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Qualify for a no appraisal home loan

No Appraisal Home Loan Saves Time and Money

2018 home loans use big data and automation to make your mortgage easier to qualify for and less expensive.

  • No appraisal means loans close 7-10 days faster
  • No appraisal fee will save you between $300 – $700
  • Instant approval from automated underwriting system (AUS)

No Appraisal Needed?

One of the great benefits of a roaring economy is that home prices and home equity becomes more predictable.

Low unemployment, increasing home values, and innovative financial evaluation technology are all contributing factors to reducing risk to lenders.

Big data means bigger decisions can be made automatically by comparing your accurate loan application to millions of other applications that have already been approved.

Unlike the sub-prime (toxic) loans of the past, making the loan process easier for borrowers does not mean riskier loans.

Financial technology is advancing to the point where many more qualifying factors can be evaluated using data and algorithms, relying less on a human underwriter’s opinion.

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Conventional home loan lenders are leading the charge to save you time and money with this new technology.

Freddie Mac Automated Collateral Evaluation (ACE)

Freddie Mac is now allowing lenders to upload an accurate loan application to it’s automated underwriting system (AUS), Loan Product Advisor (LPA), and receive an instant answer if no appraisal will be required.

Loans Eligible for No Appraisal

  • Must receive and “Accept” decision from automated underwriting system
  • Single family home used as primary residence or second home
  • No cash out refinance with loan to value (LTV) of 80% or less*
  • Purchase loan with LTV of 80% or less*

* The AUS uses the estimated value of property on a refinance loan, or the purchase price field on the loan application for a new home purchase.

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Loans NOT Eligible for No Appraisal

  • If the lender has already ordered and submitted an appraisal of the home
  • Cash out refinances are not allowed
  • Investment properties
  • 2 to 4 unit homes are not eligible
  • Condominiums, manufactured homes, or leasehold estates
  • Properties with resale restrictions (affordable housing)
  • Construction or rehab loans
  • Non-arm’s length transactions
  • Purchase of a foreclosure property (as identified in sales contract)
  • Texas Equity Section 50(a)(6) mortgages
  • Refinance with an estimated home value greater than $1 million
  • Purchase price greater than $1 million
  • Freddie Mac Relief Refinance Mortgages

Fannie Mae Property Inspection Waiver (PIW)

Fannie Mae‘s automated underwriting system, Desktop Underwriter (DU) or Desktop Originator (DO) will analyze your accurate loan application, and compare your loan to it’s database of over 26 million appraisal reports to support automated value.

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Loans Eligible for No Appraisal

  • Single family home or condominium used as primary home
  • Limited cash-out refinance up to 90% LTV for primary or second home
  • Investment properties up to 75% LTV
  • Cash-out refinance on primary home up to 70% LTV
  • Cash-out refinance on second home or investment property up to 60% LTV
  • Purchase of primary residence or second home up to 80% LTV

* The AUS uses the estimated value of property on a refinance loan, or the purchase price field on the loan application for a new home purchase.

Loans NOT Eligible for No Appraisal

  • Homes located in a disaster impacted area
  • Construction or rehab loans
  • Multi-family homes not eligible
  • Home value greater than $1 million
  • HomeStyle renovation or energy mortgages
  • DU Refi Plus mortgages
  • Texas 50(a)(6) loans
  • Leasehold, community land trust, or other homes with resale restrictions
  • Loans that mortgage insurance provider requires an appriasal
  • Rental income from subject property is being used to qualify

How to Qualify for a No Appraisal Loan

Simply meeting the guidelines listed above does not guarantee that you will qualify for a no appraisal loan.

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Both Fannie Mae and Freddie Mac programs will still analyze your entire loan application, including credit history, credit score, employment, income and assets.

Since these programs are fairly new, expect the guidelines to be more strict. Working with an experienced loan officer will give you a much better chance of qualifying for a no appraisal loan.

An experienced loan officer is much more likely to complete an accurate loan application the first time, and give you a better chance of an automated approval.

Experience the Difference

An accurate loan application is incredibly important, and even more so when you’re attempting to qualify for these types of exceptions and waivers.

