Real Estate Ray's Blog: Appraisal Waivers: What are They? Who's Eligible?

Appraisal Waivers: What are They? Who's Eligible?

A couple years ago, we were buying a house in Reno.  The market was hot and when the lender tried to schedule an appraiser, the first day an appraiser could be at the property was 30 days out, a problem because we had a 30 day escrow.  My local lender advised me to ask if a waiver was possible.  I asked the Reno lender about a waiver.  Let's just say there was a bit of good natured laughter.  I said please check.  A few minutes later, I received a call back.  Right in their paperwork, appraisal waived.  It saved me heartache and a few bucks.  It never hurts to ask.  I have personally received two appraisal waivers.  Great article below by Gene Mundt.


Appraisal Waivers:

What are They? Who's Eligible?


Many changes surrounding residential appraisals have occurred recently.  Some have come as a response to the challenges presented by Covid-19.  Others were put into place prior to our facing current viral challenges.


In this article, I address only those changes made to appraisal requirements and options for Conforming Conventional Loans.  The following are what "Appraisal Options" can mean in
those specific cases.

First, it should be pointed out before proceeding: No two loans (or borrower(s) are the same, so no blanket-statement can be made or cover every situation or appraisal requirements required in every transaction. Each scenario must be considered singularly and upon its own merit.

So to simplify things a bit, moving forward I will reference only those conventional loans being placed, sold, and guaranteed by Fannie Mae or Freddie Mac
(Originally these guidelines were good on loan applications through May 17, 2020, but just recently they were extended to June 30, 2020.

Certain conventional loans can receive an "Appraisal Waiver" ... when either the Property Price (for purchases) or Estimated Value (for Refinances) ... is found to be acceptable, and in the Range of Values within the massive databases, for that property.  

The notations received in Automated Underwriting can allow for a loan to be approved and successfully Closed without an appraisal being performed.  Please note, however, that only a small percentage of Loans with less than 20% down receive this "Waiver of Appraisal".
Transactions that do not receive an Appraisal Waiver from the automated underwriting systems, require some sort of physical appraisal to be made.  
Those appraisals can be:

  • A Desktop Review (No Inspection)
  • Exterior Appraisal Only (No need to enter the home)
  • A traditional Appraisal 

The obvious next question then becomes ... 
"When does each various type of appraisal become applicable?"     


     A.  Purchase Transactions - Principal Residence up to 97% Loan-To-Value, allows the following:
     1.  Traditional Appraisal - (Full Report, Appraiser, Inspections)
     2.  Desktop Appraisal - Appraiser does NOT inspect the interior.  The Appraiser completes a Standard Appraisal Form with the benefit of public records, multiple listing service (MLS) information, and on-line/third-party sources to help identify the property characteristics
     3.  Exterior Only Appraisal - The name pretty much speaks for itself.  It's the least invasive form of appraisal report performed without an Appraiser's personal inspection
   Note: Mortgage Lenders can be exposed to scrutiny when accepting "less than" a full traditional Appraisal Report when selling the loan in the secondary market. So expect Lenders to remain cautious in this regard.
     B.  Refinance Transactions - Principal Residence, allows the following:
     1.  Either an Appraisal Waiver (None Required) or a Traditional Appraisal is required ... in most cases.
The following property types are eligible for Appraisal Waiver use:


  • Single-Family Units, whether they be detached single-family residences, attached townhomes, or condominiums, are the primary properties eligible for Appraisal Waivers
  • Investment Properties (meeting the above criteria) can also receive Appraisal Waivers at lower Loan-To-Value percentages
  • Second Homes are also eligible for Appraisal Waivers if they meet the above-mentioned criteria 


Once again, the above are only guidelines, and individual Mortgage Lenders may institute or remain cautious regarding their own requirements on appraisals.  

However, the overriding message is ... the mortgage industry is trying hard to provide some flexibility and relief during the uncertain times we are currently facing. Staying responsive to the needs of borrowers remains a positive and prime focus and is especially warranted during this challenging time.
* Are you dreaming of buying or refinancing a home or Investment Property in New Lenox - Will County - Chicago - Chicagoland - IL/WI? 

