The VA home loan benefit is widely seen as one of the strongest financing tools for Veterans and military families. But in today’s housing market of high prices, tight inventory, and heavy cash competition, qualified VA buyers are running into something unexpected: VA appraisal shock.

That shock often arrives as a low VA loan appraisal, a repair list under VA Minimum Property Requirements, or a seller who refuses to consider a VA offer.

Navy Veteran Mark Miller experienced this firsthand.

“Our realtor was very open with us, that there are going to be some people that don’t even want to deal with your VA loan,” Miller said, recalling how quickly some doors closed on his family’s offers.

“Me and my wife had moments like this, unfortunately. We really like this place, but now we don’t get this place.”

This is the system behind those outcomes, and how VA buyers can compete inside it instead of being blindsided by it.

Why VA Appraisal Shock Is Happening Right Now

Three big forces are colliding:

• Prices are high

The Best Sitrep for Today's Vets.

Benefits intel, military tech, field-tested gear, untold stories of those who served, and history like you've never heard before. Sign up for the VeteranLife newsletter.

​

Subscribe

Always free. 🇺🇸 | Unsubscribe anytime.

• Existing-home sales have been hovering near three-decade lows
• All-cash buyers are at all-time highs, making up about 26% of primary-residence buyers

Cash buyers remove uncertainty for sellers. They don’t need an appraisal to close, and they rarely ask for repair concessions. Conventional buyers often waive contingencies to keep up.

Against that backdrop, some sellers simply decide they don’t want the perceived complexity of VA offers at all.

“Some homeowners in some markets will list a home and say you can make a conventional offer, you can make a cash offer. That’s it. Don’t send me a VA offer,” said Chris Birk, Vice President of Mortgage Insight at Veterans United Home Loans.

That kind of gatekeeping means many Veterans never even get to the appraisal stage, and their offers are filtered out based on perception and fear of complications.

At the same time, VA lending itself is rebounding. Recent analyses show total VA loan volume up more than 25% year-over-year, with purchase loans up around 8–10%, and VA loans making up about 7.3% of mortgaged homebuyers in a recent month, the highest August share since 2019.

More Veterans are using their benefits again, in a market that’s still tilted toward cash and strong conventional buyers.

What the VA Appraisal Actually Does

Most buyers think the VA appraisal is simply about checking whether the home is “worth the price.” In reality, it has two missions:

1. Establish fair market value based on recent closed sales.
2. Confirm the home meets VA Minimum Property Requirements so it’s safe, structurally sound, and sanitary.

Under the VA Lender’s Handbook, appraisers must identify readily observable conditions that conflict with MPRs. The focus is on big-ticket safety and livability issues, not cosmetic defects.

Common MPR-level issues include:

• Missing or unsafe handrails and steps
• Peeling paint on pre-1978 homes (possible lead-based paint)
• Active roof leaks or significant roof damage
• Exposed or unsafe wiring and panel issues
• Nonfunctional heating in cold climates
• Ongoing water intrusion, drainage problems, or foundation movement

The VA appraisal inspection is not a full home inspection; VA states that explicitly. Appraisers don’t operate every system or dig into walls. But when they see obvious issues that cross the “safe, sound, sanitary” line, they have to call them out.

Those required fixes can become a surprise second hurdle for buyers who thought they only had to worry about price.

How Low VA Appraisals Happen: Tidewater and ROV

When a VA appraiser believes the home may not support the agreed contract price, the VA Tidewater Initiative comes into play.

Tidewater is meant to prevent surprise low values. Here’s how it works:

• The appraiser issues a Tidewater notice to the lender.
• A 48-hour window opens for the buyer’s side to submit additional comparable sales and data.
• The appraiser reviews that evidence and then issues the value on the Notice of Value.

If the appraised value is still below the contract price after Tidewater, the buyer can request a Reconsideration of Value (ROV). That’s a structured appeal where the VA reviews the appraisal alongside any new data the buyer’s team provides.

Tidewater and ROV are not emotional appeals; they’re data-driven processes. The more prepared your agent and lender are with realistic comps and documentation, the better your odds of narrowing or closing the gap.

Who Covers the Gap When the VA Appraisal Is Low

The VA will only guarantee the loan up to the appraised value, not the contract price. That’s where VA appraisal shock becomes a cash problem.

For example:

• Contract price: $300,000
• Appraised value: $280,000
• Gap: $20,000

At that point, the deal has four main paths:

• The seller reduces the price to $280,000
• The buyer brings $20,000 cash to closing
• Both sides negotiate a middle ground with some price reduction and some cash
• The contract falls apart

For VA buyers who chose the program specifically for the 0% down VA benefit, coming up with an extra five figures in cash is often not realistic.

