Appraisal Waivers on Conforming Mortgages (Value Acceptance & ACE)

One of the more pleasant surprises in a mortgage transaction is when the automated underwriting system comes back and tells you an appraisal isn’t required. It saves time, saves money, and removes one of the more unpredictable variables from the process.

Here’s what appraisal waivers are, what they’re called now, and what you need to know about how they work on conventional conforming loans in Washington state.

The Terminology Has Changed

When appraisal waivers first became widely available, that’s what everyone called them — appraisal waivers. The name has since been updated by both agencies:

• Fannie Mae now calls it Value Acceptance (previously Property Inspection Waiver or PIW)
• Freddie Mac calls it Automated Collateral Evaluation (ACE)

You may still hear loan officers use “appraisal waiver” as shorthand — it’s the same concept, just under updated branding. Either way, the meaning is the same: the agency’s automated underwriting system has determined it has sufficient data on the property to accept the lender’s stated value without a new appraisal.

How Does a Value Acceptance and ACE Offer Work?

When your loan file runs through Desktop Underwriter (Fannie Mae’s AUS) or Loan Product Advisor (Freddie Mac’s AUS), the system evaluates the property against its database of historical appraisal data, sales records, and property information. If it has enough confidence in the value, it may issue an offer to waive the appraisal requirement.

This is not something you apply for separately — it either comes back in the AUS (automated underwriting system) findings or it doesn’t. Your loan officer will let you know if the offer is available on your transaction.

Loan-to-Value (LTV) Limits by Transaction Type

Whether a Value Acceptance or ACE offer is available depends partly on your loan-to-value ratio. Here are the current maximum LTV limits by transaction type:

Fannie Mae Value Acceptance

• Purchase: Primary residence and second homes up to 90% LTV/CLTV
• Limited cash-out refinance: Primary residence and second homes up to 90% LTV/CLTV; investment properties up to 75% LTV/CLTV
• Cash-out refinance: Primary residence up to 70% LTV/CLTV; second homes and investment properties up to 60% LTV/CLTV

Fannie Mae also offers a Value Acceptance + Property Data option on purchases, which allows LTV/CLTV up to 97% (and up to 105% CLTV for Community Seconds) on primary residences and second homes — but this requires a property data collection visit rather than a full appraisal.

Freddie Mac ACE

• Purchase: Primary residence or second home up to 90% LTV/TLTV
• No cash-out refinance: Primary residence or second home up to 90% LTV/TLTV
• Cash-out refinance: Primary residence up to 70% LTV/TLTV; second home up to 60% LTV/TLTV

Note that transactions where the purchase price or estimated value is $1,000,000 or more are ineligible for a waiver under both Fannie Mae and Freddie Mac guidelines — relevant context for higher-priced markets like King County.

When a Waiver Is Not Available

Even if your LTV is within range, certain transaction types are ineligible regardless. Under Fannie Mae, waivers are not available for:

• Two- to four-unit properties
• Cooperative units and manufactured homes
• Construction and construction-to-permanent loans
• HomeStyle Renovation and HomeStyle Refresh products
• Loans where rental income from the subject property is used to qualify
• Transactions using a gift of equity
• Manually underwritten loans
• Loans where the mortgage insurance provider requires an appraisal
• Any transaction where the lender has reason to believe an appraisal is warranted

Under Freddie Mac ACE, ineligible transactions include:

• Manufactured homes and leasehold estates
• Properties subject to resale restrictions (with limited exceptions for age-based restrictions)
• Non-arm’s length transactions
• Properties where the seller is a lender or government entity
• Any mortgage for which an appraisal or property data report has already been obtained

The bottom line: the AUS either issues the offer or it doesn’t. If your transaction falls into one of these ineligible categories, no waiver will be offered regardless of LTV or property history.

When Is a Waiver Most Likely to Be Offered?

Outside of the hard eligibility rules above, the AUS is more likely to offer Value Acceptance or ACE when:

• The property has a strong data history — prior appraisals, sales records, and AVM data that give the agencies confidence in the value
• The loan-to-value ratio is on the lower end of the eligible range
• The loan receives an Approve/Eligible recommendation from DU or LPA
• The property is a single-family residence or condominium in a well-documented market
• The borrower profile is strong overall

Rural and thinly-traded markets have less historical data available, which makes waiver offers less common — though Fannie Mae does have specific provisions for high-needs rural locations for borrowers at or below area median income.

You Can Decline the Waiver

This is something many borrowers don’t realize: accepting a Value Acceptance or ACE offer is optional. If the AUS offers a waiver but you would prefer to have an appraisal done — perhaps because you want an independent confirmation of value, or because you’re curious about the condition assessment — you can request one.

There are also situations where getting an appraisal makes strategic sense even when a waiver is available. If you believe your home has appreciated significantly and want the appraised value on record for future transactions, an appraisal gives you that documentation.

What a Waiver Means for Your Transaction

When a waiver is accepted:

• Reduced or no appraisal fee — typically $600–$900 in the Seattle metro area, so a meaningful savings
• Faster closing timeline — appraisal scheduling and turnaround time is removed from the critical path
• No appraisal contingency risk — the value uncertainty that can complicate purchases or refinances is eliminated
• The lender uses the purchase price (on a purchase) or the borrower’s stated value (on a refinance) as the basis for LTV calculations, subject to AUS acceptance

Appraisal Waivers on Purchase Transactions

Purchase waivers are less common than refinance waivers but do occur. When they do, the purchase price is generally used as the value. This can be particularly useful in competitive markets where appraisal gaps are a concern — though it’s worth noting that a waiver doesn’t eliminate the need for due diligence on the buyer’s part. A home inspection is still highly recommended regardless of whether an appraisal is required. Learn more about appraisals for when you’re buying a home in Washington state.

How This Relates to a Low Appraisal

If you’re on the other side of this — your refinance did require an appraisal and it came in lower than expected — a waiver obviously wasn’t available on your transaction. In that case, you still have options. See What to Do When Your Appraisal Comes in Low on a Refinance for a full breakdown including reconsideration of value and loan restructuring.

Bottom Line

If your AUS findings come back with a Value Acceptance or ACE offer, it’s generally good news — it means the agencies have enough confidence in your property’s value to move forward without a new appraisal. Whether to accept it is your call, and your loan officer can help you think through whether it makes sense for your specific situation.

Questions about your conforming loan options in Washington State? Let’s talk. You can also explore the full range of conforming mortgage programs available to Washington buyers and homeowners.