The Quick Read: A condo can qualify for an appraisal waiver on a conventional loan, but you cannot request one. The lender’s automated underwriting system decides whether to offer it, based on the loan, the property data on file, and your finances. Even when the appraisal is waived, the condo building still gets its own separate review.
Key Takeaways
- Only the automated system can offer a waiver. Neither you nor your loan officer can ask for one.
- Skipping the appraisal does not skip the condo project review. The building can still sink the loan.
- A waiver means no low-appraisal surprise. It also means no independent check on the price.
- Everything here is subject to lender guidelines and full file review. Nothing is a commitment to lend.
What Is an Appraisal Waiver, Really?
An appraisal waiver means the lender skips the appraisal and the agency accepts the value anyway. On a purchase, your contract price becomes the value. No appraiser walks the unit. No appraisal fee lands on you.
Refinance savings and break-even estimate
The starting figures are an example value with a balance in proportion and a placeholder for costs. Replace them with yours, and enter the current rate from your statement.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $245,000 current balance, a current rate you enter and a remaining term seeded at twenty-five years, closing costs seeded at $5,000 as an editable placeholder (not a fee quote) and rolled into the new loan, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The new rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a refinance quote; a refinance is priced by the lender at lock, and the current rate, the remaining term and the closing costs are figures you enter. The current payment is estimated from the balance, the current rate and the remaining term; the break-even divides the closing costs by the monthly saving and ignores the interest effect of a longer term. On the VA IRRRL the funding fee is added to the loan unless the veteran is exempt. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages; Lendmire is a broker, never the lender.
Under Fannie Mae's Selling Guide, Desktop Underwriter (DU) offers value acceptance on certain loans, and then no appraisal is required. One-unit properties, including condos, are eligible. Principal residences and second homes both qualify. The DU recommendation must be Approve/Eligible.
Fannie Mae stopped using the phrase "appraisal waiver" in its own guide in September 2025.
Here is what a waiver is not. It is not an inspection. It is not the agency vouching for your unit. Fannie Mae accepts the value the lender submits and gives the lender relief from certain representations and warranties, per its value acceptance page. That is a risk transfer between the agency and the lender. Your unit's condition is nobody's finding.
How the Decision Works, Step by Step
Across the wholesale programs I place files with, the sequence is the same. It runs in six steps.
1. The system decides whether to offer a waiver. For Fannie Mae, a prior appraisal on the property generally must be found in its Collateral Underwriter data.
2. The system returns a finding. You need the approval-level finding. A waiver offer rides on top of it.
3. The offer has to survive to the final submission. Fannie Mae allows the lender to use value acceptance only if the final submission to DU produced the offer, no appraisal was obtained, and the offer is no more than four months old on the note date.
4. The condo project is checked separately. More on that below. This is where condo files differ most.
5. If the offer disappears, an appraisal gets ordered. A change in loan amount, down payment, or loan type can erase it. Fannie Mae added a condo-specific Form 1073 Hybrid for cases where a property data offer is lost because the loan's qualifying characteristics changed, per its February 2024 Selling Guide announcement.
6. You get the paperwork you are owed. If an appraisal exists, you get a copy. If none exists, there is nothing to deliver on that point.
What decides the outcome: the automated finding, your leverage, the occupancy type, the data on file for the property, and the condo project's status. Your preferences are not on that list.
The "+ Property Data" Path
Some offers come with a data-collection step. Fannie Mae calls it value acceptance plus property data. A trained data collector visits the home and records property details. That record replaces the traditional appraisal.
This path is what reaches the highest leverage. Per Fannie Mae, plain value acceptance covers principal residences and second homes up to 90% LTV/CLTV (loan-to-value, the loan as a share of the property's value). Value acceptance with property data reaches up to 97%, within program limits. Exact terms depend on the lender's guidelines, property type, leverage, and a full review of the borrower's file.
Condos got access to the property data path in February 2024, both attached and detached. Older articles saying condos are excluded are out of date. An early wholesale bulletin from 2023 said exactly that, and it has since been overtaken.
Why Condos Are Different
A condo has two things to approve: the unit and the building. A waiver only touches the first one.
An appraisal answers one question: what is this unit worth? The condo project review answers a different one: is this building financially healthy enough for agency financing? Waive the first and the second still stands.
Fannie Mae's tool for this is Condo Project Manager (CPM). It is a free, web-based tool that tells lenders whether a project has a Fannie Mae status or delivery restriction. Fannie Mae's announcement reminds lenders they must still confirm the project is not ineligible. DU also passes along CPM messages that can limit a project to principal residences only, or cap LTV at 90%, per Fannie Mae's DU release note. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Why do people get confused? Condo data is thin. Associations are often volunteer-run, records are less structured, and a model sees a building through whatever sales history and public records exist. A unit in a busy building with recent sales gives the system plenty to work with. A first sale in a new or newly converted building gives it very little. The stronger the data, the likelier the offer. Plenty of condo files simply never get one.
The Condo Project Review Got Tougher
Condo project rules changed in 2026, and they matter more than the waiver.
The 2026 change expanded the Waiver of Project Review to new and established projects with ten or fewer units. Five- to ten-unit projects must not be part of a master association or larger development.
Confirm the details of any project-review change against the lender's own guidance, since a news summary is not the rule.
