What does the certificate of reasonable value (CRV) indicate?

The certificate of reasonable value (CRV) is an important document specifically associated with properties financed through a VA loan. It is issued by the Department of Veterans Affairs and reflects the appraised value of the property based on a VA appraisal. This appraisal evaluates the market value of the property to determine the maximum loan amount that can be guaranteed by the VA for eligible veterans.

Understanding the function of the CRV is crucial because it directly impacts the financing process for veterans seeking to purchase homes. The appraised value, as indicated by the CRV, ensures that veterans do not overpay for the property and provides lenders with a basis for the loan-to-value ratio.

In terms of context, the other options address concerns that are relevant but not specifically linked to the purpose of a CRV. For example, the marketing potential of a property and rental yield pertain more to market analysis and investment considerations rather than direct financing or loan appraisal, while the insurance value of the property pertains to risk assessment for insurance purposes, which is unrelated to the value determined through a CRV.