Can I Waive the Appraisal?

Sometimes — on conventional loans, when Fannie Mae or Freddie Mac's automated underwriting system offers it. Fannie's version is called Value Acceptance (formerly Property Inspection Waiver, or PIW); Freddie's is called ACE (Automated Collateral Evaluation). Both are offers the AUS makes based on extensive data on the property and comparable sales; they typically require an Approve/Accept recommendation, the loan to be a primary-residence purchase or rate-and-term refi at modest loan-to-value (LTV), and a property the agency already has strong valuation data on. FHA does not offer waivers in the same form. VA has separate "LAPP/SAR" processes but not a Fannie-style waiver. A waiver removes the appraisal step — and shifts the property-condition risk to the buyer.

The handbook view (what the rules actually say)

Appraisal waivers are program features, not a borrower right. Here's what each program permits:

• Fannie Mae Value Acceptance (formerly PIW): Available when Desktop Underwriter (DU) returns the offer based on Fannie's proprietary collateral data on the property. Eligibility is generally limited to one-unit primary residences and second homes; most rate-and-term and limited cash-out refinances; and purchase transactions at LTV thresholds the AUS will not publish in advance. (Source: Fannie Mae Selling Guide B4-1.4-10, Value Acceptance (Appraisal Waivers). ) The waiver is an offer — accepting it is the lender's call, and the lender remains responsible for property eligibility.
• Freddie Mac ACE (Automated Collateral Evaluation): Available when Loan Product Advisor (LPA) returns an ACE-eligible offer based on Freddie's Home Value Explorer model and the property's data depth. Eligibility scope is similar to Fannie's. (Source: Freddie Mac Single-Family Seller/Servicer Guide, Section 5601. ) Freddie also offers ACE+ PDR (Property Data Report) and hybrid options that substitute a property data collector for a full appraisal in additional scenarios.
• FHA: No appraisal waiver in the conventional sense. FHA requires a full appraisal on every purchase and most refinances, with the exception of the FHA Streamline Refinance — which requires no appraisal at all but is limited to existing FHA-to-FHA refinances meeting specific seasoning and net-tangible-benefit tests. (Source: HUD Handbook 4000.1, III.A.3 and III.A.8 for FHA Streamline. )
• VA: VA generally requires a VA appraisal (Notice of Value) on purchases. The VA Interest Rate Reduction Refinance Loan (IRRRL) does not require an appraisal, but that's a refinance product, not a purchase waiver. (Source: VA Lender's Handbook, Pamphlet 26-7, Chapter 6 for IRRRL and Chapter 10 for appraisal. )
• Appraisal contingency is different: The "appraisal contingency" in a purchase contract is a buyer protection — it lets you terminate and recover earnest money if the home appraises low. Waiving the appraisal contingency in your offer (a tactic in competitive markets) is a separate decision from accepting a Fannie/Freddie value-acceptance offer. Don't confuse the two: waiving the contingency is a contract concession; the AUS waiver is a loan-program feature.

The plain-English translation

What an appraisal waiver actually means for you:

• You don't pay for the appraisal. Typical savings: roughly $500–$900, depending on the market and the property. The bigger benefit is usually speed — appraisals are often the slowest step in the loan process; waiving cuts a week or more.
• The agency accepts the contract price as the value. For purchases, this means the loan is sized to the contract — you don't risk an appraisal coming in low and blowing up the financing. For rate-and-term refinances, the agency accepts an AVM-derived value.
• Nobody walks the property. The appraisal serves two functions: valuation AND a third-party look at condition. Waiving the appraisal means no licensed appraiser inspects the home for issues like deferred roof, foundation concerns, or required safety items. You still want an independent home inspector — the AUS waiver doesn't replace that.
• Risk shifts to you on hidden defects. If the home turns out to have material problems that an appraiser might have flagged, the lender is off the hook — you accepted the waiver, you own the condition risk.
• You can decline the waiver. The AUS offer is an offer. If you want an appraisal anyway — for valuation comfort, condition review, or because the contract price feels stretched — you can pay for one. Some buyers do exactly that on older homes where Zillow / county data doesn't reflect actual condition.

Eligibility cheat sheet

The table is a guideline, not a quote. Whether the AUS will actually offer a waiver on your specific loan depends on factors Fannie and Freddie don't publish — the only way to know is to run the file through DU or LPA.

Lender overlays — where the rules get tighter

Even when the AUS offers a waiver, lenders can override or restrict its use:

• Some lenders won't honor purchase waivers: Even when DU or LPA offers Value Acceptance / ACE on a purchase, some lenders require a full appraisal anyway for internal risk reasons. As an independent broker we shop for the wholesale investor that will actually take the waiver when the AUS gives it.
• LTV overlays: Agency policy may permit waivers at one LTV; a given lender may overlay a tighter cap. Same loan can get a waiver at one investor and not at another.
• Property-type overlays: Condos, manufactured homes, and properties in disaster-affected areas frequently get pulled out of waiver eligibility at the lender level, even when the AUS would otherwise allow it.
• Hybrid-appraisal pushback: Freddie's ACE+ PDR and similar hybrid offers (property data collector + desktop appraiser) are accepted by some lenders and refused by others. The agency permits them; not every investor will buy the loan with one.

