On a conventional mortgage backed by Fannie Mae or Freddie Mac, you can sometimes skip the traditional home appraisal through what Fannie Mae calls a “value acceptance” offer, better known in the industry as an appraisal waiver. The offer appears automatically when your lender runs your file through the automated underwriting system, and it typically saves $400 to $800 in closing costs and a week or more on the timeline to closing.
You don’t apply for it. Either the system offers it or it doesn’t, and even when it does, your lender decides whether to use it.
How the Offer Is Generated
When your lender submits your loan through Fannie Mae’s Desktop Underwriter or Freddie Mac’s Loan Product Advisor, the system checks the property address against a database of prior appraisals, public records, and recent sales. If the data supports a reliable value, the findings report comes back with a value acceptance offer, and no licensed appraiser needs to visit the home.1Fannie Mae. Value Acceptance (B4-1.4-10)
One prerequisite trips up a lot of files: the system generally needs a prior appraisal already on record for that specific property. Without a baseline, the automated system almost never offers a waiver.1Fannie Mae. Value Acceptance (B4-1.4-10) Newly built homes, and homes that have only ever been financed with non-conforming or government-backed loans, tend to fall into this gap.
The offer is also conditional on your overall loan file. Desktop Underwriter needs to return an “Approve/Eligible” recommendation. If your credit profile or debt-to-income ratio pushes the file into a riskier category, no waiver appears no matter how much equity you have.1Fannie Mae. Value Acceptance (B4-1.4-10)
Who Qualifies
Eligibility depends on your loan-to-value ratio, the property type, and the transaction. The Federal Housing Finance Agency recently raised the maximum LTV for purchase-money appraisal waivers from 80 percent to 90 percent.2U.S. Federal Housing Finance Agency (FHFA). FHFA Announces Updates to Enterprise Policies on Appraisals, Loan Repurchase Alternatives, and Pricing Notifications A buyer putting as little as 10 percent down on a primary residence or second home can potentially qualify.
Refinances on investment properties face tighter caps. Limited cash-out refinances on investment properties cap at 75 percent LTV, and cash-out refinances on second homes or investment properties cap at 60 percent LTV.3Fannie Mae. Value Acceptance Investment property purchases are not on the list of eligible transactions at all, so if you’re buying a rental, plan to pay for a full appraisal.
There’s a separate lane for rural high-needs value acceptance on purchase transactions for principal residences in designated rural areas, with LTVs up to 97 percent for borrowers earning at or below the area median income.1Fannie Mae. Value Acceptance (B4-1.4-10)
Properties and Situations That Never Qualify
Some property types are excluded categorically, regardless of your finances:1Fannie Mae. Value Acceptance (B4-1.4-10)
- Multi-unit properties. Duplexes, triplexes, and four-unit buildings always require a traditional appraisal.
- Co-ops and manufactured homes.
- Properties valued at $1,000,000 or more. Seven-figure values trigger a mandatory appraisal.
- Leasehold properties, where lease terms affect value.
- Properties with resale restrictions, such as community land trust homes or deed-restricted affordable housing.
Loans where rental income from the subject property is used to qualify the borrower are also ineligible, even on one-unit properties that would otherwise be fine.3Fannie Mae. Value Acceptance Homes in FEMA-declared disaster areas commonly lose eligibility too, because the system can’t confirm whether the structure is still intact.
FHA, VA, and USDA Loans Don’t Have Appraisal Waivers
This is the most commonly missed limitation. Appraisal waivers exist only for conventional conforming loans sold to Fannie Mae or Freddie Mac. If you’re using an FHA, VA, or USDA loan, you will need a traditional appraisal regardless of your equity, credit score, or property type.
FHA’s handbook requires the lender to order a new appraisal for every case number assignment, with no waiver option.4U.S. Department of Housing and Urban Development. FHA Single Family Housing Policy Handbook 4000.1 FHA appraisals also do double duty: the appraiser checks for health and safety issues like peeling paint, structural problems, and inadequate water supply. VA loans use an independent VA-assigned appraiser who verifies value and minimum property requirements. USDA works on the same model. If you’re using any of these programs, plan for the appraisal fee and the extra time in your closing timeline.
What a Waiver Actually Saves You
A standard single-family home appraisal runs roughly $400 to $800 in most markets. Complex properties and high-cost areas can push fees above $1,000. A value acceptance offer eliminates that fee entirely and cuts the one-to-three-week delay that scheduling, inspecting, and delivering an appraisal report adds to closing.
In competitive markets, the time savings can matter as much as the dollars. A faster close makes your offer more attractive to a seller, especially when you’re up against cash buyers who already skip the appraisal step.
What “No Appraisal” Really Means for You
When a lender accepts the value acceptance offer, Fannie Mae accepts the estimated value the lender submitted and does not hold the lender responsible for representations and warranties related to the property’s value and marketability.5Fannie Mae. Representations and Warranties on Property Value That’s a real incentive for lenders to use the waiver when it’s offered.
But Fannie Mae explicitly does not warrant that the estimated value is the actual value, and the lender is not permitted to tell you Fannie Mae “appraised” or “valued” the property.5Fannie Mae. Representations and Warranties on Property Value For you as the borrower, this matters: no one has independently verified what the home is worth. The automated system confirmed that the price looks reasonable in the data. A professional walking through the house is a different exercise.
When to Order an Appraisal Anyway
Just because you can skip the appraisal doesn’t mean you should. A few situations where paying for one anyway makes sense:
- Hot or unfamiliar markets. If bidding wars have pushed prices well above recent comparable sales, an independent appraisal is cheap insurance against overpaying by tens of thousands.
- Older homes or visible deferred maintenance. An appraiser physically walks the property and notes condition issues. The automated system doesn’t know the roof is sagging.
- Thin comparable sales data. In rural areas or neighborhoods with few recent transactions, the algorithm’s confidence drops. A local appraiser fills in the context.
- Refinances where you plan to borrow close to your maximum allowable LTV. An inaccurate automated value could leave you underwater if the market dips.
You can ask your lender to order a traditional appraisal even after a waiver offer appears. You’ll pay the fee and wait for the report, but you’ll close with a professional opinion of value in your file. Some borrowers use the lender’s waiver and separately hire their own appraiser for personal confidence, though lenders won’t use that second report for underwriting.
Appraisal Waiver Is Not the Same as Appraisal Contingency Waiver
These two terms sound alike and protect against completely different risks. Confusing them in a real transaction can cost you money.
An appraisal waiver, or value acceptance, is a lender-side decision. The lender agrees not to require a traditional appraisal as part of the loan approval. It comes out of the automated underwriting system and has nothing to do with your purchase contract.
An appraisal contingency waiver is a buyer-side decision written into the purchase contract. When you waive the appraisal contingency, you’re telling the seller you won’t back out if the home appraises below your offer. If it does come in low, you cover the gap out of pocket or you forfeit your earnest money. Buyers in competitive markets sometimes waive this contingency to strengthen an offer, but the financial risk is real. You can receive a lender appraisal waiver and still keep your appraisal contingency, or the reverse. They operate independently.