Appraisal Waiver: Who Qualifies, What It Is Called Now, and When to Get an Appraisal Anyway

When a lender runs a conventional loan through Fannie Mae's Desktop Underwriter (DU) or Freddie Mac's Loan Product Advisor (LPA), the system compares the loan and the property against its own data. Freddie Mac says ACE relies on proprietary models, 40 years of historical data and public records. Fannie Mae's Selling Guide section B4-1.4-10 says eligibility generally depends on a prior appraisal of the property being found in its Collateral Underwriter data, and a prior appraisal with an overvaluation flag is not used.

If the system is comfortable with the value, it returns an offer. When the lender accepts it, the agency takes the value as given and gives the lender relief from the representations and warranties it would otherwise make about value. Fannie Mae describes this as relief from enforcement of representations and warranties related to property value and marketability, and Freddie Mac's ACE extends similar relief to value, condition and marketability.

The waiver covers one thing: the appraisal the lender would otherwise order to support the loan. It does not waive your home inspection, your title search, the lender's insurance requirements or a condo project review.

The old label is still everywhere, including in lender emails, but the programs have new names. Fannie Mae's March 2023 Selling Guide update introduced "value acceptance" in place of the term "appraisal waiver," saying it better reflects the process of using data and technology to accept the lender-provided value. You may also still see the older abbreviation PIW, a source of confusion we untangle in our guide to the property inspection waiver.

The "+ property data" versions add a step. When the agency needs more information about the home, including its current condition, a trained data collector visits and documents the property, but no appraiser gives an opinion of value. Fannie Mae's value acceptance page describes when that hybrid applies.

Both programs are limited to one-unit homes and to transactions where the borrower has meaningful equity or a down payment. The loan-to-value ratio, or LTV, is the loan amount divided by the home's value. These are the published maximums as of the latest program pages:

Freddie Mac announced the purchase expansion from 80 to 90 percent LTV for ACE in Guide Bulletin 2024-16, and later moved the start date up to LPA submissions on or after February 24, 2025. Fannie Mae's purchase eligibility expanded with its DU 12.0 release in January 2025.

Common reasons a loan is not eligible

• Property type. Fannie Mae excludes two- to four-unit properties, co-op units, manufactured homes, leasehold properties and community land trust or resale-restricted homes.
• Price. A purchase price or estimated value at the $1,000,000 line or above it, depending on the agency.
• Transaction type. New construction and construction-to-permanent loans, renovation loans, Texas Section 50(a)(6) home equity loans, and, at Fannie Mae, purchases using a gift of equity. Freddie Mac excludes non-arm's length transactions, such as buying from a relative or employer.
• Underwriting. Manually underwritten loans and DU files without an Approve/Eligible recommendation do not get value acceptance.
• Income from the property. If the lender uses rental income from the subject property to qualify you, Fannie Mae requires an appraisal.

Can you get an appraisal waiver on a condo?

Yes. Fannie Mae's guide lists "one-unit properties, including condos" as eligible. Freddie Mac opened ACE to condos on July 16, 2018; its announcement said people who buy a condo or refinance an existing condo mortgage "may now be eligible," and that lenders find out by submitting the loan through Loan Product Advisor. Your lender's system makes the final call on a specific unit. Co-op units are the exception at Fannie Mae; in a co-op you own shares in a corporation rather than a deeded unit. Our explainer on what a condo legally is covers that distinction, and condos and townhomes explains why a townhouse can still be a condo unit on paper.

The waiver answers only the unit's value. The building still has to pass the lender's condo project requirements, and the lender still needs the association's master insurance policy to meet agency standards, a document we read line by line in our guide to the condo master insurance policy. Do not confuse an appraisal waiver with Fannie Mae's waiver of project review, which is a different thing entirely and is covered in our guide to the non-warrantable condo.

You find out when the lender runs your file, usually early in underwriting. A few signs: the Loan Estimate has no appraisal fee, the lender does not ask for access to the home, or the lender mentions value acceptance or ACE. Ask directly: "Did DU or LPA return a value acceptance or ACE offer on my file, and do you plan to use it?"

