A VA appraisal does two jobs at once: it sets the property's market value, and it checks the home against the VA's Minimum Property Requirements. Both outcomes flow into one document — the Notice of Value — and both can be challenged if something doesn't look right.
Who performs the appraisal
The lender orders the appraisal through the VA's appraisal portal, and it is completed by a VA-assigned appraiser selected from the VA's roster — not chosen by the veteran, the listing agent, or the seller. This independence is by design, to keep value opinions free from pressure by any party with a financial interest in the sale.
Minimum Property Requirements (MPRs)
Beyond value, the appraiser checks the home for baseline safety and soundness:
- The home is safe, sanitary, and structurally sound
- Working heat capable of maintaining a healthy temperature
- Safe water and sewage disposal systems
- An adequate roof
- No exposed wiring or other electrical hazards
- Safe access to and around the property
- No lead-based-paint hazards
- Functioning mechanical systems (plumbing, electrical, HVAC)
- No wood-destroying-insect damage in designated inspection areas
If the appraiser flags an MPR issue, it typically needs to be corrected before the loan can close — usually by the seller, sometimes financed as part of a VA renovation loan.
The Notice of Value (NOV)
The Notice of Value is the appraiser's final report: the property's appraised value and its MPR compliance status. The lender uses the NOV to determine the maximum loan amount it can extend on the property — VA loans are made against the lower of the purchase price or the appraised value.
When value comes in low: Tidewater
Tidewater is a process built into the appraisal timeline itself: if the appraiser's initial value estimate looks like it may come in below the contract price, the lender is notified before the appraisal is finalized, giving the veteran and their agent a window to submit additional comparable sales for the appraiser to consider before the NOV is issued.
After the fact: Reconsideration of Value (ROV)
If the Notice of Value has already been issued and still looks too low, Reconsideration of Value (ROV) is the formal appeal path. This is a request submitted to the appraiser through the lender, typically supported by additional comparable sales or evidence of a factual error in the original report.
The VA Amendment to Contract (the "escape clause")
Every VA purchase contract includes the VA Amendment to Contract, sometimes called the escape clause: if the Notice of Value comes in under the contract price, the veteran has the right to walk away from the purchase and recover their earnest money — they are never obligated to complete a purchase above appraised value.
Who pays for the appraisal
Appraisal fees follow state and VA fee schedules, and the veteran may be charged for the appraisal and the credit report as part of closing costs — these are among the costs veterans are permitted to pay (see our closing costs guide for the full allowable/non-allowable breakdown).
Sources: VA Lenders Handbook M26-7, Chapter 12 (Minimum Property Requirements); va.gov/housing-assistance/home-loans/.