Fannie Mae will begin offering appraisal waivers on some refinance transactions. This is great news as it will help transactions that qualify have a quicker closing and help reduce the work load for appraisers which will hopefully help expedite current appraisal turn-times. This will also help home owners save money on their transaction by not having to pay an appraisal fee, which have gone up dramatically over the last few months.
In order to be eligible for to have an appraisal waived, Fannie Mae’s automated underwriting system, Desktop Underwriter (specifically version DU 10) must determine the property qualifies. This process takes place once the lender has an application and has ran it through Desktop Underwriter.
Refinance transactions that are eligible to have an appraisal waived include:
- One unit properties, including condominiums;
- Principal residences, second homes and investment properties;
- Loan to values (LTV/CLTV) up to 90% for principal residences and second homes (subject to private mortgage insurance approval, if required) and up to 60% LTV/CLTV for an investment property for rate/term and limited cash out refinances;
- Maximum loan to value up to 70% (LTV/CLTV) for a cash out refinance for a principal residence and 60% for a second home or investment property.
- Value of the home, provided to DU, needs to be under $1,000,000
- Fannie Mae mortgages are “conforming” mortgages and therefore, subject to conforming loan limits with the new mortgage.
Again, you may have all the goodies listed above, however Fannie Mae’s program, DU, has to issue the option of having the appraisal waived. Having met all the criteria is not a guarantee of Desktop Underwriting issuing an appraisal waiver.
Fannie Mae will begin issuing appraisal waivers on December 10, 2016.
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