Which lenders we actually use for this scenario

Appraisal waivers run through the agency loan programs. On Fannie Mae files, the feature is called Value Acceptance (formerly Property Inspection Waiver, or PIW) — the AUS, Desktop Underwriter (DU), evaluates the file and either offers a waiver or requires an appraisal. On Freddie Mac files, the equivalent is Automated Collateral Evaluation (ACE) through Loan Product Advisor (LPA). FHA loans do not offer waivers — every FHA file gets an appraisal. VA has its own appraisal process and does not waive in the conventional sense, though specific refinance scenarios (Interest Rate Reduction Refinance Loans, or IRRRLs) have their own appraisal handling that is not really a waiver. USDA files get appraised. So when we are talking waivers, we are talking conventional, agency-eligible loans only.

The lenders we use most often when a waiver is in play are the ones whose pricing does not penalize the file when a waiver is taken. Some lenders price a waiver-eligible file the same as an appraised file — they have built the cost savings into their model. Others discount it slightly because they save the AMC fee on the file. We watch for that on the rate sheet. The bigger lender-selection issue is what happens when the AUS does not offer the waiver: which lenders allow us to re-run the AUS after restructuring the file (different loan amount, different down payment) to see if a waiver shakes loose. The ones with flexible AUS reruns are easier to work with on borderline files.

The Fannie B4-1.4 and Freddie 5601 guides spell out the eligibility framework. Typical conditions you will see across most agency-eligible waivers: primary-residence purchase or rate-and-term refinance, loan-to-value at or below 80%, AUS Approve/Eligible, no recent appraisal red flags in the property's history, no condo or co-op restrictions in play, and a property type the agency feels confident pricing without an inspection. Second homes and investment properties have narrower eligibility. Cash-out refinances have their own (tighter) rules. Higher loan amounts and unusual property types tend to disqualify.

Real-world cases

I have seen this pattern: borrower is putting twenty-five percent down on a primary residence in a major metro, strong credit, clean income documentation, conforming loan amount. AUS comes back Approve/Eligible with a Value Acceptance offer attached. We take the waiver, save the borrower the appraisal fee, save two weeks off the timeline, close in twenty-one days. That is the easy case and it happens a lot more often than borrowers realize. (Composite — common conforming-purchase pattern.)

I have seen the borderline pattern: borrower is at 80% LTV exactly, the property is a townhouse in a neighborhood with thin recent comp data, AUS does not offer the waiver. We look at whether bringing an extra one or two percent down would tip the file into waiver territory — sometimes it does, sometimes it does not, depends on what is driving the AUS decision. If the borrower has the cash and wants the speed, that math sometimes works. If they need the cash for other reasons, we just take the appraisal.

And I have seen the pattern where the AUS offered a waiver and we recommended against taking it. Borrower was buying a house that had been off-market for fifteen years, no recent sales on the street, a renovation history that was hard to verify. The waiver was offered because Fannie's model did not have enough data to flag the property — but the lack of data was itself a reason to want a human appraiser to look at the house. We ordered the appraisal anyway. It came in fine. But the alternative — closing without an inspection on a property nobody had professionally evaluated since 2009 — was a risk the borrower did not want to take on. (Composite — illustrative of when to decline an offered waiver.)

How the big retail lenders typically handle this

Big retail lenders run the same Fannie and Freddie AUS, so the waiver offers themselves are not different — the underlying agency system makes the call, not the lender. Where the difference shows up is in how the offer gets presented and whether the borrower understands the trade-off. At high file volume, the typical retail conversation is “good news, your appraisal is waived” without much discussion of what the borrower is giving up.

What the borrower is giving up: a third-party professional opinion of the value of the property they are about to pay hundreds of thousands of dollars for. The lender is comfortable not getting one because the agency is taking that risk on the back end. The borrower's contract still has its own appraisal contingency, which is a separate legal right that lives in the purchase contract — even if the lender waives the appraisal, you can still order one as a buyer if you want one, you just pay for it yourself and it is not a condition of the loan funding. Some buyers do exactly that on properties where they are paying near the top of the market, or on older homes, or on properties where they want a value opinion they can hold onto for their own records.

The piece that is worth being deliberate about: if a waiver is offered and you are buying a property that is straightforward, recently sold in the neighborhood, well-documented condition, you are probably fine taking it. If any of those factors are not true, the few hundred dollars and the extra two weeks to get an appraisal is cheap insurance against finding out something material about the house after you own it.