What we verified in “What if the appraisal comes in low, and what you can do”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. According to the CFPB, an appraisal is a written document that shows an opinion of how much a property is worth, and an independent assessment of its value; it describes what makes the home valuable and may show how it compares to other properties in the neighborhood; when you borrow to buy, the lender may need a new appraisal and may require you to pay for it; and it may also use other ways to check the home's value.

   Sources 1 · What are appraisals and why do I need to look at them? (last reviewed September 4, 2020): 'An appraisal is a written document that shows an opinion of how much a property is worth'; 'An appraisal is an independent assessment of the value of the property'; 'It describes what makes it valuable and may show how it compares to other properties in the neighborhood'; 'your lender may need to get a new appraisal and may require you to pay for it'; 'Your lender may also use other ways to check the value of the home' · Checked October 17, 2026

2. According to the CFPB, it is very risky to buy a home for more than its appraised value; first get a copy of the appraisal, and a good next step is to ask the seller to reduce the price; appraisers have to follow rules and lenders are not allowed to interfere with their judgment; the lender is required to send you a copy, and if you have not received it, ask for it; you can often use the lower appraised value to negotiate a lower price, because it is strong evidence the price was above market value; if the seller won't reduce the price, you may want to cancel the sale; depending on your contract, cancelling may have costs, though they are likely small compared to buying a home that isn't worth what you paid; and it suggests considering consulting an attorney about your options.

   Sources 2 · My appraisal is less than the sale price. What does that mean for me? (last reviewed September 11, 2024): 'It is very risky to purchase a home for more than the appraised value'; 'First, get a copy of the appraisal'; 'A good next step is to ask the seller to reduce the price on the home'; 'Appraisers have to follow rules in arriving at the value of a property'; 'lenders are not allowed to interfere with the appraiser's judgment'; 'The lender is required to send you a copy of the appraisal'; 'If you haven't received a copy, ask your lender for it'; 'You can often use the lower appraised value to negotiate a reduction in the sales price of the home'; 'The appraisal is strong evidence that the price was above the market value of the home'; 'If the seller won't reduce the price on the home, you may want to cancel the sale'; 'Depending on the terms of your purchase contract, there may be costs associated with cancelling the sale'; 'these costs are likely small compared to buying a home that isn't worth what you paid for it'; 'Consider consulting an attorney about your options' · Checked October 17, 2026

3. Under Regulation B, for a loan secured by a first lien on a dwelling, the lender must give you a copy of all appraisals and other written valuations promptly upon completion or three business days before consummation, whichever is earlier; you can waive that timing and get them at closing, but the waiver must be obtained at least three business days before; the lender must notify you in writing of your right to a copy no later than the third business day after receiving your application; it cannot charge you for the copy, though it can charge a reasonable fee for the cost of the appraisal; and these rules apply even if the loan is denied or the application is withdrawn.

   Sources 3 · 12 CFR §1002.14(a)(1) ('A creditor shall provide an applicant a copy of all appraisals and other written valuations'; 'promptly upon completion, or three business days prior to consummation of the transaction'; 'whichever is earlier'; 'An applicant may waive the timing requirement'; 'Any such waiver must be obtained at least three business days prior to consummation'), (a)(2) ('not later than the third business day after the creditor receives an application'), (a)(3) ('A creditor shall not charge an applicant for providing a copy of appraisals'; 'may require applicants to pay a reasonable fee to reimburse the creditor for the cost of the appraisal') and (a)(4) ('apply whether credit is extended or denied or if the application is incomplete or withdrawn') · Checked October 17, 2026

4. Under Regulation Z, for a loan secured by your principal dwelling, no one may try to make the value rest on anything other than the appraiser's independent judgment through coercion, bribery, intimidation or other pressure, such as seeking to influence the appraiser to report a minimum value; but it is permitted to ask the appraiser to consider additional, appropriate property information, including comparable properties, to give more detail or explanation for the conclusion, or to correct errors.

   Sources 4 · 12 CFR §1026.42(c)(1) ('cause the value assigned to the consumer's principal dwelling to be based on any factor other than the independent judgment of a person that prepares valuations'; 'Seeking to influence a person that prepares a valuation to report a minimum or maximum value') and (c)(3) ('Asking a person that prepares a valuation to consider additional, appropriate property information, including information about comparable properties'; 'provide further detail, substantiation, or explanation'; 'Asking a person that prepares a valuation to correct errors in the valuation') · Checked October 17, 2026

5. Under the Fannie Mae Selling Guide, for a purchase, the loan-to-value ratio is calculated by dividing the original loan amount by the property value, and that value is the lower of the sales price or the current appraised value.

