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Fannie Mae PIW and Freddie Mac ACE

Appraisal Waiver for Purchase Transactions: Fannie Mae PIW and Freddie Mac ACE.

Appraisal Waiver for Purchase Transactions: Fannie Mae PIW and Freddie Mac ACE.

Fannie Mae and Freddie Mac announced that they will begin issuing appraisal waivers for purchase transactions. New Penn Financial is pleased to announce the acceptance of appraisal waivers on purchase transactions. Both Freddie Mac and Fannie Mae have updated LPA and DU, respectively, to permit appraisal waivers on purchase loans that meet certain key loan characteristics.

Fannie Mae PIW (Property Inspection Waiver)

Effective August 21, 2017 when a loan is eligible for a PIW and the waiver is accepted by the lender, Fannie accepts the submitted value estimate as the market value for the subject property. Lenders still have the option of accepting or declining the PIW offer. Eligibility is limited to:

  • One-unit single family properties and condos
  • Primary and Second Homes
  • Maximum LTV of 80%
  • The loan must receive an Approve/Eligible recommendation
  • Value and purchase price of the subject property must be less than $1,000,000
  • Additional restrictions apply and can be found in the New Penn Financial Conventional product profile or by reviewing the Fannie Mae PIW Fact Sheet.

In order for a PIW to be considered on a purchase transaction, 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. If a match is found, DU will use the information from the prior appraisal to determine if a PIW can be issued. Keep inmind that with each DU submission, the CU data will be confirmed. If a new appraisal is found, the PIW offer may be lost.

Fannie Mae anticipates that PIW’s will be issued on less than 5% of purchase transactions.

Freddie Mac ACE (Automated Collateral Evaluation)

In June, Freddie Mac introduced the Automated Collateral Evaluation (ACE) for certain eligible no cash-out refinances submitted via Loan Product Advisor (LPA). Beginning September 1st, this offering was extended to purchase loans submitted through LPA. When a loan is eligible for an ACE and the waiver is accepted by the lender, Freddie Mac accepts the submitted value estimate as the market value for the subject property. Lenders still have the option of accepting or declining the ACE offer. Eligibility is limited to:

  • One-unit single family properties and condos
  • Primary and Second Homes
  • Maximum LTV of 80%
  • The loan must receive an Accept recommendation
  • Value and purchase price of the subject property must be less than $1,000,000
  • Additional restrictions apply and can be found in the New Penn Financial Conventional product profile or by reviewing the Freddie Mac ACE Fact Sheet.

For both PIW and ACE, the appraisal waiver may not be utilized if New Penn Financial is aware of or believes there are adverse physical property conditions, or New Penn Financial is required by law to obtain an appraisal.

When a PIW or ACE is utilized Destiny must be updated to reflect the use of the waiver. Receipt of an appraisal for any reason renders the PIW or ACE findings ineligible.

The New Penn Financial Conventional, HomeReady and HomePossible product profiles have been updated on the Loan Programs page.