FNMA Rural High-needs Appraisal Waiver

FNMA Rural High-needs Appraisal Waiver

…which counties in the US qualify for this kind of FNMA rural high-needs appraisal waiver…

Appraisers, you may not be affected by this new FNMA waiver process. Then again, if you service certain ‘poverty’ counties in the US, you may. A surprise to me… Kings County, New York [Brooklyn], is one such county.

It probably would be in your best interest to examine this blog, and then click on the map link within the article.

The map will show which counties in the US qualify for this kind of FNMA rural high-needs appraisal waiver. Once the map opens, you can enlarge and move it so you can see your geographic area better. There is a color code on the lower right side of the page.

If a waiver is accepted, the property STILL has to have a qualified property inspection done to report CONDITION.

NOTE: a borrower NEVER has to accept a waiver, in any of the waiver programs that are available. The lenders will ‘sell’ them on the cost savings, but borrowers still can request having an appraisal done so that there is no nagging question about the property value and loan amount. This might be a point you can use if/when advertising your appraisal business in local media.

Excerpt from CLA

Fannie Mae Will Consider Appraisal Waiver in Rural High-Needs Areas

For certain home purchase transactions in rural high-needs areas, Fannie Mae may offer to waive the appraisal in exchange for a mandatory home property inspection. The rural high-needs appraisal waiver seeks to help low- to moderate-income borrowers avoid unanticipated, potentially high-cost, post-purchase repairs.

This offer will be considered only for property locations designated as rural high-needs by the Duty to Serve requirements…

The following eligibility requirements must also be met:

Purchase transactions only
Desktop Underwriter (DU) loan casefile receives an Approve/Eligible recommendation
One-unit principal residence properties (excluding manufactured homes)
Borrowers with income equal to or less than 100% of the area median
LTV ratios up to 97%; and CLTV ratios up to 105% with a Community Seconds®

Dave Towne
Latest posts by Dave Towne (see all)
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on e-AppraisersDirectory.com

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18 Responses

  1. Avatar LANoble says:

    Saddens me deeply Dave that High Appalachia was targeted and carved out in this appraisal waiver strategy. One would think with 1,000-year floods and environmental concerns, this would be the last place to start cutting corners. There is no shortage of appraisers ~ there is, however, a shortage of clients willing to pay appraisers the cost of doing business properly and want to take on the task themselves. I’m unsure of the savings to homeowners because inspections in rural areas aren’t cheap, either. In that respect, the concept of consumer savings is a moot point. Layer bad data and undeniable demographic shifts, I’m just uncertain this is a well thought out plan for the long-term for my state. I’ve resolved the movement is going to have to run its course but confident the eyes of regulators and attorney’s are watching because WV is one of the most litigious states in the nation. I hope REALTORS are well informed of this liability coming.

    • Lawsuit targets would be brokers; inspection companies and lenders but the DEEPEST pockets that hold the greatest accountability imho is FNMA.

      I’d start designing a special web page & marketing program to promote this new source of potential business to replace that lost to appraisal waivers. I’m serious.

  2. Avatar MD appraiser says:

    I don’t get it. Is Baltimore City affected by this waiver process and considered RURAL high-needs?

  3. Avatar Jeff Weeks says:

    Every day I have lenders calling me asking me which counties I service because the AMC cant find an appraiser in the area. One after another. Yet I have yet to receive a call from the AMC. Get rid of the AMC and you will find plenty of appraisers who now will be looking for/or willing work

  4. Avatar Advocate says:

    Waiving appraisals in rural areas is the most riskiest move ever. Most rural areas are impacted more when the economy turns south. Rural areas do not have continuity among property types, condition or even parcel sizes. Allowing the borrower to go over 100% LTV, that is just reckless!  How are they verifying the purchase price is not overinflated? We all know the UAD data  can not determine an appropriate comparable. This will destroy rural communities not if, but when the economy turns south. It is time for states and localities to pass legislation preventing any real estate transaction without an appraisal by a licensed professional appraiser!

    The GSE’s have taken away the risk to the lender and have shifted it to the taxpayer. This is nothing more than corporate greed! Someone please explain how this is protecting the public?

    How did this get past the public comments required by FHFA? Oh wait, there were none!

  5. Avatar Jack Of All Trades says:

    Fannie Mae just wants appraisers to do hybrids and not inspect, the ceo said so a while back

  6. Baggins Baggins says:

    This will quickly become a free for all, effective measures to make sure consumers are aware of their options and risk are not currently in place. Sales agents, mortgage agents, attorneys if fsbo, and consumers themselves should all have to sign the same several page document with additional very clear disclosure explaining basic details and options pertaining to waivers, hybrids, auto exceptions like low ltv, etc. Want to cut out the appraiser, make sure consumers know the risk. Consumers should be given time to think, and more robust checks and balances protections implemented rather than less. We’re living in a bubble and these guys just want to slam dunk more deals.

  7. Avatar EJ says:

    What is a state licensed inspector? What are the requirements for a state licensed inspector? I’ve never heard of these in Georgia.

    • Avatar EJ says:

      Is it a home inspector?

    • Good question. Most states have no license requirement. Absent that, from personal experience and first hand knowledge I know ASHI Certified Appraisers have extensive training and a comprehensive two part test. A practical inspection and a written demo report.

      Others, usually owned by Title Insurance Corporations or conglomerates like First American are nothing more than warranty or limited appliance insurance policies. They MAY cover service to the dishwasher or FAU, but NOT if the entire termite eaten upper floor collapses; or the under house gas leak causes the house to blow up (ASHI FOUND such a leak in the REO my best friend bought).

  8. Avatar Advocate says:

    Tell Fannie Mae directly your thoughts on the Waiver Program.


  9. Avatar chris says:

    Ya, lets not do appraisals in rural areas   LMAO !!!

  10. Avatar Jeff Weeks says:

    Rural appraisals don’t fit in their little box

  11. Avatar EJ says:

    Well, since GA does not license “home inspectors” I think I’ll get some new business cards to say “inspector”. I bet I can do an inspection in 30 minutes and that includes measuring the house. Since I’m 67 now, who cares, by the time they catch up with me I’ll be gone anyway.


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FNMA Rural High-needs Appraisal Waiver

by Dave Towne time to read: 1 min