If you want more information e-mail me at firstname.lastname@example.org or call at 925-335-6074 and I will give you the information.
Also, the reason I initially asked, whether you're purchasing an investment (rental/flip) or residence, is that you could do this deal with a hard money (for the rehab costs) first, and seller carry-back second--provided you're buying an investment property. Afterwards, you could refinance and rent, or flip to cash out the hard money and seller financing.
The first thing you should try to do is renegotiate with the seller(s). It could very well be the home and the area, not your loan that is the problem.
The second thing you can do is try to get another appraisal. The last thing you could try doing is to work with another lender, and start all over.
If I were you, I'd try to negotiate with the seller, if they said no, then I would tell them that you are willing to pay for another appraisal or another lender, but if the home still does not appraise, they will agree to sell if for less.
If you really like the home, your last option would be to make up the difference between the purchase price and the appraised price.
If you have any other questions, feel free to call or email me.
I assume you are talking about an FHA loan, as the criteria for these loans are more stringent, and depending upon what needs to be fixed, you may or may not be able to get the loan.
If it is a purchase, you can put more money down to get conventional financing, and in this case the criteria are less stringent.
If you can provide more specifics, I may be able to give you a better answer.
First of all, what was the price of the offer submitted? Were you approved at this amount?
Many times, especially with bank owned properties in poor condition, this occur's.
As long as the comp's can substantiate the price you should be okay. Most appraiser's look at the comp's plus the condtion of the property when submitting their appraisals. Any upgrades or amentities may be taken into consideration too.
I'm sure your agent comp'd the area before submitting an offer. Do they feel it will be a problem with your loan?