How to get a conventional home loan without an appraisal?

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Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
San Diego, California
Fannie Mae & in some cases Freddie Mac have been allowing real estate transactions to occur without an appraisal for the past few months. This is similar to a program that exists called HARP (Home Affordable Refinance Program) which is for borrowers that either owe very close to or more than what the home is worth. This is quite interesting to me that Fannie Mae and Freddie Mac are willing to back a property that they have no idea what the condition of the collateral is but hey, why not.

Over the past few months since the new rules have been released I have been testing this update and found a few things that in some cases will allow for what is called an "Appraisal Waiver". Not only does this apply to refinances but I have also now seen it multiple times in a case of a purchase transaction! Ok, let's skip the talk and get to the good stuff:

Requirements (or Erik's experience) to obtain an Appraisal Waiver:
  • 25% down or equity+
  • 700 FICO or greater
  • Debt to income ratio below 43%

If you meet the above requirements, don't be surprised if your lender let's you know that an appraisal is not required for the transaction.

What does that mean?!
  • You're not responsible for the cost of the appraisal which can be anywhere from 450-1000+
  • If there are blemishes with the property that may typically required to be repaired, now don't have to be.

Now again, we will never know whether or not an appraisal is going to be required and I'm sure there are many more analytics to this test than "Erik's" requirements above but it never hurts to find out. If you're looking to qualify for a conventional, government or portfolio home loan please feel free to reach out to us here at 800-779-4547 and we would be happy to help.