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How to Get an Appraisal Waiver for a Conventional Loan

Homebuyers can save time and money with appraisal waivers in real estate and mortgage processing.

A key part of the process is Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs) in the mortgage market.

This guide will help you maximize the chance that you get an appraisal waiver, focusing on the impact of leveraging Zip+4 for eligibility and the broader implications for borrowers and lenders alike.

What Are Appraisal Waivers?

Appraisal waivers eliminate the need for a physical appraisal, so a mortgage can go through based on assessed value.

Fannie Mae and Freddie Mac offer these waivers under specific circumstances. Waivers save borrowers money on appraisal fees and time, so they're popular with borrowers.

Both Fannie Mae and Freddie Mac use proprietary models to determine whether a property qualifies for an appraisal waiver, based on factors like loan-to-value ratios, property types, and transaction types.

A homeowner receiving good news from a lender about the approval of an appraisal waiver

Why Would a Buyer Waive an Appraisal?

Choosing to waive an appraisal can be a strategic move for buyers looking to streamline their home purchase process. The primary incentive? Significant cost savings and expedited closing times.

Appraisals, the in-person assessments of a home's value conducted by a professional appraiser, are not just formalities. They are integral to the lending process, ensuring the loan amount does not exceed the property's value.

However, they come with a price, ranging anywhere from $600 to $2,000. This cost is typically out of pocket for the buyer, adding to the already substantial expenses of purchasing a home.

Beyond the financial savings, waiving an appraisal can also accelerate the closing process. The appraisal itself, scheduling conflicts, and the subsequent analysis can introduce delays, extending the time to close by weeks.

In a competitive housing market, time is of the essence. A quicker closing can be a significant advantage, making offers more attractive to sellers who are eager to complete the sale without unnecessary delays.

The Role of Zip+4 in Enhancing Chances for an Appraisal Waiver

It's much more likely that you'll get an appraisal waiver from Fannie Mae and Freddie Mac if you include the full zip code (Zip+4).

The detailed geographical identifier enhances the accuracy of the automated valuation models these entities use.

Using Zip+4, the AVMs can determine a property's market value more accurately, taking into account the neighborhood's specific characteristics.

Especially in areas where property values vary a lot within short distances, precision is crucial. Borrowers are encouraged to get the nine-digit zip code from the USPS website to make sure their loan applications qualify.

Eligibility Requirements for Appraisal Waivers

Eligibility for an appraisal waiver from Fannie Mae and Freddie Mac is determined by specific criteria, focusing on loan purpose, Loan-to-Value (LTV) ratios, and property types.

Key factors include:

  • Loan Purpose: Both refinancing and purchase loans may be eligible, but the guidelines differ. For instance, certain cash-out refinancing options may have stricter criteria.

  • LTV Ratios: The loan-to-value ratio is a critical determinant, with more favorable LTVs often qualifying more readily for waivers.

  • Property Types: Generally, one-unit properties, including single-family homes and condos, are considered. The property must also meet certain occupancy and transaction-type guidelines.

Ineligible loans often include those for multi-unit properties, certain types of investment properties, and properties that do not meet the specific underwriting requirements set by Fannie Mae and Freddie Mac, including value limitations and geographic restrictions.

Exclusions and Ineligible Loans

While appraisal waivers can simplify the mortgage process, not all loans or properties qualify. Fannie Mae and Freddie Mac have clear exclusions for certain loans and properties.

For example, properties valued over a specific amount, new constructions, and those requiring significant renovation are generally excluded.

Multi-unit properties, co-ops, and certain investment properties also typically do not qualify for appraisal waivers.

Additionally, loans that do not meet the agencies' specific underwriting criteria, including those with higher risk factors or those outside designated areas, are ineligible.

Investor Overlays and Additional Considerations

Lenders might apply investor overlays on top of the guidelines Fannie Mae and Freddie Mac set for appraisal waivers.

Overlays can vary significantly between lenders and can affect appraisal waiver eligibility. Some lenders have stricter LTV ratios or won't accept appraisal waivers on certain properties.

Lender-specific overlays can affect a borrower's ability to qualify for an appraisal waiver even if they meet Fannie Mae and Freddie Mac's requirements.

You can reach out to MakeFloridaYourHome to maximize your chances of getting an appraisal waiver.

Is There a Downside to Waiving an Appraisal?

An appraisal waiver can speed up the mortgage process and cut costs by avoiding appraisal fees. However, this convenience has some drawbacks, primarily concerning the accuracy of the property's valuation.

Automated valuation models (AVMs) are not always reliable. They might not capture the current market conditions or the unique features of a property, leading to potential discrepancies in the property's assessed value.

This inaccuracy can result in buyers overpaying for a property or facing challenges in financing due to equity issues.

AVMs might not reflect rapid market changes, leading to valuations that do not accurately represent the property's current market value.

While an appraisal waiver can offer immediate financial savings and expedite the closing process, buyers need to weigh these benefits against the risks of potential inaccuracies in property valuation.


This FAQ section is designed to provide concise answers to some of the most common questions about appraisal waivers with respect to Fannie Mae and Freddie Mac's guidelines.

Can any property qualify for an appraisal waiver?

No, only properties meeting specific criteria, such as certain one-unit homes, are eligible. Property type, loan type, and value play a significant role in determining eligibility.

How do I find my property's nine-digit zip code?

The USPS website offers a tool to find your property's nine-digit zip code (Zip+4) by entering your standard address details.

Are appraisal waivers available for high-value properties?

Properties above a certain value threshold may not qualify for appraisal waivers due to increased risk and valuation complexities.

Do investor overlays affect appraisal waiver eligibility?

Yes, individual lenders may impose additional criteria or overlays that could influence your eligibility for an appraisal waiver, even if you meet the primary guidelines.

Will I get an appraisal waiver if I meet all the criteria?

No, eligibility does not guarantee an appraisal waiver, as decisions also depend on the automated valuation model's analysis.

How does the loan-to-value (LTV) ratio impact appraisal waiver eligibility?

A lower LTV ratio can increase the likelihood of receiving an appraisal waiver, reflecting lower risk to the lender.

Can I request an appraisal waiver directly?

Appraisal waivers are typically offered by the lender based on the automated system's findings, not requested directly by borrowers.

Are refinancing transactions eligible for appraisal waivers?

Yes, both rate-and-term and limited cash-out refinancing transactions may qualify for appraisal waivers under certain conditions.

What happens if my property is in a rural area?

Properties in rural areas may be eligible for appraisal waivers, but the availability can vary based on data sufficiency and market activity.

If denied an appraisal waiver, can I appeal the decision?

Generally, the decision is based on specific criteria and automated assessments, making appeals on appraisal waiver decisions unlikely.

Bottom Line

To get an appraisal waiver for a conventional loan, you have to understand and navigate Fannie Mae and Freddie Mac's specific criteria.

If you include the full nine-digit zip code (Zip+4) with your loan application, you improve the accuracy of automated valuation models, which increases your waiver eligibility, especially in areas with high property value variability.

A property's eligibility depends on its loan-to-value ratio, its type, and its purpose, and certain properties and transactions are ineligible.

Beware of investor overlays, as lenders may have stricter requirements than Fannie Mae and Freddie Mac.

If you want help getting an appraisal waiver, be sure to reach out to MakeFloridaYourHome.

With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.

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