Recent buyer data shows the median down payment for all buyers is around 19%, and about 10% for first-time buyers. Many VA buyers, by design, are entering the market without large down payment reserves. A low appraisal can instantly push them out of contention.

The MPR Repair List: The Second Shock

Even when the value comes in at or above the contract price, VA Minimum Property Requirements can trigger their own form of shock: the repair list.

Required VA appraisal repairs must be completed, documented, and cleared before the VA will guarantee the loan. Lenders and VA may allow a limited VA escrow holdback in some circumstances, especially for minor or weather-dependent items, but the expectation is that MPR-level concerns will be resolved promptly and re-checked.

In a buyer’s market, sellers are more likely to agree to MPR repairs to keep a contract alive. In a seller’s market with multiple offers, some sellers simply choose buyers who don’t bring MPR conditions into the deal.

That’s how a Veteran with solid income and credit can lose a home, not because of risk or reliability, but because a different buyer’s financing doesn’t require the same repairs.

VA Appraisal Timelines Versus Cash Reality

VA uses its own approved panel of appraisers and publishes VA appraisal fees and timeliness standards. Depending on the market and property type, the VA appraisal timeline often ranges from about one to several weeks from assignment to completed report.

By traditional mortgage standards, that’s normal.

But when a seller is comparing a VA buyer to a cash buyer who can close in 10 days and a conventional buyer whose lender promises a fast closing with flexible appraisal options, any delay or uncertainty around the VA appraisal report can become a deciding factor.

It’s not that VA loans are unusually slow. It’s that cash is instant, and conventional financing often appears more flexible in competitive negotiations.

How VA Buyers Can Compete in Today’s Market

Take charge of your VA homebuying journey. Approach market cycles and VA rules strategically to strengthen your offer, rather than letting them slow you down.

1. Use VA-experienced agents and lenders

Ask upfront how many VA home loans your agent and lender have closed recently. Then specifically ask how they handle:

• VA Minimum Property Requirements
• VA Tidewater Initiative notices
• Reconsideration of Value requests
• VA escrow holdback scenarios

Teams that understand these processes can anticipate objections, price more strategically, and move quickly when issues arise.

2. Underwrite the appraisal before you write the offer

Before writing an offer, ask your agent to walk you through:

• Recent closed sales (including both conventional and VA loan closings where possible)
• How far above or below those comps your offer would sit
• Whether the home’s condition raises obvious MPR flags

If your offer is significantly higher than recent closed sales, you’re more likely to face Tidewater. Knowing that upfront gives you a chance to adjust or prepare for a potential gap.

3. Pre-identify MPR red flags

During showings and inspections, look at the home the way a VA appraiser would:

• Are there loose or missing handrails or unsafe stairs?
• Do you see signs of water intrusion, foundation cracks, or roof issues?
• Is there peeling paint on older exteriors or windows?
• Is there visible, unsafe wiring or obvious electrical hazards?
• Is the heating system functional in a climate where it’s required?

If a property has potential MPR issues, build that into your negotiation plan or be ready to walk away early.

4. Treat Tidewater and ROV like mission clocks

If you receive a Tidewater notice, the 48-hour window is critical. Use it to:

• Gather the strongest, most recent comps with your agent
• Highlight upgrades or features that support the price
• Prepare for a potential [Reconsideration of Value] if the initial outcome is still short

Approached calmly and strategically, Tidewater and ROV are tools, not disasters.

Bottom Line for Veteran Buyers

From the Veteran’s vantage point, appraisal shock feels personal:

• Was my offer weak?
• Was my VA home loan the problem?
• Did I do something wrong?

The reality is structural, not personal:

• VA appraisal guidelines are designed to keep Veterans out of unsafe or overvalued homes
• A high-price, low-inventory, cash-heavy market magnifies every bit of friction in the system
• Misconceptions about VA loans and appraisals cause some sellers and agents to filter out VA buyers before they’ve even seen their full strength

If you’ve lost a home to a low VA loan appraisal, MPR repairs, or seller bias, you’re not alone, and you’re not the problem.

Understanding how VA appraisals, MPRs, the VA Tidewater Initiative, and Reconsideration of Value really work gives you leverage to offset some of the anxiety that can come with the process. It lets you spot red flags earlier, negotiate from a position of knowledge, and walk away from bad deals without regret.

Your VA home loan benefit remains one of the strongest financing tools in the housing market. The key is understanding the system behind it, before it shows up as a shock on your Notice of Value.

Suggested reads:

• Your VA Disability Rating Was Never Built For Veterans to Understand
• What the VA's $77M Cemetery Grant Says About How Vets Are Honored Long After Service
• The VA Deadline Veterans Miss Every January - And the Money At Stake