Call center lenders, and lenders that promise automatic approvals based on you filling out a loan application online run a greater risk of mistakes or inaccurate information.

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Because the estimated value on the loan application is being used, it’s important that all information is as accurate as expertly possible.

Inexperienced loan officers or consumer entered values may not accurately reflect the actual home values where you’re financing.

It doesn’t cost more to use a professional, but it could cost you an appraisal if a dumb mistake is made by someone that doesn’t solve mortgage problems for a living.

Warning to Home Buyers

If you are buying a home, the appraisal is just one part of the due diligence that you should do to protect yourself against surprises.

You should always hire your own home inspector to do a detailed inspection of the property to uncover any potential issues that could cost you money later on.

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If you receive a no appraisal approval on a home that has an illegal additions, or other non-lendable factor, it could mean big problems in the future if you are trying to refinance the home.

Getting Your Questions Answered

If you have questions about no appraisal home loans, there are several ways we can help.  You can always ask a question here, and an experienced mortgage professional will answer you within hours.

You may also ask any questions you have below in the comments section below.  I respond to comments very quickly.

About the Author

Scott Schang

A 20 year veteran of the Mortgage and Real Estate industry, I am passionate about educating and empowering consumers. I have been writing about consumer protection issues, and making sense of complicated real estate and mortgage topics on this website since 2007

Leave a Question or Comment About this Topic

  • Carolyn says:

    I am looking to purchase a property that has 2 houses on it. My use will be a primary residence for me and immediate family members. The mortgage company was unable to find an appraiser willing to appraise it due to there being no comps as it is a highly unusual home ( converted barn house and seperate two story house ). Where can I find a lender to wave the appraisal ?

    • Scott Schang says:

      Hi Carolyn, it is unlikely that you will get an appraisal waiver on this property. Lenders do not simply decide to not require an appraisal, if the automated underwriting system (AUS) determines that the estimated value and risk profile are such that an appraisal is not required for approval, it will return that decision.

      It’s definitely worth talking to another lender though. Not all lenders will treat this scenario the same way.

      If you would like a second opinion, you can shoot me an email at scott@findmywayhome.com and let me know what State this property is in.

      Hope this helps?

  • Vi says:

    Hi, I own my CA home outright. I would like to borrow $40,000 from its $454 000 value with a no appraisal loan. Can you recommend a company?

    • Scott Schang says:

      I would start at your bank maybe – and a home equity line of credit might make more sense than a 30-year loan. With that much equity, I don’t think you would have any issues with the appraisal. Many independent lenders cannot lend less than $100k, that seems to be the cut-off. I would try your local bank or a credit union first.

      Hope this helps?

  • Steve Merrill says:

    Scott, I am looking to refinance my residence (no appraisal loan) so that I can purchase another home in Arizona. The purchase in Arizona is cash only, so I need to move fast. Thanks, Steve

    • Scott Schang says:

      Hi Steve, the appraisal waiver is going to be determined by the automated underwriting system, and I can tell you that they’ve been coming a lot easier this year with COVID-19 situation. It sounds like you might be taking cash out from your personal residence for the cash purchase in AZ? Taking cash out does reduce the maximum loan to value that will trigger an appraisal waiver, but no point guessing, all of this can be figured out pretty quickly once you complete an application.

      What State is your home in that you want to refinance? Shoot me an email at scott@findmwywayhome.com, let me know where you’re located, and I can introduce you to someone I know and trust that can start working on that for you.

      Hope this helps?

  • SHARON ALLEN says:

    I THERE A REFINANCE LOAN FOR MANUFACTURED HOMES I AMPAYING 15.15% INTERST WITH DIETEC ANDTHEY WON’T ALLOW REFINANCE. I HAVE HAD THE LOAN SINCE 2001.

    • Scott Schang says:

      Hi Sharon, if it is a manufactured home that is NOT on a permanent foundation, on land that you own, then it will be very difficult. If your manufactured home is on a permanent foundation, then yes, there are refinance options available.

      If you would like to shoot me an email with more details about the home, and what State you’re in, I can try to get you pointed in the right direction.

      Hope this helps?