The appraisal came in below the purchase price
My appraisal came in low — what are my options?
A low appraisal changes the number the lender will lend against, not the price on the contract — that gap has to be resolved one of a few specific ways.
- A recalculated loan amount at the appraised value, or a renegotiated purchase price The loan amount a lender will fund follows the lower of purchase price or appraised value, so a low appraisal changes what's fundable regardless of the contract price.
- Assuming the lender will fund against the contract price anyway Lenders size the loan off the appraised value when it comes in under the contract price, not off what the buyer agreed to pay.
Lenders in the directory
No lender here publishes a rule for this
This is an underwriting judgment, not a published threshold. None of the 37 lenders in the directory states a policy on it, so there is no honest way to build a shortlist — and a list computed only from which products a lender writes would tell you nothing you could act on.
What matters here is how the file is presented rather than which lender receives it. The sections below cover that. When you are ready to approach lenders, the directory shows what each one does publish, with the date it was verified.
What actually changed
The loan-to-value calculation now runs off the lower appraised figure. At the same leverage percentage, the loan amount available is smaller than it was under the contract price — the shortfall is the gap between the contract price and the appraised value, scaled by the loan's leverage.
The realistic options
Bring additional cash to close to cover the gap, renegotiate the purchase price with the seller toward the appraised value, dispute the appraisal through a formal reconsideration if there's a specific, supportable basis to, or exercise an appraisal contingency to walk away if the contract allows it.
What a reconsideration of value actually requires
An appraisal reconsideration of value needs comparable sales the appraiser didn't use or a factual error in the report — simple disagreement with the number generally isn't enough on its own.
DSCR gets recalculated too
A smaller loan amount at the same rent can actually improve the DSCR ratio, since debt service goes down while rent stays the same — sometimes the one upside of a lower loan amount that's worth checking before assuming the deal is worse off.
What to have ready
- A copy of the full appraisal report to review for errors or omitted comparables
- A clear number for how much additional cash could be brought to close, if any
- Confirmation of what the purchase contract's appraisal contingency actually allows
- An updated DSCR calculation at the lower loan amount
Questions
Will the lender fund the original loan amount if I make up the difference in cash?
How long does an appraisal reconsideration take?
Does a low appraisal always mean the deal is dead?
Terms used on this page
- Appraisal Reconsideration of Value (ROV) — A reconsideration of value, or ROV, is a formal request asking an appraiser to revisit a figure on a completed appraisal — typically the value, but sometimes a rent opinion — using additional data or pointing out a factual error.
- Debt Service Coverage Ratio (DSCR) — DSCR is a property’s gross monthly rent divided by its total monthly mortgage payment. A DSCR of 1.00 means the rent exactly covers the payment; 1.25 means rent exceeds the payment by 25%.
- Comparable Rent Schedule — A comparable rent schedule is the appraisal method of estimating a property’s market rent by identifying similar rented properties nearby, adjusting their rents for differences, and reconciling them into a single opinion. On one-unit properties this method is formalized as Form 1007; on two-to-four unit properties it is built into Form 1025.