According to reports from Fannie Mae and Freddie Mac, both companies are waiving appraisal requirements in some circumstances. This is because their automated software is able to use previous and current data from the market, and even on the home itself, to determine whether or not an appraisal is necessary. If it isn’t, they will forego the appraisal.
“By leveraging big data and advanced analytics, as well as 40+ years of historical data, we’re cutting costs and speeding up the closing process for borrowers,” said David Lowman, executive vice president of Freddie Mac’s Single-Family Business. “At the same time, we’re providing immediate collateral representation and warranty relief to lenders. This is just one example of how we are reimagining the mortgage process to create a better experience for consumers and lenders.”
How Do Borrowers Get a Mortgage Without an Appraisal?
Borrowers don’t have to do anything different to get a mortgage without an appraisal, including a refinance. Everything will be handled by your mortgage broker.
Borrowers who are approved for a mortgage without an appraisal, still have the option to get an appraisal for their own protection, if they feel it is necessary.
Fannie Mae’s, Pete Bakel, says they are, “Focused on providing lenders with increased operational efficiencies that allow them to make the mortgage process easier for borrowers, and making doing business with Fannie Mae simpler and more certain.”
What Does Your Lender Have To Do?
To see whether you qualify for a mortgage without an appraisal, your lender will submit your loan for analysis through the Freddie or Fannie automated system. The software uses statistical models and algorithms to determine whether you are required to have an appraisal to qualify for a mortgage.
In all likelihood, the majority of borrowers will need to have an appraisal in order to get a mortgage.
Is My Property Eligible?
Only certain properties are eligible for a mortgage without an appraisal. So, consult your mortgage broker for details regarding specific properties.
With Fannie Mae, properties that are cooperatives, multiunit properties, and manufactured homes are not eligible, but condos, second homes, and single-family homes are eligible. Also, there are certain financial requirements related to qualifying for a mortgage without an appraisal.
For Freddie Mac, only single-family homes and single-unit houses are eligible to skip the appraisal. Second homes, condos, homes valued at over $1 million, those with property condition problems, foreclosed homes, and vacation homes are not eligible. And again, there are certain financial requirements related to qualifying for a mortgage without an appraisal.
So again, consult your mortgage broker for details.
Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers and homeowners in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients with HARP refinancing to lower their monthly mortgage payments.