The offer can change. If the price, loan amount or loan type changes and the file is resubmitted, the system may stop offering it. Fannie Mae requires that the last DU submission produced the offer and that the offer is no more than four months old on the note date. Freddie Mac's offer is valid for 120 days.

The lender can say no. Fannie Mae's guide requires the lender to order an appraisal when law requires one, when it uses rental income from the property, or when it believes an appraisal is warranted. Freddie Mac bars ACE when the lender knows of a significant property deficiency. And if an appraisal is obtained for the loan, the waiver is no longer available at either agency.

On cost, Fannie Mae reports 5.34 million loans sold with value acceptance and about $3 billion in estimated borrower savings since 2018, using about $550 as the average appraisal cost. On the right to a copy: for first-lien loans, the CFPB says lenders must give you a free copy of all appraisals and other written valuations promptly and no later than three days before closing.

Pros. You save the appraisal fee, remove one of the most common sources of closing delays, and avoid the risk that a low appraisal derails a deal you are happy with. On a refinance where your equity is not in question, there is little downside.

Cons. On a purchase, the value is whatever you agreed to pay. If you paid too much, no one tells you before closing. In a competitive market, that is a real risk: the waiver protects the lender's process, not your price.

Here is an illustrative example; the numbers are assumptions, not market data. Say you are buying a $400,000 condo in Austin's Mueller neighborhood with 10 percent down, after winning a multiple-offer situation at $20,000 over list. DU offers value acceptance. Accepting it saves roughly the average $550 fee, but if comparable units actually support only $385,000, you have started ownership with $15,000 less equity than you think, on top of the 10 percent you put down.

On a refinance the math is friendlier. A homeowner in Denver doing a no-cash-out refinance at 60 percent LTV has a large equity cushion, and a waiver mainly saves time and money.

You have a few options if you want an independent value on a purchase:

• Ask the lender to order one. The lender decides, and you would normally pay for it. Once an appraisal is obtained, the waiver offer is gone.
• Hire your own appraiser. A private appraisal for your own information does not change the loan, but it tells you whether the price is supported before your contingency deadlines pass.
• Read your contract. An appraisal contingency only helps if an appraisal happens. Ask your agent how your contract handles value if the lender waives it.
• Do not skip the inspection. An appraisal waiver says nothing about the roof, the plumbing or the windows. Our guide to the property inspection waiver explains why a lender's waiver is not a waiver of your home inspection.

For condo buyers, the price question often matters more than the inspection, because units in the same building trade close together and comparable sales are easy to check. If you are weighing a unit as an investment, our guide on whether buying a condo is a good investment covers what the price needs to support.

Value acceptance and ACE are Fannie Mae and Freddie Mac programs, so they apply only to conventional loans those companies buy. FHA, VA and USDA loans follow their own appraisal rules, which our explainer on what an FHA loan is touches on. If a lender quotes a conventional loan with a waiver against an FHA loan with an appraisal, compare the full closing costs rather than the appraisal line alone; our guide to whether you can roll closing costs into a mortgage shows where the other costs sit.

Waiver or not, the monthly cost of a condo includes dues the appraisal never looks at, which lenders count in your debt-to-income ratio as our guide to HOA fees and your mortgage explains. Our comparison of condo vs house pros and cons covers how financing differs between the two.

The number the algorithm accepts is the price you agreed to. Owners in the building know what nearby units really sold for and what condition issues the listing photos hide, and you can ask them on Ask a Resident.

When no appraiser checks the price, the people who already own in the building are the best reality check on value and condition.

• What did similar units in this building sell for in the last year, and did any sell well below asking?
• When you bought, did your lender order an appraisal, and did it come in at the contract price?
• Are there condition problems in the building, such as leaks, window failures or elevator outages, that a buyer would not see on a short visit?
• Have any buyers here had trouble getting a loan approved because of the building rather than the unit?
• Is any major repair or special assessment being discussed at board meetings that might affect unit values?
• How quickly do units here usually sell, and do bidding wars happen?
• Has anyone here refinanced recently, and did their lender skip the appraisal?