A VA Notice of Value (NOV) is the document that tells you, the lender, and the seller what VA says the home is reasonably worth, based on an appraisal by a VA-assigned appraiser, and it lists any repairs or conditions that must be met for VA to guarantee the loan. Your VA loan generally can't be more than that reasonable value. If the value comes in below the price, you can pay the difference in cash from your own funds, renegotiate with the seller, ask VA to reconsider the value with real market data, or use the VA option clause in your contract to walk away without losing your earnest money.
How the VA appraisal works
- The lender orders it through VA's system. VA assigns a fee appraiser from its panel. The lender doesn't pick the appraiser and can't shop for a number.
- You pay the appraisal fee. VA publishes appraisal fee and timeliness tables by regional loan center. Texas falls under VA's Houston Regional Loan Center. Because the schedule is set by region and updated periodically, check VA's current table or your Loan Estimate for the amount.
- The appraiser inspects the home. The appraiser estimates market value and notes anything that doesn't meet VA's minimum property requirements.
- The value is reviewed and the NOV is issued. Either VA staff or a VA-approved staff appraisal reviewer at the lender reviews the report and issues the Notice of Value, under VA's Lender Appraisal Processing Program rules in 38 CFR 36.4347.
The VA appraisal is not a home inspection. The inspector you hire during your Texas option period looks at the house for you. The VA appraiser looks at value and minimum property requirements for VA. You want both. See how the appraisal works for the general process.
What's on the Notice of Value
- The reasonable value. The value VA will use for the loan. VA also uses it as the base for its 4 percent limit on seller concessions.
- Conditions. Repairs needed to meet minimum property requirements, required inspections, or other items that have to be cleared before closing.
- Property details such as the address and appraisal information that tie the notice to the case.
Read the conditions closely. They're the actual list. If a repair isn't on the notice, VA isn't requiring it, even if someone says "VA always wants that."
Minimum property requirements: safe, sound, sanitary
VA's minimum property requirements are about a home being safe, structurally sound, and sanitary. They cover things like a continuous supply of safe water, sanitary facilities, a safe method of sewage disposal, adequate heat, a roof that keeps out moisture, and safe access to the property. Cosmetic items like worn carpet or dated paint aren't the standard. A failed roof, exposed wiring, or an active leak can be.
If the notice lists a wood-destroying insect inspection as a condition, closing waits on that report. If the notice requires repairs, they're usually completed and verified before closing. VA also allows a veteran to ask to waive certain minimum property requirement repairs listed on the notice, with the lender's agreement, as long as the home is still habitable from the standpoint of safety, structural soundness, and sanitation. See lender-required repairs.
Before the value is final: the Tidewater procedure
VA's Tidewater procedure gives the deal a chance before a low value is locked in. On a purchase, if the appraiser sees that the value is likely to come in below the sales price, the appraiser notifies the requester and allows 2 business days for additional sales data to be submitted. That usually means your agent and the listing agent pull comparable sales with the address, price, sale date, and square footage. The appraiser then notes whether each sale was considered and how it affected the value.
Use Tidewater when there are real comparable sales the appraiser may have missed. It isn't a negotiation and it isn't a place for pressure.
After the value is final: reconsideration of value
Once the Notice of Value is issued, the veteran can request a reconsideration of value (ROV) in writing, usually through the lender, with supporting data such as market sales or information about the property. VA says that within 5 business days, its staff reviews the appraisal, the new data, and the market data in VA's Appraisal Management System. If VA concludes a higher value is supported, it issues an amended NOV. An ROV can raise the value, but it isn't guaranteed to, so plan your contract timeline with that in mind.
If the value comes in low
VA's rule in 38 CFR 36.4339 is that, with limited exceptions such as certain energy efficient improvements, the loan can't exceed the reasonable value, and you certify that you're paying any difference between the price and the value in cash from your own resources. That leaves a few paths:
- The seller lowers the price to the value, or partway.
- You pay the gap in cash. It has to be your own funds, and it isn't something a seller concession can cover.
- Request reconsideration if strong comparable sales support a higher value.
