What if the appraisal comes in low, and what you can do
Why a low appraisal matters, your right to a copy, how to negotiate, pay the difference or cancel, and how to ask for a reconsideration of value.
Verified against official sources on October 17, 2026 16 official sources
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In short
What you need to know
Quick answer
If the appraisal comes in below the price, the lender bases your loan on the lower value, so you would come up short at closing. The CFPB says it is very risky to pay more than a home is worth and suggests getting your copy of the appraisal and using it to negotiate a lower price; if the seller will not lower it, you can pay the difference or consider cancelling, and what happens to your deposit depends on your contract. With FHA and VA loans, if you signed before knowing the value, a contract clause lets you walk away without losing your deposit, and you can also ask for a reconsideration of value if the appraisal has errors.
What matters most
- On a purchase, the lender uses the lower of the price and the appraisal: if the appraisal comes in low, your maximum loan goes down.
- You have the right to a free copy of the appraisal, no later than three business days before closing.
- Your options: negotiate a lower price, pay the difference yourself or cancel, depending on what your contract says.
- With FHA and VA, if you signed before knowing the value, a contract clause lets you exit without losing your earnest money if the value is below the price.
Is this for you?
This guide is for you if…
- You already have a purchase contract and the appraisal came in below the price.
- You are about to make an offer and want to know how your contract protects you if the appraisal comes in low.
- You think the appraisal has errors or missed comparable sales and want to know how to ask for a review.
Get direct help first if…
- You are looking for what a home inspection is: that is something else, with its own guide.
- You are refinancing: many appraisal rules are similar, but this guide is about buying.
You signed the contract, the lender ordered the appraisal and the number came in below the price. This guide is for that moment, or for before you make an offer: it explains why it matters, your right to a copy, your options, how your contract protects you and how to ask for the value to be reconsidered.
- Before closing, at the latest, you must get your copy of the appraisal
- 3 business days3
- The copy of the appraisal; what you can be charged for is the appraisal itself
- Free3
- For reconsideration of value per appraisal, on loans Fannie Mae buys
- 1 request8
- Comparable sales you can propose in that request
- Up to 58
What the appraisal is and why a low one matters
According to the CFPB, the appraisalhome appraisalAn appraisal is a written document that gives a professional appraiser's opinion of how much a property is worth. The lender orders it before approving the mortgage, because the home is the loan's collateral and the lender does not want to lend more than it is worth. If the appraisal comes in below the price you agreed, the bank bases the loan on the lower value and you will have to cover the difference, renegotiate the price or walk away if your contract allows it. An appraisal is not an inspection: it measures value, not the home's condition.See the full definition is a written document with an independent opinion of how much the home is worth. When you borrow to buy, the lender may order a new appraisal and may charge you for it.1 Appraisers follow rules, and lenders are not allowed to interfere with their judgment.2
The problem with a low appraisal is the loan. On a purchase, the lender does not work from the price you agreed to, but from the lower of the two numbers:
- Conventional loan. Under the Fannie Mae Selling Guide, the loan-to-value ratioloan-to-value ratio (LTV)The loan-to-value ratio (LTV) compares the amount of your mortgage with the appraised value of the property. It is expressed as a percentage: a loan that covers almost the whole value has a high LTV; one with a large down payment, a low LTV. Lenders use it to measure risk: the higher the LTV, the stricter the requirements and the more likely you will be asked for mortgage insurance. Over time, as you pay down principal or the home gains value, your LTV falls, which can let you cancel PMI on a conventional loan.See the full definition uses the lower of the sales price or the appraised value.5
- FHA loan. The maximum mortgage is based on the “Adjusted Value,” which on a purchase is the lesser of the price (minus inducements) or the property value.6
- VA loan. If you go ahead, the loan is capped at the lesser of the price or the reasonable value VA sets.7
That is why NAR says a gap between the appraisal and the price can affect how much your lender lets you borrow.10 And the CFPB warns that it is very risky to buy a home for more than its appraised value.2
Example with real numbers
What changes with a low appraisal on a typical home
With the typical US home value and an FHA loan with the minimum down payment.
