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This article providers a snapshot of the current readiness of lenders to utilize hybrid appraisals for GSE and non-agency lending.
Hybrid appraisals in the selling guide today
Hybrid appraisals are live in the Fannie Mae Selling Guide B4-1.2-03, Hybrid Appraisals (02/05/2025) today, will be live for Freddie Mac Selling Bulletin 2025-1 on April 7, 2025.
Eligibility for hybrid appraisals is essentially the same as traditional appraisals (94.7%), and includes support for the following:
- Transaction types – purchases, limited cash-out refinances & cash-out refinances
- Occupancy types – primary resident, second home & investment properties,
- Property types – 1-unit single family homes, condominiums, planned unit development (PUDs) & homes with accessory dwelling units (ADUs)
Over 30% of GSE sellers and 55% of correspondents
The majority of lenders are already able to order hybrid appraisals. The 1004H and 70H products are activated in LOS and appraisal management systems, property data inspection networks are ready, and surveys indicate ~60% of appraisers will complete hybrid & desktop assignments:
- A total of 585 GSE (direct) sellers are ready, representing 31% of sellers and ~75% of GSE loan volume
- A total of 2,070 GSE correspondents are ready, representing 55% of correspondent sellers and 81% of correspondent loan volume

GSE Appraisal Modernization Lenders – 2017 to Q1 2025
This report identifies lenders utilizing GSE appraisal modernization solutions from 2017 through Q1 2025. This allows users to assess which lenders have already utilized inspection-based appraisal waivers, and are able to take advantage of hybrid appraisal immediately, and lists 585 GSE direct sellers and 2070 GSE correspondents.
Hybrid appraisals address current issues in performance
Lenders are using and implementing hybrid appraisals to tackle slower turn times and higher fees that exist today in certain markets. This includes working with selected AMCs, panel appraisers and inspection vendors to identify markets where capacity is a challenge, and introducing hybrids to alleviate the issues.
A recent customer analysis of over 60,000 loans across all states and 1,993 counties, illustrated the performance and opportunities:
- Median turn time across all states & counties is 6.8 calendar days (with holds)
- Total of 13.5% of loans had slower turn times than median
- Total of 224 counties had slower turn times than median:
- 119 counties greater 6.83 calendar days
- 88 counties greater than 10 calendar days
- 28 counties greater than 20 calendar days
Non-agency lenders using hybrid appraisals
New property valuations introduced in the GSE selling guides generally become the de facto standard for non-agency lending:
- Hybrid appraisals have been approved by the FHFA, GSEs, rating agencies, private mortgage insurance companies, jumbo conduits and other private investors
- Non-agency lenders are already implementing hybrids to support their fix-and-flip, bridge and new construction and single family rental portfolio lending products:
- The GSE Uniform Property Data (UPD) comprehensive inspection scope is well suited to non-agency lending and alternative financing use cases
- Inspections can be quickly tailored for private issuers, and can include custom inspection scopes, with high definition photography, 3D virtual tours, floor plans and other data gathering
Additionally, appraiser firms are using hybrids to offer cost effective solutions for non-lending use cases like pre-listing, PMI removal, tax appeal & estate planning.
Representation & Warranties Relief (for appraisal value)
Like traditional appraisals, hybrid appraisals are submitted to the GSE Uniform Collateral Data Portal (UCDP) and scored. Eligible loans with a hybrid receiving a lower score (generally 2.5 or less) are eligible for representations and warranties enforcement relief related to the appraisal value of the subject property.
Ineligible loans
For loan and property types a traditional appraisal is still required, including multi-unit properties (2-4 units), cooperative units, manufactured homes, construction or construction-to-permanent financing and GSE renovation loans & green energy loans.
GSE Selling Guide & Bulletins
The GSE bulletins and selling guide references are below: