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

Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI


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    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

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Your Referrals & Testimonials are Always Greatly Appreciated! 



Comments (24)

Debra Leisek
Bay Realty,Inc Homer Alaska - Homer, AK

Our lenders have mentioned this but we haven't seen one yet darn it!

Would certainly speed things up!!

May 15, 2020 01:17 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

It certainly can, Debra Leisek ... I hope you experience a waiver soon!


May 15, 2020 08:57 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi ,

Excellent post! Congratulations on the featured post. I'm seeing more Appraisal waivers. On my last two listings the buyers received  an Appraisal Waiver which we were very thankful for!

May 15, 2020 04:05 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Glad to hear that your market is utilizing this waiver, Dorie Dillard CRS GRI ABR ... and that it's been successful for you.


May 15, 2020 08:58 AM
Kat Palmiotti
406-270-3667,, Broker/REALTOR® - Kalispell, MT
Helping your Montana dreams take root

Excellent overview of the appraisal waivers! 

Enjoy your day!

May 15, 2020 05:26 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Thanks so much, Kat Palmiotti ... appreciate it!


May 15, 2020 08:58 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Fantastic information, Gene... then again... your posts are always spot on with information we need to know and pass on to our clients. Thank you.

May 15, 2020 06:30 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

I so appreciate your comment, Nina Hollander ... as that is my main focus ... to help to facilitate transactions and positive actions through the sharing of information ... thank you


May 15, 2020 09:00 AM
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I have had a couple of transactions where an appraisal waiver has been used.  One transaction was for buyer clients of mine and I was actually anxious to negotiate a lower price for them after the appraisal, but alas I did not get to do so, haha.

May 15, 2020 06:31 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Glad it all worked out in the end, Brian England ... and happy to hear your markets are seeing this current waiver utilized ...


May 15, 2020 09:01 AM
Mike McCann - Nebraska Farm Land Broker
Mike McCann - Broker, Mach1 Realty Farmland Broker-Auctioneer Serving Rural Nebraska - Kearney, NE
Farm Land For Sale 308-627-3700 or 800-241-3940

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi 

Fantastic Information Gene.  I can speak from personal experience as we are waiting to close on a refinance of our home on June 1.  15 year Loan at 2.75% is fantastic... which kicks the crap out of our previous Great loan of 4% over 30 years.

We are one of those who do not have to have an appraisal...but I did have to close...temporarily at Equiline Credit account to avoid the appraisal.

No problem there. That could be an issue for some however.

You made one statement that is perfect.   Actually many of your statements were spot on!  I really enjoyed this one: "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."

Thank you for sharing your knowledge!!

May 15, 2020 06:44 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

So very glad that you were able to benefit from this waiver, Mike McCann - Nebraska Farm Land Broker ... and shared your personal experience.  And as far as the "no two loans" thing ... that is getting more and more true as time goes on.  Mortgages are an increasingly specific and personal thing.

Congrats on the great new loan!  Well done!


May 15, 2020 09:03 AM
Rob Spinosa
Guaranteed Rate, Marin County, CA - San Anselmo, CA
SVP of Mortgage Lending, Marin County

Appraisal waivers on a purchase loan are interesting and we've had some clients embrace them and others turn them down.  I guess the case for a physical inspection is to hope(?) that the property doesn't appraise and that maybe that can be used for negotiating the price down?  Still, I tell clients that removing the appraisal removes a variable.  It's one less thing that could add complexity and one more thing to lessen it.  Personally, I love the waiver option and we attempt to determine eligibility on every file that applies.

May 15, 2020 06:57 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

You showcase just why it's so important to work with an experienced lender ... and also why each loan must be considered on its own merit, Rob Spinosa ... thank you.  Each transaction must be considered on its own regarding waivers ... both pro and con.  Having a lender, such as yourself, to guide a borrower thru that is very important ...


May 15, 2020 09:06 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

For the first time in several years I have an offer that need an loan appraisal. The buyer agent assured me they can put more down if needed. In CA we have a no loan contingency check some better neighborhoods sellers want to see that one check off to consider an acceptance.  Once the buyers have viewed and read inspection report they are expected to release the inspection.

May 15, 2020 07:14 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Thank you for sharing that info, Sam Shueh ... once again, it proves that real estate and the transacting of it can be very "local".


May 15, 2020 09:09 AM
Ray Henson
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA

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 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.

May 15, 2020 07:28 AM
Ray Henson

BTW-I re-blogged and shared on Twitter and my FB page.  Thank you for providing such an informative post.

