based on their financial history, not the value of the property itself, which is encapsulated in the CRV.