   Sources 5 · Selling Guide B2-1.2-01, Loan-to-Value (LTV) Ratios: 'Divide the original loan amount by the property value'; 'The property value is the lower of the sales price or the current appraised value' · Checked October 17, 2026

6. Under FHA Handbook 4000.1, the maximum mortgage in most programs is the lesser of the area's mortgage limit or a percentage of the 'Adjusted Value'; for a purchase, the Adjusted Value is the lesser of the purchase price (minus any inducements to purchase) or the property value.

   Sources 6 · HUD Handbook 4000.1, II.A.2.a, Maximum Mortgage Amounts: 'the maximum Mortgage is the lesser of the Nationwide Mortgage Limit for the area, or a percentage of the Adjusted Value'; 'For purchase transactions, the Adjusted Value is the lesser of'; 'purchase price less any inducements to purchase'; 'the Property Value' · Checked October 17, 2026

7. Under FHA Handbook 4000.1, if you did not receive the statement of appraised value (form HUD-92800.5B) before signing the sales contract, the contract must be amended before closing to include an amendatory clause; it says you are not obligated to complete the purchase or forfeit your earnest money if you are not given a written statement of an appraised value not less than the price; that you have the option of proceeding regardless of the appraisal; and that HUD does not warrant the value or condition of the property. It is not required in certain sales, such as HUD REO sales and 203(k) loans.

   Sources 6 · HUD Handbook 4000.1, II.A.1, Amendatory Clause: 'the sales contract must be amended before closing to include an amendatory clause'; 'the purchaser shall not be obligated to complete the purchase of the property described herein or to incur any penalty by forfeiture of earnest money deposits or otherwise'; 'setting forth the appraised value of the property of not less than'; 'The purchaser shall have the privilege and option of proceeding with consummation of the contract without regard to the amount of the appraised valuation'; 'HUD does not warrant the value or condition of the property'; 'An amendatory clause is not required in connection with'; 'HUD REO sales' · Checked October 17, 2026

8. According to the VA, the VA escape clause must be signed on all VA purchase loans if the sales contract is signed before the Veteran receives the Notice of Value, including new construction; if the reasonable value VA sets is below the price, it lets you negotiate a lower price with the seller, proceed by covering the difference with a down payment from your own funds, or exit the transaction without forfeiting your earnest money; if you proceed, the loan is capped at the lesser of the price or the reasonable value; you can request a reconsideration of value; the clause cannot be used to cancel for any other reason; and deposits to the builder for upgrades on new construction are not earnest money.

   Sources 7 · VA Escape Clause (VA Home Loans): 'if the sales contract is signed before the Veteran receives the Notice of Value'; 'This includes contracts for new construction'; 'Negotiate with the seller to lower the purchase price'; 'Proceed with the transaction by covering the price difference by making a down payment with the Veteran's funds'; 'Exit the transaction without forfeiting any earnest money deposit'; 'the loan amount would be capped at the lesser of the agreed-upon purchase price or the reasonable value (whichever is lower)'; 'The home buyer can request a reconsideration of value'; 'may not be used to cancel a loan purchase contract for any reason other than in response to the reasonable value established by VA being lower than the contract price'; 'deposits to the builder for upgrades for new construction are not considered earnest money' · Checked October 17, 2026

9. Under the Fannie Mae Selling Guide, for loans that require an appraisal, the lender must have a reconsideration of value (ROV) process the borrower can start, with steps to appeal when you believe the value is unsupported, may be deficient or reflects prohibited discriminatory practices; the lender must give you a disclosure outlining the process when it provides the appraisal, making clear that only one borrower-initiated ROV is permitted per appraisal; the request must include your name, the address, the appraisal's effective date, the appraiser's name and the request date, the areas you believe are unsupported or wrong, up to five comparable properties or other data with their sources, and why the data supports the request; and after closing it can no longer be submitted.

   Sources 8 · Selling Guide B4-1.3-12, Appraisal Quality Matters, 'Reconsideration of Value': 'the lender must have policies and procedures in place for a borrower-initiated reconsideration of value (ROV)'; 'steps for the borrower(s) to appeal an appraisal when it is believed the opinion of value is unsupported, may be deficient due to unacceptable appraisal practices, or reflects prohibited discriminatory practices'; 'The lender must provide a disclosure to the borrower outlining the ROV process when the appraisal report is provided to the borrower'; 'only one borrower-initiated ROV is permitted per appraisal'; 'Borrower(s) name, Property address, Effective date of the appraisal, Appraiser name, and Date of the ROV request'; 'Identification and description of unsupported, inaccurate, or deficient areas in the appraisal report'; 'comparable properties (not to exceed five)'; 'An explanation of why the new data supports the ROV'; 'After a loan has closed, an ROV request is no longer allowed to be submitted by the borrower' · Checked October 17, 2026

10. HUD Mortgagee Letter 2025-08 (March 19, 2025) rescinded the FHA changes in Mortgagee Letter 2024-07, which had expanded reconsideration of value to include a borrower-initiated process, and restored the previous policy; under FHA, the underwriter may request a reconsideration of value when the appraiser did not consider information relevant on the appraisal's effective date, and must give the appraiser the necessary data; the appraiser may charge an additional fee if the data was not available on that date, but if that was not the borrower's fault, the borrower must not be held responsible for the additional costs.

