Both Fannie Mae and Freddie Mac started collecting data on every appraisal they received a few years back (yes, big brother is always watching). They began storing every detail from the appraisals and created their own information database which pinpoints a specific property and looks at all of the recent information they have about properties around it in order to determine if they think the value or sales price is accurate. Since Fannie and Freddie are the primary sources of mortgage providers across the U.S., chances are they have all of the information for the home that just sold a few doors down. As long as they feel like the value is not inflated or they do not feel that you are in a declining market, they might offer you an appraisal waiver which means they are good to go with the value of the property offered.
Not every loan qualifies for an appraisal waiver, so let’s look at what is need to qualify. Fannie Mae
- Must be a one-unit property (including for condos).
- For a rate/term refinance on a primary residence or second home, you need at least 10% equity; 25% on investment properties.