Carlos Scarpero, Senior Loan Originator Specializing in VA Loans
If your VA appraisal comes back below the contract price, you are not stuck. VA has two built-in tools for this exact situation: the Tidewater Procedure, which can head off a low value before it becomes final, and a Reconsideration of Value (ROV) request after the Notice of Value (NOV) is issued. You also have a contract right, the amendatory escape clause, that lets you walk away from the deal and keep your earnest money if the numbers do not work.
This is for anyone under a VA purchase contract who just found out the appraised value came in under what they agreed to pay, or anyone who wants to be ready before that call happens. The rest of this covers what each process actually requires, what changes an appraiser's mind, and what your realistic options are if the value does not move.
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Tidewater happens before the appraisal is finalized, and most borrowers never hear about it until it's too late to use. If the VA appraiser is heading toward a value below the contract price, the appraiser must notify the point of contact listed on the appraisal request (VA Form 26-1805-1) before completing the report. That point of contact then has two business days to submit market data supporting the contract price.
What you send during that window:
The appraiser has to note in the report which sales you submitted, whether each one was considered, why not if it wasn't, and what effect the data had on the value opinion. Ask your lender who is listed as the Tidewater point of contact before the appraisal is even ordered, and whether your agent's information can be included, so nobody misses the two-day window.
VA HANDBOOK EXCERPT
“fee appraisers are required to notify the requester before completing the appraisal when it appears that the estimated market value will be below the sales price”
This is the Tidewater notification. It happens before the report is final, which is exactly why it's your best window to add comps the appraiser may not have seen.
Source:
VA Lender’s Handbook (Pamphlet 26-7) – Chapter 10: Appraisal Process, Topic 8
An ROV happens after the NOV is issued, once a value is already on paper. The veteran requests it in writing to the Regional Loan Center (RLC) with jurisdiction over the property, usually routed through the lender. Supporting market data strengthens the request, but the handbook does not require it. VA staff then reviews the appraisal report, whatever you submitted, and the market data already available through VA's Appraisal Management System.
VA HANDBOOK EXCERPT
“After the NOV has been issued, the Veteran may request reconsideration of value in writing by contacting the RLC of jurisdiction.” … “Providing market data in support of the request, as described in Chapter 10, Topic 8, of this Handbook, is encouraged, but not required. A market data grid is not required.”
The request has to come from the veteran and has to be in writing. Data is not mandatory, but skipping it makes the request much weaker in practice.
Source:
VA Lender’s Handbook (Pamphlet 26-7) – Chapter 10: Appraisal Process, Topic 22
VA staff reviews an ROV within 5 business days. If VA decides a field review is warranted, that review has to be completed within 20 business days. If VA determines an increase in value is appropriate, it issues an amended NOV.
An ROV is an evidence submission, not a complaint. Things that tend to move an appraiser:
Telling the appraiser what the seller paid, arguing that your offer price alone proves value, or complaining that the appraiser is not local do not move an ROV. Those are not evidence.
If you want the fuller walkthrough of building an ROV package, see our guide to appealing a short VA appraisal.
VA HANDBOOK EXCERPT
“The veteran can also pay for a second appraisal if he or she is requesting reconsideration of value. The veteran cannot pay for an appraisal requested by the lender or seller for reconsideration of value.”
If you are the one asking for a second look, you can be charged for it. If the lender or seller wants a second appraisal for their own reconsideration request, that cost cannot be passed to you.
Source:
For a broader look at what you can and cannot be charged on a VA loan, see our breakdown of VA closing costs.
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Yes. Every VA purchase contract has to include the amendatory escape clause. It says that if the contract price is above the value VA establishes, you do not have to complete the purchase and you do not forfeit your earnest money over it. The lender is responsible for making sure this clause is in the contract before closing, and if it is missing, VA may not guarantee the loan.
VA HANDBOOK EXCERPT
“It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest money or otherwise or be obligated to complete the purchase of the property described herein, if the contract purchase price or cost exceeds the reasonable value of the property established by the Department of Veterans Affairs.”
This is the actual escape clause language required in the contract. It protects you specifically on the point of value, and it overrides other parts of the contract that might otherwise lock you in.
Source:
VA Lender’s Handbook (Pamphlet 26-7) – Chapter 9: Legal Instruments, Liens, Escrows, Topic 2
You are not required to bring cash to close a gap, but it is one option among several. The escape clause and the ROV process work together, not against each other. Your realistic paths are:
Often, yes, at least for a while. A Notice of Value is valid for 6 months, and if a veteran is under contract when the validity period ends, VA processing can continue through closing. That means a seller who lets this buyer walk rather than negotiate may hand the exact same value to the next VA buyer, since a new appraisal is not automatically ordered just because the buyer changed. (See VA Lender's Handbook, Chapter 13, Topic 7.) Pointing this out to a seller who is refusing to budge is a fair, factual way to reframe the conversation, not a scare tactic.
No, and mixing them up costs people time. A low value is an opinion of market worth, handled through Tidewater or an ROV. A Minimum Property Requirement (MPR) issue is a health, safety, or structural condition the appraiser flags, like defective lead-based paint on a pre-1978 home, an inoperable furnace, or an active roof leak. VA appraisals are prepared "subject to" the completion of MPR repairs, and those repairs generally have to be finished before the loan can be guaranteed. Who pays for the repair itself is a negotiation between buyer and seller, not something the handbook dictates. Since June 2022, VA has expressly allowed the veteran to pay for repairs needed to meet MPRs and for a required wood destroying pest inspection (VA Circular 26-22-11), so a repair standoff does not have to end the deal.
One nuance worth knowing: after the NOV is issued, VA will consider waiving specific MPR repair items on request in certain circumstances, and lenders can also hold funds in escrow so repairs get finished after closing rather than holding up the transaction. For the full list of what counts as an MPR issue, see our guide to VA minimum property requirements.
Tidewater gives you two business days. That is not much time to gather comps cold. The fix is preparation: ask your agent to start a comp file when the appraisal is ordered, not after the bad news arrives. An ROV adds real time to your closing, since VA staff has up to 5 business days just to start the review, longer if a field review is needed. Build a buffer into your contract or get a written extension before your financing contingency expires. If your offer is already competitive and you want it to hold up through this kind of negotiation, our guide on getting your offer accepted covers how to structure contingencies going in.
Yes. The handbook allows the requester, or any party to the transaction that the requester contacts, to submit market data during the two-business-day Tidewater window. That can include the listing agent or the seller's side, not just the buyer's team.
No. VA's handbook specifically says a market data grid is not required for an ROV, though submitting organized comparable sales data still helps VA staff evaluate the request.
VA staff reviews the appraisal report and any submitted data within 5 business days. If VA decides a field review is needed, that review must be completed within 20 business days.
The veteran can pay for a second appraisal if the veteran is the one requesting reconsideration of value. The veteran cannot be charged for an appraisal that the lender or seller requests for their own reconsideration.
A Notice of Value is valid for 6 months. If you are under contract when that period ends, VA processing can continue until the transaction closes or falls through. VA can extend the validity period case by case.
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