    Sources 9 · HUD Mortgagee Letter 2025-08, Rescinding Multiple Appraisal Policy Related Mortgagee Letters (March 19, 2025): 'rescinds Federal Housing Administration (FHA) Single Family Housing policy changes issued in ML 2024-07'; 'to include a Borrower-initiated ROV process'; 'to restore previous policy'; 'The underwriter may request a reconsideration of value when the Appraiser did not consider information that was relevant on the effective date of the appraisal'; 'The underwriter must provide the Appraiser with all relevant data that is necessary for a reconsideration of value'; 'The Appraiser may charge an additional fee if the relevant data was not available on the effective date of the appraisal'; 'the Borrower must not be held responsible for the additional costs' · Checked October 17, 2026

11. According to NAR, a mismatch between the appraised value and the purchase price can affect how much your lender lets you borrow; you can negotiate to include an appraisal contingency in your purchase agreement, meaning a condition that the value and the price must align for the transaction to continue, but it is not required.

    Sources 10 · Consumer Guide: The Appraisal Process: 'A mismatch between a home's appraised value and the purchase price can impact how much your lender allows you to borrow for your mortgage'; 'You can negotiate to include an appraisal contingency'; 'a condition that the value and purchase price must align in order for the transaction to continue'; 'but an appraisal contingency is not required' · Checked October 17, 2026

12. According to the CFPB, the lender may change your closing costs without the usual restrictions if the appraisal on the home you want to buy came in higher or lower than expected, among other 'changes in circumstances'.

    Sources 11 · Can my final mortgage costs increase from what was on my Loan Estimate? (last reviewed September 11, 2024): 'your lender is allowed to change your closing costs without restriction if'; 'The appraisal on the home you want to buy came in higher or lower than expected'; 'These types of situations are called a' · Checked October 17, 2026

13. According to the CFPB, some loan programs require the property to meet specified standards, and the appraisal may say the home is subject to repairs; if major repairs such as a new roof are needed, the lender can require them before closing or ask you to put money in a special account to pay for them right after closing.

    Sources 12 · Schedule a home inspection (page last modified December 12, 2024): 'Some loan programs might require the property to meet specified standards'; 'The appraisal could say the property is subject to repairs'; 'the lender can require that the repairs be made before closing, as a condition of getting the loan'; 'put enough money in a special account to pay for the repair immediately after closing' · Checked October 17, 2026

14. Under the Fair Housing Act, it is illegal for anyone whose business includes residential real estate-related transactions to discriminate in those transactions because of race, color, religion, sex, disability, familial status or national origin, and those transactions include the appraising of residential real property; an appraiser may consider factors other than those.

    Sources 13 · 42 U.S.C. §3605(a) ('to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color, religion, sex, handicap, familial status, or national origin'), (b)(2) ('The selling, brokering, or appraising of residential real property') and (c) ('to take into consideration factors other than race, color, religion, national origin, sex, handicap, or familial status') · Checked October 17, 2026

15. The CFPB's 'Your home loan toolkit' says the Fair Housing Act and the Equal Credit Opportunity Act prohibit housing and credit discrimination, and that you can file a complaint with HUD by calling (800) 669-9777.

    Sources 14 · Your home loan toolkit, section 1, 'Handle problems', p. 13: 'The Fair Housing Act and Equal Credit Opportunity Act prohibit'; 'housing and credit discrimination'; 'Submit a complaint to the U.S. Department of Housing and Urban Development (HUD) by calling (800) 669-9777' · Checked October 17, 2026

16. Under the Fair Housing Act, an aggrieved person may file a complaint with HUD no later than one year after the discriminatory housing practice occurred or ended.

    Sources 15 · 42 U.S.C. §3610(a)(1)(A)(i): 'not later than one year after an alleged discriminatory housing practice has occurred or terminated, file a complaint with the Secretary' · Checked October 17, 2026

17. HUD-approved housing counselors give independent advice on buying a home, renting, defaults and credit, often at little or no cost.

    Sources 16 · Find a Housing Counselor: 'Housing counselors throughout the country can provide advice on buying a home, renting, defaults, forbearances, foreclosures, and credit issues'; 'they can offer independent advice, often at little or no cost to you' · Checked October 17, 2026