Inspection based appraisal waivers in March – up 57% on Rocket and UWM growth

For March 2025, GSE issuance totaled $45.5N, up 9.4% on February, and down 2.8% on March 2024. For property valuations, $38.4BN (84.5%) closed using appraisals, up 4.38%, and $6.13BN (13.5%) closed utilizing appraisal waivers, up 21.1% on the prior month. Lenders delivered $931M (2.05%) with inspection based appraisal waivers in March, up 57.1% on February. This is the first month where inspection based appraisal waivers have surpassed 2% of loans delivered since the program started.

Overall, inspection based waivers in March were 13.2% of the combined appraisal waiver (non-appraisal) solutions by loan balance, the same as last month. By number of loans delivered, inspection-based waivers were 18.7% of all waiver solutions.

Combined use of inspection based waivers and appraisal waivers in March was 15.5% by balance and 17.5% by loan count.

Agency share of appraisal waivers in March

Fannie Mae Valuation Acceptance + Property Data market share of inspection based waivers in March was unchanged at 74.7% on volume of $697MM, up 89.5% on February. There are 404 lenders who have delivered loans through Fannie Mae Valuation Acceptance + Property Data, including 218 independent mortgage companies and 115 banks and 72 credit unions. A total of 74 lenders issued loans using inspection based appraisal waivers in February with Valuation Acceptance + Property Data, up 19.4% on February.

Freddie Mac ACE+ PDR (Automated Collateral Evaluation plus Property Data Report) market share for inspection based waivers in March was 25.3% on volume of $235MM, up 4.8%. Freddie Mac participation is at 459 lenders, including 178 banks, 38 credit unions, and 241 non-banks. A total of 105 individual lenders issued loans using inspection based waivers with ACE+ PDR, down 4.5% on the prior month.

Bank, credit union & nonbank using appraisal alternatives

For bank sellers, 69.0% have used appraisal waivers and 25.5% have used inspection based waivers to deliver loans to the GSEs in the past 2 years. In March 38.2% used appraisal waivers and 7.0% used inspection based waivers.

For credit union sellers, 72.6% have used appraisal waivers and 23.7% have used inspection based waivers to deliver loans to the GSEs, again in 2023 and 2024. In March 40.8% used appraisal waivers and 6.4% used inspection based waivers.

For nonbank sellers, 79.5% have used appraisal waivers and 45.9% have used inspection based waivers to deliver loans to the GSEs. In March 66.8% used appraisal waivers and 19.5% used inspection based appraisal waivers.

Production channel

Broker channel issuance was $8.4N in February with 112 lenders delivering loans, up 53.5% on last month. Correspondent channel issuance was $15.7N from 177 lenders, up 0.9%. Retail issuance was $21.3BN from 1,167 lenders, up 4.0% on January.

For inspection based appraisal waivers in March, broker volume was $352M and 37.8% of loans delivered, up 108.4% from 19 sellers. The correspondent channel was $106M and 11.4%, up 5.6% of the overall volume from the prior month, from 21 aggregators. Retail channel utilization of inspection-based waivers was up 46.8% to $472M at 50.8% of issuance from 121 lenders.

Two largest nonbank lenders continue to dominate

Rocket Mortgage and UWM grew 101.5% and 69.6% respectively, consolidating their dominant use of these solutions, and suggesting high levels of automated acceptance of AUS offers during origination.

NewRez and PennyMac also grew, but on far lower volumes. Inspection based waiver offers are significantly higher for refinance (vs. purchase) transactions, and so position non bank lenders to capitalize on any near term interest rate changes.

Hybrid appraisals, now live in the GSE selling guides, use the same on-site property inspection report as inspection based appraisal waivers, so expect to see the same lenders be early users of these new valuation solutions.

More about inspection based appraisal waivers in March