Appraisal Waivers
Sometimes the automated underwriting system accepts the value without an appraisal. It is not something you request. It is something the file either earns or does not.
How a waiver actually happens
The system offers it. Nobody at the lender decides it.
- A waiver is offered by the automated underwriting system when the final submission of the loan file produces that offer. It is a system output, not a lender decision.
- Both major agency automated systems have their own version, and each has its own eligibility logic.
- The offer has a shelf life. One system requires the offer to be no more than four months old at the note date, the other uses a one hundred twenty day window.
- If a full appraisal has already been obtained, the waiver cannot be used. The appraisal has to be used instead.
- Waivers exist on conventional financing. Jumbo and non-qualified mortgage programs in our guidelines do not permit them.
- A waiver removes the appraisal, not the underwriting. Income, assets, and credit are reviewed exactly the same way.
No appraisal appointment
Faster closing timeline
One less cost at closing
Conventional purchase or refinance
Automated system driven
No value dispute to manage
When The System Will Not Offer One
The exclusion list is long and specific, and it is worth knowing before you count on a waiver.
Property type knocks out a large share of files. Manufactured homes require a full appraisal. So do proposed construction and construction-to-permanent transactions, renovation programs, leasehold properties, and homes with resale price restrictions or community land trust ownership. An investment property where rental income is being used to qualify is excluded, because the appraisal is what establishes the market rent.
Transaction type accounts for most of the rest. A gift of equity purchase is excluded. A non-arm’s length transaction is excluded on at least one of the two systems. Texas home equity cash-out transactions are excluded on both. One program also caps the option by value, excluding files where the purchase price or estimated value exceeds one million dollars.
Then there are the situational rules. If an appraisal is required by state law, the waiver cannot override that. If the lender has information suggesting an appraisal is warranted, the waiver is not exercised. And a property in a recently declared disaster area generally needs eyes on it regardless of what the system said before the event.
What a waiver does and does not do for you
Six things worth understanding before you plan around one.
You Cannot Ask For It
There is no form, no request, and no way to shop for one. The automated system either returns the offer on the final submission or it does not. Any lender promising you a waiver up front is describing a hope, not a process.
It Saves Real Time
The appraisal is often the longest single step in a closing, especially in busy markets or rural areas where appraiser availability is thin. Removing it can pull a week or more out of the timeline.
It Removes The Appraisal Cost
That is a genuine savings at closing, and it is the reason most borrowers care. It does not change any other cost in the file.
It Removes The Low Appraisal Risk
On a purchase, a value that comes in under the contract price forces a renegotiation, a larger cash contribution, or a dead deal. A waiver takes that risk off the table entirely.
Ordering An Appraisal Early Can Cost You The Option
Once a full appraisal exists in the file, it has to be used. On a refinance in particular, waiting for the automated findings before ordering anything is the sequence that preserves the choice.
It Is Not Available Above Agency Limits
Jumbo and non-qualified mortgage guidelines in our library do not permit appraisal waivers. If your loan amount is above the conventional limit, plan on an appraisal.
Hear From Homeowners Like You
Frequently Asked Questions
The questions we get about appraisal waivers.
No. It is offered by the automated underwriting system when the loan file is submitted, based on the property, the transaction, and the data the agencies already hold. Neither you nor the lender can request or negotiate one.
No. It means the agency accepts the value without a new appraisal. Your income, assets, credit, and the property’s eligibility are all underwritten normally.
The offer has to be current at the note date. One system requires the offer to be dated within four months of the note date, the other uses a one hundred twenty day window. A delayed closing can force an appraisal after all.
No. Once a full appraisal has been obtained it must be used. This is why the order of operations matters on a refinance.
Not in the same form. Those programs have their own appraisal rules, and their streamline refinance products generally do not require a new appraisal at all, which achieves a similar result by a different mechanism.
Most often property type or transaction type. Manufactured homes, leaseholds, construction and renovation loans, gift of equity purchases, investment properties using rental income, and homes with resale restrictions are all excluded regardless of how strong the borrower is.
It removes the risk of a low appraisal derailing the transaction, yes. But you cannot count on receiving one, so it is not a strategy for a deal that only works at an optimistic value.
Find out what you qualify for
The practical advice is simple. Do not pay for an appraisal before the automated findings come back, and do not build your timeline around a waiver you have not been offered yet. We will tell you what the system returned as soon as we have it.
Get Pre-QualifiedAppraisal waivers are offered by agency automated underwriting systems and cannot be requested. Eligibility, offer validity windows, and exclusions vary by agency and investor and are subject to change. Waivers are not available on jumbo or non-qualified mortgage programs, and numerous property and transaction types are excluded. Not all applicants will qualify. This is not a commitment to lend.