Have you stumbled across the term ‘Tidewater’ in reference to an appraisal while researching VA home loans? We are here to help walk you through the ins and outs of VA financing and decipher all the intimidating jargon. As industry leaders, we are well-versed in the nuances of VA loans, including VA appraisals.
What is a VA Loan?
A VA loan is a government-backed mortgage specifically designed for veterans and surviving spouses. The U.S. Department of Veteran Affairs (VA) guarantees all VA loans, which give them beneficial characteristics like low rates, 0% down payments, and extremely flexible credit underwriting guidelines.
What is Tidewater for a VA Appraisal?
VA home loan guidelines require an appraiser to call “Tidewater” anytime their assessment of value comes in lower than the sales price on any given transaction. This process can also be referred to as “initiating Tidewater.”
Unlike a typical appraisal process, the VA Tidewater process allows the involved parties to provide additional comparable sales or market data before the final appraised value is established. Once Tidewater is initiated, the lender has 48 hours to provide additional market data to help support the purchase price shown on the sales contract.
Do all VA Appraisals have Tidewater?
No, the Tidewater process is initiated only when the appraiser’s assessment of property value is lower than the sales price associated with our transaction.
If an appraiser completes their inspection and the value either supports or exceeds the purchase price, Tidewater is not initiated.
How Does the VA Tidewater Process Differ From the Standard Appraisal Process?
When appraising a property (for both VA and standard appraisals), an Appraiser reviews market data for comparable sales or ‘comps’ to make their determination of a home’s value.
On a non-VA transaction, depending on the recent market comps available for the Appraiser’s review, the completed Appraisal may be submitted with a value under the sales contract price without warning.
With VA financing, if the appraiser’s assessment of value does not support our purchase price, the Appraiser is required to alert the lender of ‘Tidewater’ before submitting their report. With their notice, they are required to include an explanation showing the recent home sales they are reviewing as comps and showing how the transaction’s sales price is not supported.
After Tidewater notice is given, the agents and lender have 48 hours to provide additional comparable sales or relevant information to support the purchase price. The Tidewater process, in essence, adds an extra layer of protection and communication between the buyer, seller, and the VA.
Why Is the Tidewater Process Significant for Your Home Purchase?
Think of the VA appraisal Tidewater process as a safety net for your home purchase. When Tidewater is initiated, it gives all parties the chance to provide additional market data to support the sales price before the appraisal report is completed with a low value. This helps expedite the process of reconsidering value, if better market comps are available.
On non-VA transactions, once an appraiser brings in an appraisal with a low value, the lender must submit a reconsideration of value in order to provide additional market data in hope of increasing the appraised value. This process tends to take much longer than when the data is provided as a part of Tidewater.
How Does JVM Lending Play a Role in VA Tidewater Appraisals?
Our team at JVM Lending understands the intricacies of Tidewater for VA loans. Our appraisal process works hand-in-hand with buyers, sellers, and real estate agents to ensure prompt communication and guidance in the event that we receive a Tidewater notice. Our team is well versed in explaining why the appraiser brought in value where they did and adept in aiding in the gathering of additional market data to help support the appraiser’s assessment of your home.
Contact JVM Lending’s Team of VA Experts!
Pursuing a home loan in the current market can be an overwhelming experience. Pursuing VA financing can sometimes add another layer of complexity that a lender needs to be well versed in home-buying. At JVM Lending, we are experienced with VA financing and are here as a resource to help guide you through your purchase or refinance. Buying a home is a significant milestone, and we’re here to ensure your journey is seamless and informed.
For additional information about getting pre-approved for a VA loan or the VA Tidewater appraisal process, contact our team of experts!
