Inspection Based Appraisal Waivers in May – Highest Month on Record

For May 2025, GSE issuance totaled $56.7BN, up 19.4% on April, and up 1.8% on May 2024. For property valuations, $46.3BN (81.6%) closed using appraisals, up 18.6%, and $9.08BN (16.0%) closed utilizing appraisal waivers, up 22.4% on the prior month.

Lenders delivered $1.34BN (2.36%) with inspection based appraisal waivers in May, up 29.7% on April. This is the highest month on record, the 3rd month to have surpassed 2% of loan balance issued, and the 4th month where issuance have exceeded $1BN since the GSE programs started. By loan count inspection based appraisal waivers were 2.95% of issuance.

Overall, inspection based waivers in May were 12.9% of the combined non-appraisal solutions by loan balance. By number of loans delivered, inspection-based waivers were 14.8% of all waiver solutions.

Combined use of inspection based waivers and appraisal waivers in May was 18.4% by balance and 19.9% by loan count.

Agency share of appraisal waivers in May

Fannie Mae Valuation Acceptance + Property Data market share of inspection based waivers in May was up marginally to 74.1% on volume of $992MM, up 30.9% on April. There are 409 lenders who have delivered loans through Fannie Mae Valuation Acceptance + Property Data, including 221 independent mortgage companies and 115 banks and 74 credit unions. A total of 82 lenders issued loans using inspection based appraisal waivers in May with Valuation Acceptance + Property Data, down 1.2% on April.

Freddie Mac ACE+ PDR (Automated Collateral Evaluation plus Property Data Report) market share for inspection based waivers in May was 25.9% on volume of $347MM, up 26.4%. Freddie Mac participation is at 472 lenders, including 184 banks, 42 credit unions, and 246 non-banks. A total of 117 individual lenders issued loans using inspection based waivers with ACE+ PDR, up 7.3% on the prior month.

Bank, credit union & nonbank using appraisal alternatives

For bank sellers, 69.5% have used appraisal waivers and 25.7% have used inspection based waivers to deliver loans to the GSEs in the past couple of years. In May 43.4% used appraisal waivers and 7.9% used inspection based waivers.

For credit union sellers, 73.5% have used appraisal waivers and 24.7% have used inspection based waivers to deliver loans to the GSEs, again since 2023. In May 46.9% used appraisal waivers and 7.6% used inspection based waivers.

For nonbank sellers, 79.5% have used appraisal waivers and 46.1% have used inspection based waivers to deliver loans to the GSEs. In May 72.8% used appraisal waivers and 21.1% used inspection based appraisal waivers.

Production channel

Broker channel issuance was $10.6BN in May with 121 lenders delivering loans, up 18.5% on last month. Correspondent channel issuance was $19.9BN from 172 lenders, up 16.7%. Retail issuance was $26.1BN from 1,187 lenders, up 21.9% on April.

For inspection based appraisal waivers in May, broker volume was $533MM and 39.8% of loans delivered, up 26.5% from 22 sellers. The correspondent channel was $163MM and 12.2%, up 3.5% of the overall volume from the prior month, from 26 aggregators. Retail channel utilization of inspection-based waivers was up 41.7% to $643MM at 48.0% of issuance from 131 lenders.

Top lender utilization of waivers

For 2025 year-to-date, the market-level utilization by loan count of appraisal waivers is 15.6% and for inspection based waivers 2.46%. Volume is heavily skewed to top banks and nonbank lenders who have optimized production for waivers. The table below shows that ~120 lenders have significantly higher utilization than peers, when compared to their overall loan production volume.

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

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