- Walk away. VA requires a contract signed before you received the value to include an option clause, sometimes called the VA escape clause or amendatory clause, which says you won't forfeit earnest money or be obligated to buy if the price exceeds VA's reasonable value, while still letting you choose to proceed (38 CFR 36.4303). In Texas, Paragraph 4 of the TREC Third Party Financing Addendum (TREC No. 40-11) carries this VA language, says any excess you choose to pay must be cash you disclose to VA and not borrowed funds unless VA approves, and lets the seller reduce the price to the VA value.
For the broader picture across loan types, see what to do if the appraisal comes in low.
How the NOV connects to the rest of your VA loan
- Seller concessions: VA limits concessions to 4 percent of the reasonable value on the NOV. Normal closing-cost credits don't count toward that limit. See seller concessions.
- Down payment: with full entitlement, you can buy with no down payment if the price doesn't exceed the value.
- Funding fee: it's figured on the loan amount, which the value can affect.
See VA home loans for how entitlement and the rest of the program fit.
Fictional example
This example is made up to show how the pieces fit.
Derek is buying a home in Fort Worth with a VA loan and no down payment. The appraiser contacts the lender under Tidewater because the value looks likely to come in below the price. Derek's agent sends three recent nearby sales within the 2 business days. The appraiser considers them, and the final value is higher than first expected but still below the price. The NOV also lists a wood-destroying insect inspection and a repair to a leaking water heater as conditions. Derek has two separate problems. The inspection and repair are conditions to clear before closing. The value gap is a contract issue between Derek and the seller. The seller agrees to lower the price to the value, the seller repairs the water heater, the inspection report comes back clean, and the loan closes.
Common mistakes and myths
- "VA requires a perfect house." The standard is safe, structurally sound, and sanitary, plus the conditions actually written on the notice.
- "The lender can order a new appraisal if we don't like the value." The lender can't shop for a value. The paths are Tidewater before it's final and reconsideration after.
- "The VA appraisal replaces my inspection." It doesn't. It's for VA, not for you.
- "The seller can cover the gap with a concession." The gap between price and value has to come from your own cash or a price change.
- "The NOV and a conventional appraisal are the same thing." Both estimate market value, but the NOV also carries VA's property conditions and controls VA's loan limit and concession cap.
- "Repair everything the inspector found because VA will ask." Read the notice. VA requires what's on it.
What to have ready
- Your Certificate of Eligibility and a signed contract that includes the VA option language.
- Your agent ready to pull comparable sales quickly if Tidewater is triggered.
- Your inspection report, so you can compare it with any NOV conditions.
- Room in your contract timeline for repairs, re-inspection, or a reconsideration.
Next step
Writing a VA offer in a competitive market? Let me walk you and your agent through Tidewater, repair conditions, and what happens if the value comes in short, before you sign. Schedule a call, or when you're ready, start an application.
Related questions
Sources
Links checked Oct 21, 2026.
- VA Loan Guaranty Service bulletin, VA Appraisal Policies (repair waivers, Tidewater procedure, reconsideration of value; Dec 16, 2021, citing VA Lenders Handbook Ch. 10 Topics 8 and 22 and Ch. 12 Topic 44): https://content.govdelivery.com/accounts/USVAVBA/bulletins/300ac69
- VA 2023 Loan Guaranty Conference, SAR Training (Tidewater data, reconsideration, minimum property requirements): https://www.benefits.va.gov/HOMELOANS/documents/conf/2023-sar-training.pdf
- VA Appraisal Fee Schedules and Timeliness Requirements (Houston RLC covers Texas; future table effective May 1, 2026): https://www.benefits.va.gov/homeloans/appraiser_fee_schedule.asp
- 38 CFR 36.4339, Eligibility of loans; reasonable value requirements; 36.4303, contract option clause; 36.4347, Lender Appraisal Processing Program (eCFR, current): https://www.ecfr.gov/current/title-38/chapter-I/part-36
- TREC Third Party Financing Addendum, TREC No. 40-11, Paragraph 4: https://www.trec.texas.gov/sites/default/files/pdf-forms/40-11.pdf
- VA, Funding fee and closing costs (4 percent concession limit based on reasonable value; page updated Oct 5, 2026): https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/
About the author: McKade Lively, NMLS 2704474, American Pacific Mortgage Corporation dba True North Home Loans, NMLS 1850.
Equal Housing Opportunity.
Last reviewed: Oct 2026