- Agreed price (typical US value)
- $332,700
- FHA minimum down payment (3.5%), if the appraisal comes in at or above the price
- $11,645
- FHA loan without the upfront premium, in that case
- $321,056
- If the appraisal comes in below the price
- The loan is based on the appraisal6
- The gap between price and appraisal
- You negotiate it, pay it or cancel, depending on your contract2
This is an example with national numbers. With your own numbers, the tool shows how much home you can afford.
Run it with your numbersHow much house can I afford?Get your copy of the appraisal
Before you decide, you need the full appraisal. Under Regulation B, the lender must tell you in writing about your right to a copy no later than the third business day after your application. Then it must give you a copy of all appraisals and written valuations as soon as they are done, or three business days before closing, whichever comes first. You can waive that timing, but the waiver must be given at least three business days before. The copy is free; what you can be charged is a reasonable fee for the appraisal itself. These rules apply even if your loan is denied or you withdraw the application.3
If it has not arrived, the CFPB says to ask your lender for it.2 Read it calmly: the appraisal describes what gives the home its value and how it compares to others in the neighborhood.1
The appraisal may also say the home is “subject to repairs” to meet your loan program’s standards. If major repairs such as a new roof are needed, the lender can require them before closing or ask you to set aside money in a special account to pay for them right after.12
From a low appraisal to your decision
1. You get notice of your right to a copy
No later than 3 business days after you apply
The lender must tell you in writing.3
2. You receive and read the appraisal
As soon as it is done, or 3 business days before closing
It is free. If it has not arrived, ask for it.3
3. You check your contract
Right away
Look for an appraisal contingency or, with FHA or VA, the required clause, and its deadlines.10
4. You request a reconsideration, if there are errors
Before closing
With data and comparable sales the appraiser did not consider.8
5. You negotiate with the seller
While your deadline runs
The appraisal is strong evidence the price was above market value.2
6. You decide
According to your contract's deadlines
Go ahead at a lower price, pay the difference or cancel.2
Your options if the appraisal comes in low
The CFPB suggests an order: first, get your copy; next, use the appraisal to negotiate.2
Three paths after a low appraisal
The first step
Negotiate the price
If you want that home
Pay the difference
What happens to your deposit depends on your contract: check it before you decide.2
If you decide to pay the difference, that money is added to your down paymentdown paymentThe down payment is the part of the home's price you pay out of your own pocket when you buy; the loan covers the rest. In U.S. Spanish it is also called enganche, cuota inicial or entrada. Each loan type has its own minimum: FHA requires at least 3.5% of the value, VA and USDA loans may require none, and conventional loans ask for more if you want to avoid private mortgage insurance. A larger down payment lowers the loan, the monthly payment and the total interest; many state programs help families put it together.See the full definition: VA describes it as covering the difference with a down payment from your own funds.7 Also, an appraisal that comes in different than expected is a “change in circumstances”: the lender can change your closing costs and send you a revised Loan EstimateLoan EstimateThe Loan Estimate is a three-page form you receive from the lender within days of applying for a mortgage. In the same format at every bank, it sums up the terms of the loan being offered: amount, interest rate, whether the payment can change, the estimated monthly payment with taxes and insurance, the itemized closing costs and how much cash you need at closing. Because every lender uses the same form, it lets you compare offers side by side. It commits you to nothing: requesting one is not accepting the loan.See the full definition.11 The closing costs guide explains what can go up.