May 15, 2020 07:39 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Appreciate you sharing your personal experience with this subject, Raymond Henson, SRES, GRI ... and you're so right about asking questions.  I wish more people had that attitude! I greatly appreciate your sharing this post elsewhere too.  Thank you so much.  Hope it proves useful to your clients and readers.


May 15, 2020 09:11 AM
Doug Dawes
Keller Williams Realty Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Great post Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi I have bookmarked it for further reference. 

May 15, 2020 07:41 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Appreciate that bookmark too, Doug Dawes ... thank you!


May 15, 2020 09:54 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Gene - some excellent points made and that's not a "blanket statement" either.  

May 15, 2020 07:49 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Ha!  Thank you Michael Jacobs ...


May 15, 2020 09:55 AM
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Good morning, Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi we haven't run into this yet.... probably won't....

May 15, 2020 08:10 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Look at it this way, Barbara Todaro ... in the small chance you do, you're aware and prepared.  But your comment showcases that not all markets see and experience the same things ... a good reminder to all of us ...


May 15, 2020 09:56 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Gene I have only seen a few appraisal waivers on my loans, but it is great when I get one.  It lowers the closing cost and speeds up the approval process.

May 15, 2020 10:27 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

You can almost hear the sigh of relief, George Souto ...


May 15, 2020 11:09 AM
Kimo Jarrett
Cyber Properties - Huntington Beach, CA
Pro Lifestyle Solutions

Very informative and interesting illustrations of the various types of appraisals and their applications. Great post.

May 15, 2020 07:35 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Thanks so much, Kimo Jarrett ... appreciate your kind comment ..


May 19, 2020 08:48 AM
Aqila Bond
Wainwright Real Estate - Virginia Beach, VA

I was told by the sellers agent that an Exterior Appraisal Only was done on a short sale in Feb. This appraisal came back way to high and they will not do another appraisal until 6 months from the last appraisal. Now my buyer has to walk away. The inside definitely needs work. Has anyone run into this?
The sellers agent in my opinion needs to provide comps and photos to the sellers bank.

May 15, 2020 09:55 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

I'm not sure what the "snag" in this process was Aqila Bond ... as the Appraiser must still provide comparables and support for their conclusion.  Short sales are a "different animal", I understand ... but  ...

I think you have a blog in the making on this topic, 


May 19, 2020 08:52 AM
Cathy Starkweather
La Rosa Realty, LLC. - Celebration, FL

Great information here, thank you for sharing!

May 16, 2020 07:12 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

And thank you for commenting, Cathy Starkweather 


May 19, 2020 08:53 AM
Wayne L. Brown
Franklin Advantage Inc. - Alpine, CA

Great post Gene.

Very informative.

May 16, 2020 11:17 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Appreciate it, Wayne L. Brown ... thanks


May 19, 2020 08:53 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

With no appraisal needed would there be no appraisal fee forthe buyers, closing cost wise

May 17, 2020 08:59 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

It definitely can be a real savings, Michael J. Perry ... and it's typically greatly appreciated ...



May 19, 2020 08:54 AM
Anthony Kirlew
Group 46:10 Network @ eXp Realty - Gilbert, AZ
Helping You Make Fiscally Sound Choices

Thanks for the primer!

May 17, 2020 01:58 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

Thanks for the thumbs up, Anthony Kirlew!


May 19, 2020 08:55 AM
John Juarez
The Medford Real Estate Team - Fremont, CA

A good friend had been greatly vexed by the appraisal issue. He has tried several lender in vain and in frustration. He wants to refinance his principal residence in which he has lived for many years. He want to take out some cash to do improvements and some modernization. The loan that he only wants would only be about 50% of the home’s value. Problem: the home is worth about $1.5 million so the resulting loan would be a cash-out refi of more than $700K. Problem: he is in his 70’s and married; he and his wife are taking precautions during this pandemic which include staying at home and away from other people and preclude the introduction of a stranger (an appraiser) to the interior of their home. All lender whom he has spoken insist on a traditional full appraisal. NOT GOING TO HAPPEN! So the loan will, also, not happen.

Aug 07, 2020 01:26 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

I can see the pro and con of your friend's issue, John Juarez ... given the value of the property and the cash-out amount, the lenders are being cautious.  Given the timing of the application for loan, I understand your friends' reluctance to allow an appraiser into the property.  It's a standoff at this time. 

My guess is that the lenders are "selling" the loan down the road and that is what's determining the ability to utilize an appraisal waiver.  I've had similar issues arise, but have been able to work out a compromise between homeowner and appraiser.  If your friend remains adamant and will not compromise regarding the entrance of an appraiser into their home ... unfortunately, the standoff stays in play. 

Hopefully, there is a loan officer still seeking another solution?


Aug 10, 2020 11:52 AM