Selling Guide

Published June 5, 2018

B4-1.4-10: Property Inspection Waivers (06/05/2018)

This topic contains information on property inspection waivers (PIWs), including:


For certain loan casefiles, DU offers a PIW – an option to waive the appraisal requirement. For loan casefiles that are not eligible for a PIW, DU will require an appraisal reported on the appropriate appraisal report form for the type of property being appraised.

Prior Appraisal Requirements

In order for a PIW to be considered, a prior appraisal must be found for the subject property in Fannie Mae’s Collateral Underwriter (CU) data. DU will compare the address for the subject property to the property addresses found in CU. For refinance transactions, a borrower name match between the loan casefile and the prior appraisal must also be found. DU will 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. For example, if a CU “Overvaluation Flag” was issued on the prior appraisal, or the appraisal could not be scored, that prior appraisal will not be used and a PIW will not be offered on the new loan casefile.

Eligible Transactions

The PIW offer will be considered for the following transactions:

  • one-unit properties, including condos;

  • principal residence and second home transactions;

  • investment property refinance transactions;

  • certain purchase, limited cash-out, and cash-out refinance transactions; and

  • DU loan casefiles that receive an Approve/Eligible recommendation.

Ineligible Transactions

The following transactions are not eligible for a PIW:

  • properties located in a disaster-impacted area, unless Fannie Mae has received an appraisal of the property that was performed after the disaster;

  • construction and construction-to-permanent loans;

  • two- to four-unit properties;

  • HomeStyle Renovation and HomeStyle Energy loans;

  • DU Refi Plus loan casefiles (will continue to be eligible for the DU Refi Plus property fieldwork waiver);

  • leasehold properties;

  • community land trusts or other properties with resale restrictions, which include loan casefiles using the Affordable LTV feature;

  • co-op units and manufactured homes (including MH Advantage properties);

  • DU loan casefiles that receive an Ineligible recommendation;

  • transactions using gifts of equity; and

  • Texas Section 50(a)(6) loans.

Furthermore, the lender may not exercise a PIW offer and must order an appraisal if one or more of the following applies:

  • DU was unable to identify ineligible criteria in the list above (for example, Texas 50(a)(6) loans);

  • the lender is required by law to obtain an appraisal (see A3-2-01, Compliance With Laws);

  • the lender is using rental income from the subject property to qualify the borrower; or

  • the lender believes that an appraisal is warranted based on additional information the lender has about the property or subsequent events, such as a natural disaster (see B2-3-05, Properties Affected by a Disaster).

Note: The lender may not exercise a PIW offer if an appraisal is obtained for the transaction.

Refer to B5-5.2-03, DU Refi Plus and Refi Plus Property Valuation and Project Standards for additional information about DU Refi Plus property fieldwork waivers.

Representations and Warranties

When a loan casefile is eligible for a PIW and the waiver is exercised by the lender, Fannie Mae accepts the value estimate submitted by the lender as the value for the subject property. See A2-2.1-06, Representations and Warranties on Property Value, for more information.

Exercising a PIW

A lender may only exercise the PIW if

  • the final submission of the loan casefile to DU resulted in a PIW offer,

  • an appraisal is not obtained for the transaction, and

  • the PIW offer is not more than four months old on the date of the note and the mortgage.

Lenders that elect to exercise the PIW must include SFC 801 at delivery. Lenders may not adversely select against Fannie Mae in determining which PIW offers to accept. Fannie Mae may monitor the lender’s exercise of the PIW offers and delivery of loans to Fannie Mae, and may take appropriate measures if adverse selection is identified.

Related Announcements

The table below provides references to the Announcements that have been issued that are related to this topic.

Announcements Issue Date
Announcement SEL-2018-05 June 05, 2018
Announcement SEL-2018-04 May 01, 2018
Announcement SEL-2018-02 February 27, 2018
Announcement SEL-2017-08 September 26, 2017
Announcement SEL-2017–03 March 28, 2017
Announcement SEL-2016–09 December 6, 2016
Announcement SEL-2016–08 October 24, 2016