VA appraisals are stricter than conventional appraisals on property condition — by design. The VA's Minimum Property Requirements (MPRs) are intended to ensure veterans don't end up with houses that pose safety, structural, or sanitation problems.1 The result: VA appraisals fail more often than conventional appraisals on the same homes, especially in San Diego's older housing stock and coastal humidity-heavy submarkets. Here's what causes most VA appraisal failures locally and how to handle each one when it happens.
VA appraisal vs. home inspection: not the same
The first thing to understand: a VA appraisal is not a home inspection. The appraiser checks two things — value and MPR compliance.2 The home inspector checks for everything else: HVAC efficiency, electrical panel adequacy, hidden mold, future maintenance issues. Most VA buyers should get both, even though only the appraisal is required.
What the VA appraisal does not catch: foundation cracks that aren't structural, outdated electrical panels that still function, deferred maintenance, cosmetic issues, future big-ticket repairs (roof replacement timing, HVAC end-of-life). Don't skip the inspection just because the appraisal happens.
The 5 most common San Diego VA appraisal failures
1. Roof condition
The single most common MPR failure in San Diego: the roof has visible damage, missing shingles or tiles, or evidence of leaks. The VA appraiser is required to note any defects visible from the ground or from inside the attic — and if visible water staining, soft spots, or active leaks exist, the appraisal becomes "subject to" repair.
San Diego specifics:
- Tile roofs (common in the older housing stock) frequently fail because of cracked or missing tiles after 30+ years.
- Flat or low-slope roofs in coastal areas show wear from sun and salt air more rapidly than inland.
- Roofs with less than 2 years of remaining life can flag as MPR concerns even if not actively leaking.
Resolution: seller repairs the roof, or buyer pays for repairs (if the lender allows), or a price reduction is negotiated and a roof certification from a licensed roofer is provided to the appraiser.
2. Termite damage or active infestation
San Diego County is in a "moderate to heavy" termite probability zone, and termite inspections are required on most VA loans here. Active infestations or significant past damage from drywood or subterranean termites must be remediated before closing.3
The VA Form 26-8791 (Wood Destroying Insects Inspection Report) is typically completed by a state-licensed pest control company. Two outcomes:
- Section I clear: No active infestation, no significant damage. Loan proceeds.
- Section II findings: Active infestation or significant damage. Treatment and/or repair required before closing.
In California, sellers customarily pay for termite inspection and Section I clearance treatment. Section II repairs are negotiable. Plan for $1,500-$5,000 in termite-related costs being part of the typical SD VA transaction.
3. Foundation issues
Foundation problems are the most consequential VA MPR failure because they're often expensive to fix. Common San Diego foundation issues:
- Hillside settlement in older La Mesa, El Cajon, and Mission Hills properties built on slopes.
- Soil expansion damage in areas with clay soils — foundation cracks from seasonal wet/dry cycles.
- Earthquake retrofit deficiencies in homes built before 1980 that lack proper bolting or cripple wall bracing.
The VA appraiser may flag visible cracks larger than 1/4 inch, evidence of differential settlement (uneven floors, sticking doors), or visible foundation deterioration. Resolution typically requires a licensed structural engineer's assessment and remediation by a foundation contractor — work that can cost $10,000-$50,000+ and add weeks to the timeline.
4. Peeling paint and lead-based paint hazards
Homes built before 1978 may have lead-based paint. The VA requires that any peeling, chipping, or scaling paint on these homes be addressed — both inside and outside.2 The remediation usually involves scraping loose paint and repainting; full lead abatement is required only when the paint is actively peeling and inaccessible to children.
San Diego specifics: many of the older homes in central San Diego (North Park, Hillcrest, Mission Hills, Kensington) are pre-1978 and frequently have peeling paint on eaves, window sashes, and exterior trim from the coastal weather. Resolution typically costs $1,500-$5,000 for proper paint remediation.
5. Wood rot and pest-related structural damage
Coastal San Diego's humidity makes dry rot and wood-destroying organisms more common than in drier markets. Common findings:
- Eaves and fascia boards with visible rot
- Decks with rotted joists or posts
- Door and window frames with water damage
- Subfloor damage from leaks
The VA appraiser flags any of these as MPR concerns. Resolution depends on extent — minor fascia board replacement is a $500 fix; substantial subfloor or framing replacement can run $5,000-$20,000.
The Notice of Value (NOV)
After the VA appraisal, the lender issues a Notice of Value (NOV) — the formal document setting the property's value for VA loan purposes and listing any MPR repair conditions.4 Three possible NOV outcomes:
- Clean NOV: Property meets MPRs at appraised value. Loan proceeds normally.
- NOV "subject to" repairs: Property meets MPRs only after specific repairs. Repairs must be completed and re-inspected before closing.
- Low appraised value: Property meets MPRs but appraised below contract price. Loan amount capped at appraised value.
