VA Tidewater Initiative & VA Appraisals: A Guide for Realtors and Borrowers

Welcome to 1st Choice Mortgage, Your Trusted Partner in VA Home Financing

At 1st Choice Mortgage, we understand the unique challenges and opportunities faced by veterans and active military members in securing home financing in Idaho. That's why we're proud to offer comprehensive resources on the VA Tidewater Initiative and VA appraisals. Whether you're a realtor looking to assist your clients or a borrower seeking to understand your options, we've got you covered.

Understanding the VA Tidewater Initiative

The VA Tidewater Initiative is a proactive approach by the Department of Veterans Affairs (VA) to prevent VA loan appraisals from coming in below the contracted sales price. This initiative allows for an open dialogue among the lender, real estate agent, and the VA appraiser if the appraiser believes the value of the property might come in lower than the sales price.

For Realtors: How You Can Help

As a realtor working with VA borrowers, you play a critical role in the Tidewater process. Here's how you can assist:

• Early Communication: Inform your buyers about the possibility and implications of the Tidewater Initiative early in the process.
• Gather Comparable Sales: Be prepared to provide comparable sales data to support the sales price if the Tidewater Initiative is invoked.
• Collaboration: Work closely with the lender and appraiser to address any concerns and facilitate a fair appraisal.

For Borrowers: What You Need to Know

Navigating the VA loan process can be daunting, but understanding the Tidewater Initiative can empower you as you move forward:

• Be Prepared: Understand that the Tidewater Initiative is in place to protect your interests and ensure you're getting a fair deal.
• Stay Informed: Keep in touch with your lender and realtor to stay updated on the appraisal process.
• Ask Questions: Don't hesitate to ask for clarification or support from your lender or realtor at any stage.

VA Appraisals: Ensuring Fair Value

VA appraisals are not just about determining the value of a property; they're also about ensuring the home meets the VA's minimum property requirements for safety and security. Here's what you need to know

:

• Timeline: VA appraisals are typically required completed within 10 business days, though times can vary based on location and appraiser availability.
• Safety First: The appraisal focuses on ensuring the property is safe, sound, and sanitary.
• Market Value: The appraiser will also determine the fair market value of the home to ensure the loan amount is appropriate.

Resources & Assistance

At 1st Choice Mortgage, we're dedicated to helping our clients through every step of the home financing process. If you have any questions about the VA Tidewater Initiative, VA appraisals, or any other aspect of VA loans, our Idaho team of experts is here to assist.

The VA Tidewater Initiative, also known as the Tidewater Process, is a unique feature of the VA loan appraisal process designed to provide a proactive solution when an appraiser indicates that the estimated value of a property might come in lower than the sales price agreed upon in a VA loan transaction. This process allows for early intervention to address valuation concerns before the appraisal is finalized, offering a potential path to resolution without the need for a formal appeal. Here's a breakdown of the Tidewater Process and what is required by each party involved:

The VA Tidewater Process:

1. Initial Appraisal Concerns:

•    The process begins when the VA appraiser cannot find enough evidence to support the sales price agreed upon in the contract.
•    The appraiser issues a Tidewater notice to 1st Choice Mortgage, indicating that the appraised value might come in lower than the sales price.
  • The VA Appraiser will not and cannot:
    • Indicate what price they have determined, only that it is lower than the purchase contract price.
    • Indicate what comparable they are currently using
    • Indicate what repairs, deficiencies they have found.

2. Notification and Response:

•    Upon receiving the Tidewater notice, the 1st Choice Mortgage informs the real estate agents (or directly the borrower if there's no agent) about the potential appraisal shortfall.
•    The parties involved, typically through the real estate agents, are given 48 hours (including holidays & weekends) to provide additional information to support the sales price. This may include recent comparable sales or additional information that the appraiser may or may not had considered.
  • If no data is provided to the VA appraiser within 48 hours, the appraiser will assume none is being provided and will publish the appraisal.
• It is up to the real estate agents to provide:
  • Additional comparables
  • Additional date on upgrades, features they used to determine the price of the home.
  • This form is provided for agents to use:  VA Tidewater Submission Form

3. Review of Additional Information:

•    The appraiser reviews the additional evidence provided to determine if it justifies adjusting the appraisal to meet or come closer to the sales price.
•    This is the critical phase where the appraiser reassesses their initial valuation based on new data.

4. Final Appraisal Decision:

•    After considering the additional information, the appraiser finalizes the appraisal report.
•    If the new evidence is sufficient to support the sales price, the appraiser may adjust the valuation accordingly.
•    If the evidence does not justify a higher valuation, the appraisal will reflect the appraiser's determined value, which may be below the sales price.
  • The VA Appraiser will comment on the additional data which was provided.

 Requirements by Each Party:

• VA Appraiser: Must initiate the Tidewater Process upon identifying a potential valuation shortfall and review any additional information provided within the given timeframe.
• Lender: Must quickly notify the appropriate parties about the Tidewater initiation and facilitate the submission of additional evidence to support the sales price.
• Real Estate Agents: Must gather and submit relevant, compelling evidence (e.g., comparable sales, corrections to data) to support the sales price within the 48-hour window.
• Seller: While directly not involved in the Tidewater Process, sellers may need to be flexible or negotiate further based on the outcome of the appraisal.

This process underscores the VA's commitment to ensuring fair valuation in VA loan transactions and provides an avenue for addressing valuation concerns before they become formal disputes.