The VA Loan is the best loan option out there, and it’s Uncle Sam’s way of patting veterans like myself on the back for serving our country. Unfortunately, there are still some listing agents out there that are hesitant to accept any offers with a VA Loan. These myths are often unfounded or have been perpetuated for so long that, while they may have been true at one time, are no longer relevant. In this article, I’m going to dive into the reasons why below, as well as objections for buyer’s agents who are helping out those who fought for the American Dream.
Myth: VA Loans Don’t Appraise at Purchase Price
This is untrue. VA Appraisals follow the same Uniform Appraisal Dataset that Conventional loans do, and have adopted this framework since at least 2014, as evidence in VA Circular 26-11-14. This means that the property value is determined in the exact same way as if the buyer had a Conventional loan instead. While I can’t find any recent data from the VA or the GSEs (Government Sponsored Entities, Fannie Mae and Freddie Mac, who back Conventional Mortgages), this recent study conducted in 2024 by CSS, a mortgage lender, shows that in their 10 most active states, the appraisal gap was lower than the purchase price only 8.4% of the time (CSS, n.d.).
VA Appraisers aren’t looking for any more or any less than their non-VA licensed counterparts are, at least when it comes to determining the value of a property. On top of value, they are looking to make sure the property is safe, structurally sound, and sanitary. These are called the Minimum Property Requirements (MPRs). I will elaborate on that further in the article.
Myth: There’s No Way to Fight a Low Appraisal Price
False. In the rare circumstance that the appraisal comes below the contract price, there are two processes to follow (in order): Tidewater and ROV. With Tidewater, the lender and the agents look for comparable properties that support the sale price in the market. Then, they present it to the appraiser. If it still doesn’t appraise, then we can completely bypass the Appraiser entirely by appealing to the VA using the ROV (Reconsideration of Value) process. Bottom line: there are more opportunities to dispute a low appraised value of a home than with any other loan product.
If that still doesn’t work, there are a few other options to be considered: the buyer can increase their down payment to cover the appraisal gap, the seller can lower the sale price, or the buyer can walk away from the property. At the end of the day, the appraisal is there to make sure the buyer is getting what they are paying for, and if after going through the Tidewater and ROV processes the sale price still isn’t supported by comparable properties in the area, then maybe the house is overpriced after all.
Minimum Property Requirements Are Very Specific – One Small Thing Will Kill The Deal
False. VA Appraisers are looking to make sure the property is safe, structurally sound, and sanitary. They are not looking for minor, cosmetic defects when determining MPRs. To quote the VA Lending Handbook:
“The appraiser should not recommend repairs of cosmetic items, items involving minor deferred maintenance or normal wear and tear, or items that are inconsequential in relation to the overall condition of the property. While minor repairs should not be recommended, the appraiser should consider these items in the overall condition rating when estimating the market value of the
property.” – VA Lenders Handbook, Chapter 12: Minimum Property Requirements, Page 12-3
What constitutes safe, structurally sound and sanitary are outlined in Chapter 12. In terms of utilities, water, electricity etc. must be turned on in all units. There has to be good workmanship for all work done on the property. Heating is sometimes required, but may not be required in mild climates. Air conditioning is not required, but if air conditioning is present it must be operational. Roofs can’t leak and there has to be “future reasonable utility”. These are all very basic requirements any buyer would want out of a property, and are not tall orders for a buyer to want.
If a property doesn’t meet some of these requirements, the appraisal will be made “subject-to” the correction of these line items. This can be remedied by the seller, but if the seller is unwilling to fix these items, the buyer can remedy this by switching to a VA Renovation loan, where they can fix these problems after closing and finance the renovations into the total cost of the loan. This means they still get their 0% down benefit while not having to pay out of pocket for these repairs.
VA Loans Don’t Close Fast
False. VA Appraisals take roughly the same time as Conventional appraisals do. I can’t speak for other lenders, but I can close in an average of 18-19 days. If the buyers’ pre-approval was fully underwritten, it could be as little as 10-14 days instead.
No Down Payment Means They’re Weaker Buyers
False. Buyers are often more qualified than Conventional/FHA buyers due to a lack of debt-to-income ratio restrictions (replaced with Residual income), lower interest rates and the absence of mortgage insurance.
To give you an idea of where other loan programs compare, DTI ratios for Conventional loans cap out at 49.99/50.49% (Fannie Mae/Freddie Mac respectively) with an AUS approval; with VA Loans, instead of going based off of DTI, we go based off of VA Residual Income, which is what the VA determines a buyer and their family needs to have left after paying all of their liabilities, including the mortgage. This includes utilities, maintenance, liabilities from a credit report, child care expenses, among others. This often allows buyers to have 60% or higher DTI ratios while still being able to comfortably afford a home.
On top of the lower rates and absence of mortgage insurance which lower their monthly payments, the absence of a strict DTI ratio limit allows them to qualify for even more than if they were to buy a home with a Conventional loan instead.
Closing Thoughts
The VA Loan isn’t just a benefit, it’s a powerful tool that helps those who’ve served our country build wealth through homeownership. Since time immemorial, too many myths and outdated assumptions continue to get in the way of veterans having their offers accepted. These concerns – from appraisal issues to property requirements and closing times – are either no longer valid or have workable solutions built right into the VA lending process. Veterans are not weak buyers; in many cases, they are stronger, more qualified, and better positioned to close than their Conventional buyer counterparts. The veterans who fought for our freedom deserve better than to be sent to the bottom of a pile of offers just because of the loan program.
And most importantly, stop listening to the agent at your office who says she’s “been in the business for 30 years” and doesn’t accept VA Loans.
References (in sequential order):
- U.S. Department of Veterans Affairs. (2011, November 10). VA Circular 26-11-14: Underwriting Guidelines. https://www.benefits.va.gov/HOMELOANS/documents/circulars/26_11_14.pdf
- CSS. (n.d.). Appraisal Gap Analysis: What it is and how to use it. Retrieved July 28, 2025, from https://visitcss.com/resources/blog/appraisal-gap-analysis
- U.S. Department of Veterans Affairs. (n.d.). Chapter 12: Minimum property requirements. VA Lender’s Handbook (VA Pamphlet 26-7). https://www.benefits.va.gov/WARMS/docs/admin26/m26-07/Ch12_Minimum_Property_Requirement_NEW.pdf