The NOV is valid for 6 months. If the loan doesn't close within that window, a new appraisal is required.
NOV "subject to" repair conditions can sometimes be waived if the property is already deemed safe, structurally sound, and sanitary, and the lender agrees. Buyers can request an MPR waiver from the VA, providing a licensed contractor's inspection report supporting the waiver. Approval isn't automatic — and most lenders won't accept the waiver because they bear the risk if anything goes wrong before repairs are complete — but it's a real option for marginal MPR conditions where the property is genuinely habitable.
Low VA appraisal: 4 paths forward
If the appraised value comes in below the contract price, you have four options:
1. Reconsideration of Value (Tidewater Process)
The VA's "Tidewater" procedure gives the buyer 2 days after receiving the NOV to submit additional comparable sales data supporting the original contract price.2 Each comparable must include:
- Address and sale date
- Sale price
- Gross living area
- Lot size, condition, and other comparable factors
- Why this comparable supports a higher value
Successful Reconsideration of Value requests typically involve recent comparable sales the appraiser missed or weighted incorrectly. Most are submitted by the listing agent (who has the most market knowledge), but the buyer's agent or buyer can file. Approval rates run 20-40% — meaningful but not high.
2. Renegotiate the price
Most common path. The seller agrees to lower the contract price to the appraised value, and the deal closes at the lower price. Listing agents often accept this when their property has been on market for 30+ days.
3. Buyer covers the gap with cash
The VA loan amount is capped at the appraised value, but the buyer can bring additional cash to closing to make up the difference. Full math on appraisal gap mechanics here.
4. Cancel the contract
The VA "escape clause" — required language in every VA purchase contract — gives the buyer the right to cancel without losing earnest money if the property appraises below contract price.2 This is a stronger protection than the standard appraisal contingency on conventional loans.
How to reduce the chance of VA appraisal problems
Five preventive moves:
- Use a VA-experienced agent. They'll spot likely MPR issues during showings and steer you away from properties guaranteed to fail. The cost differential of switching agents is zero; the value of avoiding 2-week delays mid-escrow is significant.
- Get a pre-offer home inspection on properties you're seriously considering, before going under contract. $400-$600 spent here can save weeks of escrow drama.
- Avoid properties with obvious MPR red flags: peeling exterior paint on pre-1978 homes, visible roof damage, exposed wood rot, cracked foundations. These are visible during a showing and predict appraisal problems.
- Allow time in your contract for repairs. Standard 30-day VA closings can compress badly when MPR repairs are required. 35-45 day timelines build in cushion.
- Verify utilities are on at the time of appraisal. If utilities are off, the appraiser may not be able to confirm system function — leading to "subject to" conditions on items that work fine but couldn't be tested.
The "VA appraisals delay closings" myth
Listing agents sometimes reject VA offers because they think VA appraisals slow closings. The truth: VA appraisal turnaround time in San Diego County typically runs 7-14 days, similar to FHA and slightly slower than conventional. The appraisal itself isn't usually the delay — it's the repair contingency timeline when MPR issues come up.
For a clean property with no MPR issues, VA appraisals don't slow closings at all. For a property with issues, conventional appraisals would have flagged the same issues anyway (just with less detailed documentation). The VA loan didn't cause the problem; the property did.
Run a VA scenario including appraisal contingency.
Open the calculator →The honest read
The VA's MPR requirements feel like an obstacle when they fail your dream property — but they exist for a reason. The veteran who avoids buying a house with rotted subflooring or active termite damage is better off than the one who buys it and discovers the problems three years later. Work with VA-experienced professionals who understand what to look for, get a real home inspection in addition to the VA appraisal, and don't fight against MPR repair requirements that flag genuine safety issues. The VA appraiser is on your team, even when it doesn't feel like it.
VA MPR specifics vary by property and appraiser. Always work with a VA-experienced lender and agent. Educational content only — not legal, tax, or financial advice.
References
- U.S. Department of Veterans Affairs. (n.d.). VA Pamphlet 26-7: Lenders Handbook, Chapter 12: Minimum Property Requirements. Retrieved April 28, 2026, from https://www.benefits.va.gov/WARMS/docs/admin26/m26-07/Ch12_Minimum_Property_Requirement_NEW.pdf
- Veterans United. (2026). VA loan inspection requirements: The complete list of the VA MPRs. Retrieved April 28, 2026, from https://www.veteransunited.com/valoans/understanding-the-vas-minimum-property-requirements/
- Fairway Independent Mortgage. (n.d.). VA home loan property requirements: A-to-Z guide. Retrieved April 28, 2026, from https://www.fairway.com/articles/va-home-loan-property-requirements-mprs-a-to-z-guide
- Veterans United. (2026). An in-depth look at the VA appraisal. Retrieved April 28, 2026, from https://www.veteransunited.com/education/processing/