diff --git a/routing/localchans/manager.go b/routing/localchans/manager.go
index 25df1002a..5b35b346b 100644
--- a/routing/localchans/manager.go
+++ b/routing/localchans/manager.go
@@ -39,7 +39,7 @@ type Manager struct {
 		edgesToUpdate []discovery.EdgeWithInfo) error
 
 	// ForAllOutgoingChannels is required to iterate over all our local
-	// channels.
+	// channels. The ChannelEdgePolicy parameter may be nil.
 	ForAllOutgoingChannels func(cb func(kvdb.RTx,
 		*models.ChannelEdgeInfo,
 		*models.ChannelEdgePolicy) error) error
@@ -82,6 +82,7 @@ func (r *Manager) UpdatePolicy(newSchema routing.ChannelPolicy,
 	var edgesToUpdate []discovery.EdgeWithInfo
 	policiesToUpdate := make(map[wire.OutPoint]models.ForwardingPolicy)
 
+	// NOTE: edge may be nil when this function is called.
 	processChan := func(
 		tx kvdb.RTx,
 		info *models.ChannelEdgeInfo,
@@ -99,7 +100,9 @@ func (r *Manager) UpdatePolicy(newSchema routing.ChannelPolicy,
 		delete(unprocessedChans, info.ChannelPoint)
 
 		// Apply the new policy to the edge.
-		err := r.updateEdge(tx, info.ChannelPoint, edge, newSchema)
+		edge, err := r.updateEdge(
+			tx, info.ChannelPoint, edge, newSchema,
+		)
 		if err != nil {
 			failedUpdates = append(failedUpdates,
 				makeFailureItem(info.ChannelPoint,
@@ -306,10 +309,26 @@ func (r *Manager) createEdge(channel *channeldb.OpenChannel,
 	return info, edge, nil
 }
 
-// updateEdge updates the given edge with the new schema.
+// updateEdge updates the given edge with the new schema. The edge parameter may
+// be nil, in that case a new channel policy is returned. In other cases the
+// passed in channel policy is returned after modification.
 func (r *Manager) updateEdge(tx kvdb.RTx, chanPoint wire.OutPoint,
 	edge *models.ChannelEdgePolicy,
-	newSchema routing.ChannelPolicy) error {
+	newSchema routing.ChannelPolicy) (*models.ChannelEdgePolicy, error) {
+
+	channel, err := r.FetchChannel(tx, chanPoint)
+	if err != nil {
+		return nil, err
+	}
+
+	// If due to some unforeseen circumstances the policy doesn't exist,
+	// recreate it here.
+	if edge == nil {
+		_, edge, err = r.createEdge(channel, time.Now())
+		if err != nil {
+			return nil, err
+		}
+	}
 
 	// Update forwarding fee scheme and required time lock delta.
 	edge.FeeBaseMSat = newSchema.BaseFee
@@ -318,7 +337,7 @@ func (r *Manager) updateEdge(tx kvdb.RTx, chanPoint wire.OutPoint,
 	)
 
 	// If inbound fees are set, we update the edge with them.
-	err := fn.MapOptionZ(newSchema.InboundFee,
+	err = fn.MapOptionZ(newSchema.InboundFee,
 		func(f models.InboundFee) error {
 			inboundWireFee := f.ToWire()
 			return edge.ExtraOpaqueData.PackRecords(
@@ -326,15 +345,15 @@ func (r *Manager) updateEdge(tx kvdb.RTx, chanPoint wire.OutPoint,
 			)
 		})
 	if err != nil {
-		return err
+		return nil, err
 	}
 
 	edge.TimeLockDelta = uint16(newSchema.TimeLockDelta)
 
 	// Retrieve negotiated channel htlc amt limits.
-	amtMin, amtMax, err := r.getHtlcAmtLimits(tx, chanPoint)
+	amtMin, amtMax, err := r.getHtlcAmtLimits(channel)
 	if err != nil {
-		return err
+		return nil, err
 	}
 
 	// We now update the edge max htlc value.
@@ -367,19 +386,19 @@ func (r *Manager) updateEdge(tx kvdb.RTx, chanPoint wire.OutPoint,
 	// Validate htlc amount constraints.
 	switch {
 	case edge.MinHTLC < amtMin:
-		return fmt.Errorf(
+		return nil, fmt.Errorf(
 			"min htlc amount of %v is below min htlc parameter of %v",
 			edge.MinHTLC, amtMin,
 		)
 
 	case edge.MaxHTLC > amtMax:
-		return fmt.Errorf(
+		return nil, fmt.Errorf(
 			"max htlc size of %v is above max pending amount of %v",
 			edge.MaxHTLC, amtMax,
 		)
 
 	case edge.MinHTLC > edge.MaxHTLC:
-		return fmt.Errorf(
+		return nil, fmt.Errorf(
 			"min_htlc %v greater than max_htlc %v",
 			edge.MinHTLC, edge.MaxHTLC,
 		)
@@ -388,19 +407,14 @@ func (r *Manager) updateEdge(tx kvdb.RTx, chanPoint wire.OutPoint,
 	// Clear signature to help prevent usage of the previous signature.
 	edge.SetSigBytes(nil)
 
-	return nil
+	return edge, nil
 }
 
 // getHtlcAmtLimits retrieves the negotiated channel min and max htlc amount
 // constraints.
-func (r *Manager) getHtlcAmtLimits(tx kvdb.RTx, chanPoint wire.OutPoint) (
+func (r *Manager) getHtlcAmtLimits(ch *channeldb.OpenChannel) (
 	lnwire.MilliSatoshi, lnwire.MilliSatoshi, error) {
 
-	ch, err := r.FetchChannel(tx, chanPoint)
-	if err != nil {
-		return 0, 0, err
-	}
-
 	// The max htlc policy field must be less than or equal to the channel
 	// capacity AND less than or equal to the max in-flight HTLC value.
 	// Since the latter is always less than or equal to the former, just
diff --git a/server.go b/server.go
index aaf3c0dfe..d825204e3 100644
--- a/server.go
+++ b/server.go
@@ -1098,11 +1098,25 @@ func newServer(cfg *Config, listenAddrs []net.Addr,
 		ScidCloser:              scidCloserMan,
 	}, nodeKeyDesc)
 
+	selfVertex := route.Vertex(nodeKeyDesc.PubKey.SerializeCompressed())
 	//nolint:lll
 	s.localChanMgr = &localchans.Manager{
-		SelfPub:                   nodeKeyDesc.PubKey,
-		DefaultRoutingPolicy:      cc.RoutingPolicy,
-		ForAllOutgoingChannels:    s.graphBuilder.ForAllOutgoingChannels,
+		SelfPub:              nodeKeyDesc.PubKey,
+		DefaultRoutingPolicy: cc.RoutingPolicy,
+		ForAllOutgoingChannels: func(cb func(kvdb.RTx,
+			*models.ChannelEdgeInfo, *models.ChannelEdgePolicy) error) error {
+
+			return s.graphDB.ForEachNodeChannel(selfVertex,
+				func(tx kvdb.RTx, c *models.ChannelEdgeInfo,
+					e *models.ChannelEdgePolicy,
+					_ *models.ChannelEdgePolicy) error {
+
+					// NOTE: The invoked callback here may
+					// receive a nil channel policy.
+					return cb(tx, c, e)
+				},
+			)
+		},
 		PropagateChanPolicyUpdate: s.authGossiper.PropagateChanPolicyUpdate,
 		UpdateForwardingPolicies:  s.htlcSwitch.UpdateForwardingPolicies,
 		FetchChannel:              s.chanStateDB.FetchChannel,