HELP!! Market Rent Appraisal LOW, contingency already removed

[Patrick Senas]

I need advice!!

On Aug 3, I removed all contingencies because my loan officer said that everything checked out on the appraisal he received from the VA. He wasn't allowed to show the appraisal until the VA "cleared" it to be released. A few days after contingencies were already removed he sent over the appraisal. The purchase price is at $535k and it assessed for $555k. Great. My issue is with the market rent the appraiser put for both units.

When we initially submitted the duplex to the lender as "the one", my realtor advised him that the nicer unit can go for $1850. Which is the number that we've been using for qualifying income. The front unit is dated and the appraiser set market at $1200. The updated unit with a private yard and a ~420 sq ft covered patio was set at $1250. They must be out of their mind. They didn't even use comps, they probably just used rentometer and ran with it.

My lender didn't catch that when he told me to remove contingencies. Close of escrow is on 8/16 but now the lender is telling me the underwriter is pushing back because of the market rent set by the appraiser. With the smaller qualifying rent it pushes my DTI ratio too high. I'm already putting $39k for a down payment on a VA loan and I can't provide anymore than that to lower the loan amount.

What can I do here? I need to close escrow or else I lose my $10k EMD. Is the lender liable or am I just screwed because he missed that one line item?? If only he gave us the appraisal when he received it, maybe we would've caught it. Why do I have to wait for the appraisal to be released when I freaking paid for it?!