Fannie Mae is updating Desktop Underwriter® (DU®) effective Saturday, August 19, to offer Property Inspection Waivers (PIWs) on some purchase transactions (view DU Release Notes). This update responds to market changes, and allows our lenders to offer your borrowers a choice for efficiency and cost savings by foregoing an appraisal on some lower-LTV loans.
Eligibility is limited to one-unit principal residences and second homes up to a maximum 80 percent loan-to-value ratio. It is estimated that PIW offers will be issued on less than 5 percent of purchase transactions. Offer rates will vary by lender and fluctuate over time.
Lenders have the option to exercise a PIW offer, and may not accept it if they have any reason to believe that a full appraisal should be provided (for example, if there was a hurricane or other natural disaster in the area of the property), or if the borrower wants an appraisal. View more information about PIWs.
Borrowers always have the choice to obtain an appraisal. Based on Fannie Mae’s experience with purchase appraisal waivers, we expect the acceptance rate on appraisal waivers for home purchases to be low. Many home buyers want an appraisal to support the price they pay for a home, and the majority of purchase contracts include a contingency clause for an appraisal.
Fannie Mae continues to require full appraisals on the vast majority of purchase money mortgages to establish market value of homes and provide valuable input to our appraisal database to support Collateral Underwriter® analytics and future innovations.
TMC - Chief Operating Officer