If you are thinking of cancelling, the CFPB suggests considering talking to an attorney about your options;2 free legal aidlegal aidLegal aid is the free civil legal help that nonprofit organizations and their lawyers provide to low-income people in civil, not criminal, matters. In housing, that includes representing families facing eviction or foreclosure, alongside matters such as custody, child support, protection from domestic violence and access to benefits. In the United States, the Legal Services Corporation, created by Congress, funds a nationwide network of these organizations; its finder points you to the one in your area. Each sets its own income limits.See the full definition is one option. A HUD-approved housing counselorHUD-approved housing counselorA HUD-approved housing counselor works at an agency HUD has approved to provide housing counseling: independent, expert advice customized to your situation about buying a home, renting, a missed mortgage payment, a foreclosure or credit problems. The agencies usually charge little or nothing; many serve in Spanish and offer the homebuyer education course several assistance programs require. They are not lenders or real estate agents and sell you nothing. Your county page lists the official agencies with phone numbers.See the full definition can go over your numbers with you, often for free or at low cost.16
How your contract protects you: contingency and FHA and VA clauses
What happens to your earnest money depositearnest moneyEarnest money is a deposit the buyer pays when signing the purchase contract to show good faith that the offer is serious. The seller does not keep it: a neutral third party (the title company or a closing agent) normally holds it, and at closing it is applied to your down payment or closing costs. If you back out for a reason the contract allows, such as an inspection or financing contingency, you get it back; if you back out without a valid reason, you can lose it.See the full definition depends on your purchase contractpurchase agreementA purchase agreement is the written contract between you and the seller that is final once the seller accepts your offer and both of you sign it. It gathers the details of the sale: the names of the buyers and sellers, the total price, the real estate agent's commission, the requested closing date and the contingencies. You use it to get your loan, and it is submitted with the closing paperwork. The settlement agent pays out the money according to the contract and the loan, and whether the seller pays some closing costs is also set by the contract.See the full definition.2
Appraisal contingency. According to NAR, you can negotiate an appraisal contingencycontingencyA contingency is a condition you add to your offer or purchase contract to protect yourself: if it is not met, you can change or end the contract and, in general, get your earnest money back. The most common are the inspection contingency, if the inspection finds problems; the appraisal contingency, if the appraisal comes in below the price; the financing or mortgage contingency, if you cannot get the loan within the agreed time; and the home sale contingency, tied to selling your current home. Contingencies are a normal part of buying, but too many can make your offer less attractive to the seller.See the full definition in your contract: a condition that the value and the price must align for the purchase to go forward. It is not required.10
FHA loan: the amendatory clause. If you did not receive the statement of appraised value before signing the contract, the contract must be amended before closing to include an amendatory clause. It says you are not obligated to buy or to forfeit your deposit unless you are given a written statement of an appraised value not less than the price, and that you may go ahead if you want. It also says HUD does not warrant the value or condition of the home. It is not required in certain sales, such as HUD-owned homes.6
VA loan: the escape clause. If you signed the contract before receiving VA’s Notice of Value, the contract must include the VA escape clause, including for new construction. If the reasonable value comes in below the price, you can negotiate a lower price, go ahead by paying the difference with your own money, or exit without losing your earnest money. The clause cannot be used to cancel for any other reason, and deposits to a builder for upgrades are not earnest money.7
How to ask for a reconsideration of value
A reconsideration of value (ROV) asks the appraiser to revisit the conclusion with information they did not take into account. Regulation Z sets what is allowed: no one may pressure the appraiser to report a minimum value, but they may be asked to consider additional, appropriate information, including comparable sales, to explain their conclusion or to correct errors.4
The rules depend on who backs your loan:
- Loans Fannie Mae buys. The lender must have an ROV process you can start, including if you believe the appraisal reflects discriminatory practices, and must explain it when it gives you the appraisal. Only one request is allowed per appraisal, and it must be made before closing. It includes your name, the address, the appraisal date, the appraiser’s name, which parts you believe are unsupported or wrong, up to five comparable properties with their source and why that data supports your request.8
- FHA loans. In March 2025, HUD rescinded the changes that had created a borrower-initiated ROV process and restored the previous policy. Since then, the lender’s underwriter may request one when the appraiser did not consider relevant information as of the appraisal date. If there is an extra fee and the missing data was not your fault, you do not pay it.9
- VA loans. According to VA, the buyer can request a reconsideration of value.7
If you believe there was discrimination. The Fair Housing Act prohibits discrimination in the appraisal of a home because of race, color, religion, sex, disability, familial status or national origin.13 Besides asking for a reconsideration, you can file a complaint with HUD at (800) 669-9777,14 no later than one year after what happened.15
If this is you
Costly mistakes
Mistake: Deciding without seeing the full appraisal.
