Inspection based appraisal waivers in February – down 11.8% from a year ago

For February 2025, GSE issuance totaled $41.6BN, down 29.8% on January, but up 9.0% on February 2024. For property valuations, $35.4BN (85.1%) closed using appraisals, down 29.6%, and $5.6BN (13.5%) closed utilizing appraisal waivers, down 31.5% on the prior month. Lenders delivered $592M (1.42%) with inspection based waivers in February, down 30.8% on January.

Overall, inspection based waivers in February were 9.6% 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 11.6% of all waiver solutions.

Combined use of inspection based waivers and appraisal waivers in February was 14.9% by balance and 16.5% by loan count.

Agency share of appraisal waivers in February

Fannie Mae Valuation Acceptance + Property Data market share of inspection based appraisal waivers in February was unchanged at 62.0% on volume of $367MM, down 32.4% on December. There are 403 lenders who have delivered loans through Fannie Mae Valuation Acceptance + Property Data, including 217 independent mortgage companies and 115 banks and 72 credit unions. A total of 62 lenders issued loans using inspection based appraisal waivers in February with Valuation Acceptance + Property Data, down 7.5% on December.

Freddie Mac ACE+ PDR (Automated Collateral Evaluation plus Property Data Report) market share for inspection based appraisal waivers in February was 37.0% on volume of $225MM, decreasing 30.6%. Freddie Mac participation is at 454 lenders, including 179 community banks, 36 credit unions, and 239 non-banks. A total of 110 individual lenders issued loans using inspection based waivers with ACE+ PDR, down 28.1% on the prior month.

Bank, credit union & nonbank using appraisal alternatives

For bank sellers, 69.5% have used appraisal waivers and 25.4% have used inspection based waivers to deliver loans to the GSEs in the past 2 years. In February 42.1% used appraisal waivers and 7.7% used inspection based waivers.

For credit union sellers, 72.7% have used appraisal waivers and 23.6% have used inspection based waivers to deliver loans to the GSEs, again in 2023 and 2024. In February 40.5% used appraisal waivers and 3.8% used inspection based waivers.

For nonbank sellers, 79.5% have used appraisal waivers and 45.8% have used inspection based waivers to deliver loans to the GSEs. In February 68.3% used appraisal waivers and 21.3% used inspection based waivers.

Production channel

Broker channel issuance was $5.5N in February with 106 lenders delivering loans, down 47.9% on last month. Correspondent channel issuance was $15.6N from 162 lenders, down 21.1%. Retail issuance was $29.0BN from 1,116 lenders, down 29.8% on January.

For inspection based appraisal waivers in February, broker volume was $169M and 28.6% of loans delivered, down 36.7% from 18 sellers. The correspondent channel was $101M and 17.0%, down 15.2% of the overall volume from the prior month, from 24 aggregators. Retail channel utilization of inspection-based waivers was down 32.6% to $322M at 54.4% of issuance from 115 lenders.

More about inspection based waivers in February