An appraisal waiver with Fannie Mae (FNMA) is part of their Desktop Underwriter® (DU®) system. It allows eligible borrowers to bypass the need for a traditional home appraisal as part of the mortgage approval process. This can save time, money, and simplify the loan process. Here's a breakdown:

What Is an Appraisal Waiver?
Definition: It’s an offer to waive the traditional appraisal requirement for certain loans, relying instead on data and models from Fannie Mae’s property valuation tools.
Purpose: Streamlines the loan process, reducing delays and costs associated with appraisals.
How Does It Work?
Fannie Mae’s DU evaluates the loan application and determines if the property is eligible for an appraisal waiver.
The system uses proprietary data, including property valuation databases, prior appraisals, and market analysis, to assess the property’s value.
If deemed eligible, the lender may accept the waiver instead of ordering a new appraisal.
Eligibility Criteria
To qualify for an appraisal waiver:

Loan Purpose: Often available for refinances (limited cash-out or cash-out) and some purchase transactions.
Loan-to-Value (LTV) Ratios: Must meet specific LTV thresholds, which vary based on the loan type.
Loan Type: Applicable to certain single-family homes, condos, and PUDs (Planned Unit Developments). Not typically available for multi-unit properties or manufactured homes.
Borrower/Property Profile: FNMA’s database must have sufficient prior data to validate the property value.
Other Requirements: Loan must conform to FNMA standards (i.e., not jumbo or non-conforming).
Benefits
Saves the borrower hundreds of dollars in appraisal fees.
Reduces loan processing times, speeding up the closing process.
Simplifies the underwriting process by eliminating the need for third-party appraisals.
Key Considerations
Waiver Isn’t Guaranteed: Even if DU suggests eligibility, lenders may still require an appraisal at their discretion.
Market Risks: Without an appraisal, there’s a risk that the property value could be incorrect, impacting the lender.
Not for All Properties: Properties with unique characteristics or limited valuation data may not qualify.
Would you like help determining if a specific loan scenario might qualify for an appraisal waiver? Or need assistance with FNMA guidelines?

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