Instead: Get your copy: it is free and must reach you at least 3 business days before closing.3
Mistake: Overpaying without thinking it through so you do not lose the home.
Instead: The CFPB says buying above the appraisal is very risky: negotiate first.2
Mistake: Not checking your contract's dates in time.
Instead: As soon as the appraisal arrives, look at the contingency, its deadlines and what happens to your deposit.2
Mistake: Asking for a reconsideration without data.
Instead: Include the areas with errors and up to five comparable sales with their source.8
Mistake: Pressuring the appraiser to hit a number.
Instead: That is prohibited; what is allowed is providing information and asking for errors to be corrected.4
What to do this week
- Ask for the full copy of the appraisal if you have not received it.3
- Read your contract: appraisal contingency or FHA or VA clause, and its deadlines.10
- If you see errors or missing comparable sales, ask your lender for its reconsideration of value process.8
- With your agent, ask the seller to lower the price, using the appraisal as evidence.2
- Work out whether you could cover the difference with the how much house can I afford tool, and review the revised Loan Estimate.11
- If you want help with your numbers, find a counselor through the housing counselors guide; for your agent and inspector, read the guides on how to choose a real estate agent and the home inspection.16
Your numbers
The minimum for this loan is 3.5%. More down lowers the monthly payment.
Adjust advanced details
First number: share of income for housing. Second: housing plus debts. Lender references, not fixed rules.
Let's do the math
Estimated top price
National figure$227,000
Limited by the housing payment: at that price it would be about $1,883 a month, 28% of your income.
- By the housing payment (28% of income)Limits you$227,000
- By your total debts (36% of income)$292,000
- By your cash (down payment + closing)$330,500
- Typical home in the United States
- $332,700
- Your cap is 68% of the typical home.
What changes if…?
- …you save $10,000 more$227,000
- …you cut $200 a month in debts$227,000
Your maximum price with four loans
Same income, debts and savings; only the down payment and the loan type change. ITIN uses an example down payment and rate.
| FHA 3.5% | Conventional 5% | Conventional 20% | ITIN 15% (example) | |
|---|---|---|---|---|
| Maximum price | $227,000 | $232,000 | $93,000 | $119,000 |
| Payment per month | $1,883 | $1,882 | $616 | $898 |
Educational estimate, not a pre-approval. Uses example insurance (0.5% of value per year) and example closing costs (3% of price); the tax is the place’s typical rate.
Ready to see the numbers? Find your county here
See how this applies in your county: its loan limits, prices and rents, from the official data.
Printable checklist
Frequently asked questions
What happens if the appraisal comes in lower than the price?
The lender bases your loan on the lower of the price and the appraisal, so you would need more money to close. The CFPB suggests getting your copy of the appraisal and using it to negotiate a lower price with the seller. If the seller will not lower it, you can pay the difference or consider cancelling.
Do I lose my deposit if I cancel because of a low appraisal?
It depends on your contract. The CFPB says that, depending on its terms, cancelling may have costs. If your contract has an appraisal contingency, check what it says about the deposit. With FHA and VA, if you signed before knowing the value, the contract clause lets you exit without losing your earnest money when the value is below the price.
Can I ask for another appraisal or a review?
You can ask your lender for a reconsideration of value (ROV). For loans Fannie Mae buys, the lender must have a process for it: one request per appraisal, with up to five comparable sales, before closing. With FHA, the lender's underwriter can request one if the appraiser did not consider relevant information, and with VA you can request one too.
