Fannie Mae Now Offering Property Inspection Waivers on Purchase Transactions
August 18, 2017, Fannie Mae released the Desktop Underwriter/Desktop Originator Release Notes, announcing that purchase transactions will now be eligible for consideration to receive Property Inspection Waiver (PIW) offers. The enhancements will apply to DU Version 10.0 and DU Version 10.1 loan casefiles submitted or resubmitted on or after August 19, 2017. Key points of the announcement are provided below.
Lenders will now receive a Property Inspection Waiver (PIW) option on certain purchase loan casefiles. A PIW is a fieldwork recommendation that results in an offer to waive Fannie Mae’s appraisal requirement. When a loan casefile is eligible for the PIW and the waiver is exercised by the lender, Fannie Mae accepts the submitted value estimate as the market value for the subject property. As such, Fannie Mae provides relief of representations and warranties on the value, condition, and marketability of the property. In order for a PIW to be considered on purchase transactions, a prior appraisal must be found for the subject property in Fannie Mae’s Collateral Underwriter® (CUTM) data.
Prior Appraisal Requirements
DU will compare the address for the subject property to the property addresses found in CU. When a property address match is found, DU will then use the information from the prior appraisal to determine if the loan casefile is eligible for the PIW. In some cases, the prior appraisal may not be acceptable. (Refer to the Fannie Mae Release Notes for additional information.)
Eligible Purchase Transactions
The PIW offer will be considered on the purchase transactions below.
- One-unit properties, including condominiums
- Principal residence and second home transactions with LTV/CLTV ratios up to 80%
- Loan casefiles that receive an Approve/Eligible recommendation
Note: The LTV/CLTV parameters for limited cash-out and cash-out refinance transactions will not be changed.
Ineligible Purchase Transactions
- Investment property transactions
- Two- to four-unit properties
- Properties located in a disaster impacted area
- Construction and construction-to-permanent loans
- Loan casefiles where the value of the subject property provided to DU is $1,000,000 or greater
- HomeStyle® Renovation mortgage loans
- Leasehold properties
- Loan casefiles using the Affordable LTV feature
- Cooperative units and manufactured homes
- Transactions using a Gift of Equity
- DU loan casefiles that receive an ineligible recommendation
Please refer to the following links for additional information:
DU Release Notes
Appraisal Waiver Fact Sheet