Contact me today! I'll put my 40 years of mortgage experience and expertise to work on your behalf.

I'm easily found at:
Gene Mundt
Mortgage Originator - NMLS #216987 - IL Lic. 031.0006220 - WI License #216987
American Portfolio Mortgage Corp
NMLS #175656
Direct: 815.524.2280
Cell: 708.921.6331
eFax: 815.524.2281



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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

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Comment balloon 13 commentsRaymond Henson, SRES, GRI • May 15 2020 02:35PM


I had never heard of an appraisal waiver Raymond Henson, SRES, GRI thank you for reblogging Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi 

Posted by Doug Dawes, Your Personal Realtor® (Keller Williams Realty - Topsfield, MA) 7 months ago

Yes, Doug Dawes, I was shocked when I found out it was possible.  It may have saved my Reno transaction.  Thank you for your input. 

Posted by Raymond Henson, SRES, GRI, Realtor (eXp Realty of California, Inc. (lic. #01878277)) 7 months ago

Good morning, Raymond Henson, SRES, GRI great choice for a reblog....we haven't run into needing this.... and I'll leave a comment on the original post.... 

Posted by Barbara Todaro, Previously Affiliated with The Todaro Team (RE/MAX Executive Realty - Retired ) 7 months ago

Good Morning, Barbara Todaro, thank you for rewarding Gene Mundt for his hard work.

Posted by Raymond Henson, SRES, GRI, Realtor (eXp Realty of California, Inc. (lic. #01878277)) 7 months ago

Good Morning Raymond, good reblog and something to earn more about for the coming years.


Posted by Will Hamm, "Where There's a Will, There's a Way!" (Hamm Homes) 7 months ago

As you say, never hurts to ask, and these have become more common during the pandemic. 

Posted by Nick Vandekar, 610-203-4543, Tredyffrin Easttown Realtor, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) 7 months ago

Thank you for sharing this info with your readers Raymond Henson, SRES, GRI ... it's appreciated.  Your added personal experience highlights just how "local" and personal real estate and lending has become.  Each transaction, in this case, must be weighed on its own merit ... as was yours.

Thank you again ...


Posted by Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi, 708.921.6331 - 40+ yrs experience (NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656) 7 months ago

Will Hamm, we always have to keep moving forward.

Nick Vandekar, 610-203-4543, I wear people out with all my questions.  I have a listing right now that is a desktop review.  That one makes me a little nervous.  The house has a lot of charms that could be missed by only looking at the pictures and 3D tour.

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi, I think what surprised me is that one really good lender knew and one really good lender did not know.  It just highlights the importance of having a network of good people around you.  Thanks again for the really informative blog. 

Posted by Raymond Henson, SRES, GRI, Realtor (eXp Realty of California, Inc. (lic. #01878277)) 7 months ago

Good evening Raymond Henson, SRES, GRI - this is certainly new information but Gene explains it well.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) 7 months ago

Grant Schneider , I agree 100%.  Thank you for your input.  Hope you have a nice weekend.

Posted by Raymond Henson, SRES, GRI, Realtor (eXp Realty of California, Inc. (lic. #01878277)) 7 months ago

I think it is funny that they laughed at you and then found out it could be done, haha.

Posted by Brian England, MBA, GRI, REALTOR® Real Estate in East Valley AZ (Vacasa) 7 months ago

Thank you very much for sharing this excellent reblog selection.

Posted by Roy Kelley (Realty Group Referrals) 7 months ago

Brian England, It was even in their own paperwork. To be fair, the was very new then and I can remember debating the merits of the program with my appraiser friend.  For low down payments, you have to have an appraisal, imho.  As the down payment gets higher, the appraisal is less important, especially if you have a solid real estate agent representing you.  The dilemma is always finding that right point and time.

Roy Kelley, Thank you!    

Posted by Raymond Henson, SRES, GRI, Realtor (eXp Realty of California, Inc. (lic. #01878277)) 7 months ago