Greg Cowart on Zillow
Greg Cowart - Mortgage Broker or Lender at The Securus Group
Greg Cowart - Roseville Loan Guy

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No appraisal on a purchase? Yes, it’s real.

It sounds a little on the crazy side but it is true, Fannie Mae and Freddie Mac have announced that some of the purchase loans underwritten to their guidelines will no longer require appraisals. They’ve been allowing this on some loans for years (FHA and VA also does for refinances if they already back the loan), but this is the first time ever for loans used to purchase a home. 

Fannie and Freddie are the quasi-governmental organizations that create the guidelines for about half of all the mortgages done in America today. When they make an announcement like this it’s big and, while it won’t nearly apply to all the loans underwritten to their guidelines, the fact that this is happening at all is very meaningful in the market.

The appraisal waiver will be issued on a relatively small percentage of purchase transactions, mostly because of the high standards that need to be met to receive the waiver. To receive the property inspection waiver eligibility is limited to a maximum of 80% loan-to-value on one unit properties (no condos as I understand the rule), principal residences or second homes only, and there was a prior appraisal collected in the Fannie Mae database from a previous loan transaction.

These rules will severely limit who and what transactions get the waiver, but it is a start and will be very helpful in speeding up those transactions that receive the waiver.

Fannie Mae has already started this (August 19th) and Freddie Mac will begin on September 1st and we at American Pacific Mortgage are participating in the program. Let me know if you have any questions.

Greg Cowart

(916) 412-3313

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