Do they have to give me a copy of the appraisal?
Yes. Under Regulation B, the lender must give you a free copy of each appraisal as soon as it is done, or no later than three business days before closing, whichever comes first. You can be charged for the cost of the appraisal itself.
Can I pay the difference between the price and the appraisal?
Yes, if you want to go ahead. The loan is based on the lower value, so the difference comes out of your pocket, on top of the down payment. With FHA and VA, the contract clauses give you the option to proceed regardless of the appraisal.
Can my agent or lender ask the appraiser to raise the value?
They cannot pressure the appraiser to report a minimum value. Regulation Z does allow asking the appraiser to consider additional information, such as comparable sales, to explain the conclusion or to correct errors.
Does a low appraisal change my closing costs?
It can. The CFPB says that if the appraisal comes in higher or lower than expected, that is a change in circumstances and the lender can change your costs. Review the revised Loan Estimate it sends you.
What do I do if I think the appraisal was discriminatory?
The Fair Housing Act prohibits discrimination in the appraisal of a home because of race, national origin and other characteristics. You can ask your lender for a reconsideration of value and complain to HUD at (800) 669-9777, no later than one year afterward.
Sources
Every figure in this guide comes from one of these official sources. The number next to a sentence leads to the source behind it.
Each source on one line: who publishes it, its title, its address and the date we read it.
- 1. CFPB · What are appraisals and why do I need to look at them? · consumerfinance.gov · Accessed October 17, 2026
- 2. CFPB · My appraisal is less than the sale price. What does that mean for me? · consumerfinance.gov · Accessed October 17, 2026
- 3. CFPB (Code of Federal Regulations, text at Cornell LII) · Regulation B, 12 CFR §1002.14, Rules on providing appraisals and other valuations · law.cornell.edu · Accessed October 17, 2026
- 4. CFPB (Code of Federal Regulations, text at Cornell LII) · Regulation Z, 12 CFR §1026.42, Valuation independence · law.cornell.edu · Accessed October 17, 2026
- 5. Fannie Mae · Fannie Mae Selling Guide B2-1.2-01, Loan-to-Value (LTV) Ratios · selling-guide.fanniemae.com · Accessed October 17, 2026
- 6. HUD · FHA Single Family Housing Policy Handbook 4000.1 · hud.gov · Accessed October 17, 2026
- 7. U.S. Department of Veterans Affairs (VA) · VA Escape Clause · benefits.va.gov · Accessed October 17, 2026
- 8. Fannie Mae · Fannie Mae Selling Guide B4-1.3-12, Appraisal Quality Matters · selling-guide.fanniemae.com · Accessed October 17, 2026
See the other 8 sources
- 9. HUD · HUD Mortgagee Letter 2025-08, Rescinding Multiple Appraisal Policy Related Mortgagee Letters · hud.gov · Accessed October 17, 2026
- 10. National Association of REALTORS · Consumer Guide: The Appraisal Process · nar.realtor · Accessed October 17, 2026
- 11. CFPB · Can my final mortgage costs increase from what was on my Loan Estimate? · consumerfinance.gov · Accessed October 17, 2026
- 12. CFPB · Schedule a home inspection · consumerfinance.gov · Accessed October 17, 2026
- 13. U.S. Congress (text at Cornell LII) · 42 U.S.C. §3605, Discrimination in residential real estate-related transactions (Fair Housing Act) · law.cornell.edu · Accessed October 17, 2026
- 14. CFPB · Your home loan toolkit: A step-by-step guide · files.consumerfinance.gov · Accessed October 17, 2026
- 15. U.S. Congress (text at Cornell LII) · 42 U.S.C. §3610, Administrative enforcement; preliminary matters · law.cornell.edu · Accessed October 17, 2026
- 16. CFPB · Find a Housing Counselor · consumerfinance.gov · Accessed October 17, 2026
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