Appraisal Waivers Explained: What Homebuyers Need to Know

A home appraisal is important for protecting both buyers and lenders by making sure the home’s value matches the purchase price. However, it can slow down the homebuying process and add extra costs. But what if you could skip this step entirely? By qualifying for an appraisal waiver, you can save both time and money, making the mortgage experience much smoother. In this guide, we will explain what appraisal waivers are and when they make sense. We will also go over their eligibility requirements to help you decide if they are right for you. Let’s get started!

What is an Appraisal Waiver?

An appraisal waiver, officially known as a Property Inspection Waiver (PIW), lets you skip the in-person appraisal process when buying or refinancing a property. Instead of sending a licensed appraiser to inspect the home and estimate its value, lenders rely on automated information. Tools like Fannie Mae's Desktop Underwriter or Freddie Mac's Loan Advisor analyze market data, recent sales, and past values to assess the property’s worth.

Benefits of an Appraisal Waiver:

• Save Money: Home appraisals (or “home valuations”) can cost between $300 and $500. That’s extra cash you can use for moving expenses, renovations, or other home-related costs instead.
• Save Time: Appraisal waivers speed up the process of loan approval. This helps you get to the closing table faster without delays from scheduling or waiting for a formal report.

Appraisal Waivers in Mortgage vs. Waiving the Appraisal Contingency in Real Estate Contracts: What’s the Difference?

Lender-issued “appraisal waivers” and “waiving the appraisal contingency” in a real estate contract might sound similar, but they serve different purposes and involve different decisions.

The Property Inspection Waiver (PIW)—our focus here—is granted by your lender based on data analysis from tools like Fannie Mae’s Desktop Underwriter. As mentioned earlier, these tools review property records and market trends to estimate value. If the sale price fits within the acceptable range, the lender can move forward without requiring an in-person appraisal.

On the other hand, waiving the appraisal in a real estate contract typically happens between the buyer and seller. Here, both parties agree to skip an appraisal contingency, meaning the buyer agrees to purchase the home regardless of whether it appraises for less than the purchase price. While this can make a buyer’s offer more appealing, it also comes with risk—if the home is worth less than the agreed price, the buyer could end up overpaying.

The bottom line? A PIW is backed by lender assessment tools, while contract waivers put more risk on the buyer’s shoulders.

Why Mortgage Lenders Offer Appraisal Waivers

Lenders only grant appraisal waivers when the situation makes sense. Here are three key reasons they might skip the in-person valuation:

1. Recent Appraisals

If the property was appraised for a previous transaction (e.g., during a prior sale or refinancing), lenders might rely on that data to determine today’s value instead of ordering a new appraisal. For example, if a home was appraised six months ago before a refinance, there’s little need for another costly and time-consuming inspection.

2. Increased Efficiency

Appraisals slow down the underwriting process. The Property Inspection Waiver removes that obstacle, meaning buyers and lenders can move more quickly toward finalizing the loan. This streamlined approach improves the overall mortgage experience—less time waiting and more time getting excited about your new home.

3. Sufficient Local Data

Accurate and up-to-date local data is another deciding factor. For example, if there are plenty of recent sales in the area (known as real estate comps), lenders can use this information to estimate the home's value. This helps them assess the property’s worth with greater confidence, lowering the risk of larger financial loss if the buyer doesn’t repay the loan.

Requirements for Appraisal Waivers

Not every buyer or home will qualify for a PIW—lenders still have to weigh efficiency against risk. But if you meet the right criteria, you can improve your chances of getting an appraisal waiver through lenders like Academy Bank:

• Strong Credit: A good credit score reflects reliability and strengthens your waiver eligibility.
• Down Payment or Equity: A minimum of 20% down is typically required, although exceptions may apply (like 3.5% down for FHA loans or 0% down for eligible USDA rural loans).
• One-Unit Property: Single-family homes and condos are usually eligible. However, multi-unit homes or properties with uncommon features could still require appraisals.
• Recognized Property Data: The home must be in the system used by Fannie Mae or Freddie Mac, with recent and comparable data available.

How to Receive an Appraisal Waiver Through Academy Bank

Appraisal waivers can offer real advantages, especially if you value speed and savings in your homebuying or mortgage refinancing process.

If you are looking to skip the traditional home appraisal, qualifying for a Property Inspection Waiver through Academy Bank is simple!  Once you submit a real estate contract and loan application, we will run your details through Fannie Mae’s Desktop Underwriter system. If your property and financial profile meet the requirements, a PIW will be automatically issued during the underwriting process.

Ready to explore your options? Compare Academy Bank’s home loan products to find the best mortgage for your needs. And to receive expert guidance throughout the entire homebuying process, contact our team of mortgage officers.

Your new home awaits—let’s get started!

 

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