Appraisal waivers let qualified buyers skip traditional home appraisals, saving time and money. While convenient, waivers rely on automated data, making them ideal only for low-risk loans. Understanding why appraisals matter in home buying—to assess property value and protect lenders and buyers—is key. Waivers suit financially strong borrowers, but unique or high-risk properties still require a full appraisal. Always consult your lender to see if you qualify.
This guide breaks it all down: what appraisal waivers are, when they apply, their pros and cons, and how you can find out if you’re eligible.
What Is an Appraisal Waiver?
An appraisal waiver is when a mortgage lender decides that a traditional, in-person home appraisal isn’t necessary for a loan to be approved. Instead, the lender relies on automated data and property valuation models to estimate the home’s market value.
Appraisal waivers are most commonly issued by Fannie Mae and Freddie Mac—the government-sponsored enterprises (GSEs) that back many U.S. mortgages. The process is also known as a Property Inspection Waiver (PIW) by Fannie Mae or Automated Collateral Evaluation (ACE) by Freddie Mac.
Why Skipping an Appraisal Matters
Skipping the appraisal can save:
- Time – Avoid delays that can come from scheduling appraisers in busy markets.
- Money – Save $300–$600 (or more) on the appraisal fee.
- Stress – Reduce anxiety about potentially low appraisals affecting your loan approval or renegotiating the price.
But this isn’t just a matter of convenience. In a competitive market, getting to the closing table faster can give you an edge.
Who Qualifies for an Appraisal Waiver?
Appraisal waivers aren’t guaranteed—they’re offered only when specific eligibility requirements are met. Below are the general criteria for eligibility:
Primary Requirements
- Conventional Loans Only
Appraisal waivers apply mainly to loans backed by Fannie Mae or Freddie Mac—not FHA, VA, or USDA loans. - Low Loan-to-Value (LTV) Ratio
Generally, you must have at least:
- 20% down payment for purchases
- At least 10% equity for refinances
- Single-Family Homes or Condos Only
Usually, multi-family or manufactured homes are not eligible. - Loan Purpose Matters
- Purchases and refinances may qualify
- Cash-out refinances usually do not qualify
- Strong Borrower Profile
Lenders favor borrowers with:
- High credit scores (typically 680+)
- Solid income documentation
- Clean financial history
Pro Tip:
Eligibility is determined through the lender’s automated underwriting system (AUS), such as Fannie Mae’s DU or Freddie Mac’s LPA.
Example: How It Works in Practice
Let’s say:
- You’re buying a home for $400,000
- You’re putting 20% down ($80,000)
- Your loan amount is $320,000
- Your credit score is 740
Your lender runs the application through Fannie Mae’s DU system. Based on your equity, credit, and property type, you may get an instant PIW, allowing you to close faster and save $500+ on an appraisal.
Pros and Cons of Appraisal Waivers
Benefits
- Faster closings
- Lower out-of-pocket costs
- Less paperwork
- Reduces risk of deals falling through over low appraisals
Drawbacks
- May not apply to unique or high-risk properties
- Could miss issues only a physical appraisal might catch
- Less negotiation power for buyers (no low appraisal clause)
When to Consider an Appraisal Waiver
You should consider leveraging an appraisal waiver if:
- You’re refinancing and have built significant equity.
- You’re buying in a neighborhood with stable home values.
- You’re a repeat buyer with strong financial credentials.
- You’re under tight time constraints and need to move quickly.
But if you’re buying a fixer-upper or a non-traditional home, a physical appraisal is likely your safest (and required) route.
Tips for Buyers and Investors
For First-Time Buyers:
- Ask your lender early if you’re eligible for an appraisal waiver
- Don’t assume every pre-approval means you’ll skip the appraisal
For Real Estate Investors:
- Use waivers to scale faster by reducing per-property costs
- Ensure your portfolio’s documentation is up to date to qualify consistently
For Agents:
- Educate clients on what appraisal waivers mean for speed and negotiation
- Use waivers as a selling point to speed up transactions
Comparison: Traditional Appraisal vs. Appraisal Waiver
| Feature | Traditional Appraisal | Appraisal Waiver |
| Cost | $300–$600+ | $0 |
| Timeline | 5–10 days (or more) | Instant |
| Required for Approval | Yes (default) | No (if waiver granted) |
| Subjectivity | Based on appraiser opinion | Based on data and algorithms |
| Use Cases | Most home loans | Select refinance and purchase loans |
Conclusion:
Appraisal waivers can offer serious time and cost savings, but they aren’t right for everyone—or every property. For buyers and investors with strong financial profiles, they can streamline the process. But if you’re dealing with unique homes, fixer-uppers, or high-risk loan scenarios, a traditional appraisal might offer better protection.
Next Step: Ask your lender today if your loan qualifies for an appraisal waiver. Use online calculators to assess your equity and credit position—and don’t hesitate to reach out to a real estate professional who understands how to use this tool strategically.