When it comes to obtaining a home loan through the Veterans Administration (VA), understanding the Tidewater Policy is crucial. This policy aims to ensure fairness and transparency during the appraisal process, protecting both veterans and lenders.

The Tidewater Policy comes into play when a VA appraiser determines that the appraised value of a property is lower than the agreed-upon purchase price. Instead of directly rejecting the loan, the Tidewater Policy allows the appraiser to notify the lender of the lower appraisal value. This initiates a “Tidewater Review” period, during which the realtors have an opportunity to provide additional evidence supporting the higher value.

During the Tidewater Review, the realtors can submit recent comparable sales data or provide evidence of improvements made to the property. The goal is to ensure that the appraisal accurately reflects the true market value of the home. If sufficient evidence is presented, the appraiser may revise their valuation. It’s important to note that the Tidewater Policy is time-sensitive, typically requiring a response within a specified period, such as two business days. This ensures a streamlined process and avoids unnecessary delays in the home loan approval.

If you’re a veteran applying for a VA home loan and encounter a lower appraisal value, don’t panic. Tidewater isn’t the end of your transaction.  With the right comps from your realtor, it can be overturned, and your transaction can close smoothly. My last VA transaction in Spokane, WA had Tidewater called on it. My borrower, who worked at Fairchild AFB, closed his loan at the original sales price without him having to come up with any additional cash out of pocket, or his realtor needing to negotiate a lower sales price with the seller.