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

A Certificate of Reasonable Value (CRV) plays a crucial role in real estate transactions, particularly in the context of VA loans. It specifically provides the current market value of a property as determined by a VA-approved appraiser. This valuation serves as a basis for the maximum loan amount that the VA will guarantee, ensuring that the buyer does not overpay for the property based on its fair market value.

By establishing a property’s market value, the CRV protects both the lender and the borrower, helping to prevent situations where the loan amount exceeds the actual worth of the home. This valuation is important in the context of real estate transactions because it influences the decision-making process for both lenders who need to ensure that their investment is sound and borrowers who need to understand the value of their potential purchase.

The other choices do not align with the purpose of a CRV. A detailed loan agreement pertains to the terms and conditions of borrowing, while the verification of loan repayment capability focuses on the borrower's financial situation. Information on mortgage insurance is unrelated to property valuation. Thus, the CRV is specifically centered around establishing the current market value of a property.