Can a buyer waive the appraisal contingency on an FHA or VA loan?

No. And this matters more than most sellers realize, because buyers and their agents sometimes write language into offers that makes it look like they're waiving the appraisal protection on a government-backed loan. They are not. Federal law overrides any custom contract language on FHA and VA transactions.

Here's the specific mechanism. Every FHA and VA transaction requires a document called the FHA/VA Amendatory Clause, also referred to as the Federal Escape Clause. This federally mandated addendum states that regardless of what other terms are written into the sales contract, the buyer cannot be forced to complete the purchase and cannot forfeit their earnest money deposit if the property appraises below the agreed purchase price.

So when a buyer writes "buyer waives appraisal contingency" into an FHA offer, that clause has no legal force. If the home appraises $20,000 below the contract price, the buyer can walk away, demand every dollar of their earnest money back, and leave you with a canceled deal, time lost on the market, and a low appraisal tied to your address for six months.

VA loans work the same way. A VA loan is backed by the Department of Veterans Affairs, and the same federal protection applies. A veteran buyer writing an appraisal waiver into a VA offer is writing something that federal regulation will not honor. The escape clause supersedes it.

What this means practically: When you receive an FHA or VA offer with written language suggesting the buyer is waiving the appraisal, do not treat that language as meaningful contract protection. Assume the appraisal condition is fully active regardless of what the offer says. Price your home based on what you believe it will appraise for, not what you hope a buyer will pay. If there's a gap between your asking price and what the market will support at appraisal, that gap becomes your problem when the transaction involves a government-backed loan.

The safest approach with FHA or VA offers above your asking price: confirm the buyer has documented cash reserves to cover the difference between the contract price and a potential lower appraised value before you go under contract. If they don't have it, you're taking on that risk with no enforceable protection.