How the VA Appraisal Really Works (and Why It’s Not a Deal Killer)

Let’s be real...
The VA appraisal has a bad reputation. People hear “VA loan” and immediately think it’s going to be a nightmare to get the home to pass but here’s the truth: VA appraisals are not stricter. They’re just different. And once you understand what they actually look for, it becomes way less intimidating.

What the VA Appraisal Does (and Doesn’t) Do

✔ It determines the fair market value of the property the same way any other loan type does

✔ It ensures the home meets minimum property requirements (MPRs) 

✔ It protects the buyer from overpaying or inheriting major issues

And surprise... all other loan types do this too!

What it doesn’t do:

• It doesn’t nitpick cosmetic stuff
• It doesn’t require the home to be perfect
• It doesn’t automatically kill deals or bring values in low

The VA Minimum Property Requirements (MPRs)The VA just wants the home to be:

• Safe (no exposed wiring, trip hazards, broken windows)
• Structurally sound (no major roof or foundation issues)
• Sanitary (functional plumbing, heating, clean water source)

Things that can raise flags:

• Peeling paint (for homes built before 1978)
• Missing appliances that are considered “real property” in the area
• Safety concerns like missing handrails or broken stairs

If something comes up, it doesn’t mean the loan is denied it means it needs to be addressed. That could be a repair, a seller credit, or sometimes just a clarification.

How VA Appraisals Compare to FHA and Conventional

• FHA actually has stricter property standards than VA in many areas especially when it comes to cosmetic or deferred maintenance issues.
• Conventional is a bit more flexible on the surface, but underwriting can still flag major safety or structural concerns, especially if the appraiser calls them out.
• The biggest advantage for VA buyers?
  You get two opportunities to challenge the value if the appraisal comes in low.

Here’s how that works:

Tidewater Initiative (Step One)

If the VA appraiser doesn’t initially find comps to support the purchase price, they’ll invoke Tidewater which is a process that allows the buyer (and their agent or lender) to submit their own comparable sales before the appraisal is finalized.

• You usually get 2–3 business days to respond
• It’s your chance to present comps the appraiser may have missed
• If accepted, the appraiser can use those to justify a higher value before locking in the report

It’s like a pre-emptive appeal before anything is official.

Reconsideration of Value (ROV – Step Two)

If Tidewater doesn’t get the result you need, there’s still a backup plan: a formal Reconsideration of Value.

• You submit a full ROV package with specific comps and justification
• The VA reviews it, not the original appraiser
• If approved, the VA can override the appraised value in favor of the buyer

It’s not a guaranteed win, but it’s a rare and powerful advantage VA buyers have that conventional and FHA loans do not offer.

What Happens If the Appraisal Comes in Low?

You’ve got options:

• Renegotiate the purchase price
• Submit a Reconsideration of Value with comps
• Bring the difference in cash (if that’s even necessary)
• Walk away with your earnest money protected

You’re not stuck and you’re not powerless.

How I Prepare My Buyers

• I explain the appraisal process up front so there are no surprises
• I work closely with the agent to avoid homes that are likely to cause problems
• I stay in contact with the appraiser (when allowed) and review the report with you if anything pops up

The VA appraisal isn’t a wall. It’s a gatekeeper, and a fair one if you’re prepared.