The practical effect: a waived appraisal on a unit in a bigger building may now come with the fuller project review. That review looks at the association's budget, reserves, delinquencies, insurance, and litigation. The trigger is the application date, not the closing date. A buyer who applied before the cutoff may still be on the old path, and the lender can tell you which one applies.
This is the real decision point on many condo files. The appraisal saves you a fee. The building review can make or break the loan.
When a Full Appraisal Is Still Required
An appraisal gets ordered when any of these is true:
- The automated system never offered a waiver, or the offer was lost before final submission.
- The offer is more than four months old on the note date.
- The property falls outside Fannie Mae's eligible list. Ineligible items include two- to four-unit properties, co-ops, manufactured homes, proposed construction, construction-to-permanent loans, renovation loans, leasehold properties, and Texas Section 50(a)(6) loans.
- The lender applies its own stricter rules. Lenders can add overlays on top of agency rules.
Some matrices also exclude gifts of equity and resale-restricted properties. Check that with your lender instead of assuming it.
The occupancy lane matters here too. Under my program parameters, a principal residence can go to 95% LTV on a standard purchase, or 97% when at least one borrower is a first-time buyer on a one-unit home with a fixed rate. Second homes top out at 90%. Occupancy decides the leverage, and leverage feeds the waiver decision. Final terms depend on lender guidelines, property type, leverage, and the borrower's complete credit picture.
Condo Scenarios in Plain Terms
Likely to get an offer. Picture a buyer purchasing a one-bedroom unit in an established building with steady sales history. The buyer plans to live there. The down payment is modest, the credit file is clean, and the automated approval comes back strong. The unit has a prior appraisal on file in the agency's data. The offer is plausible. The building still needs to clear project review, and larger buildings now face the fuller one.
Unlikely to get an offer. Now picture a buyer in a recently converted building where few units have ever sold. No prior appraisal exists for the unit. The system has nothing to compare against. Add a last-minute change to the loan amount and the offer, if there was one, is gone. An appraisal gets ordered, likely the condo-specific form.
Neither scenario involves anything you can negotiate. What you can control is the strength of the file and the early questions you ask.
Waiver Versus Appraisal Contingency
These are two different things, and people blur them.
An appraisal waiver is a lender decision about whether an appraisal is needed. An appraisal contingency is a contract clause that lets you renegotiate or walk away if the appraised value comes in low. If no appraisal happens, the contingency has nothing to act on.
Here is the tradeoff. No appraisal means no low-value surprise and no appraisal gap to cover out of pocket. It also means nobody independent checks whether your price makes sense. That removes the gap problem and also removes the safety net.
Honestly, it is a toss-up for a lot of buyers. The savings are real. The risk is quieter. A waiver cannot see a special assessment coming, a thin reserve fund, or deferred building repairs. Reviewing the building's financials yourself is the check the waiver does not give you.
Risks Worth Taking Seriously
- Overpaying. Nobody tests the price. Compare recent sales in the building yourself, or ask your agent to.
- Hidden building problems. Special assessments and higher dues hit your monthly housing cost. Fannie Mae's own rationale for the 2026 changes is that unit owners can face hardship from unexpected assessments or dues increases.
- A lost offer. An offer can vanish mid-file, and an appraisal then gets ordered. Ask your lender up front what happens in that case, and whether your contract leaves room for it.
- False comfort. A waiver does not mean the building is approved. The two reviews are separate.
One line on the cost side of the budget: HOA dues count toward your monthly housing expense when the lender calculates your ratios. The automated finding governs most files, and the wholesale programs I use set a total ratio ceiling of 50%.
Do You Still Get to See Valuations?
Yes. Under the CFPB's valuations rule, the lender must tell you promptly after application that you can receive copies of appraisals. You can waive the timing, meaning the waiting period before closing. You cannot waive the lender's duty to hand over copies. The CFPB's consumer guide says so plainly. With no appraisal, there may be no valuation to deliver, and that is the only reason the paperwork gets lighter.
What You Can Do in Practice
You cannot request a waiver. You can still shape the file.
1. Ask your loan officer whether the file shows a waiver offer once automated underwriting has run.
2. Ask what happens if the offer is withdrawn. Learn the backup path before you need it.
3. Ask which condo project review applies and whether your application date puts you under the newer standards.
4. Request the building's budget, reserve information, and meeting minutes. Read them. Look for special assessments.
5. Decide whether to run your own price check. Even a free comps review from your agent beats nothing.
6. Avoid changing the loan after the offer. A new down payment amount or loan type can change the automated outcome.
If you are also comparing government-backed options, Lendmire's piece on conventional versus FHA approval and appraisal rules for a condo covers the other side of the same building-level scrutiny. Many condo buyers working through conventional loan programs hit the project review long before they think about the appraisal.
Key Terms Defined
Value acceptance: Fannie Mae's term for accepting the lender's submitted value without an appraisal.
CPM (Condo Project Manager): Fannie Mae's tool for checking whether a condo project is eligible.
LTV: Loan-to-value, the loan amount as a share of the property's value.
Mortgage insurance: Coverage required above 80% LTV. You may request cancellation at 80% of the original value, and the servicer must end it automatically at 78%. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Frequently Asked Questions
Can I ask my lender for an appraisal waiver on a condo?
No. The automated underwriting system decides, and neither you nor your loan officer can request one. What you can do is keep the file strong and avoid changes that could cost you the offer once it appears.
Does a waiver mean the condo building is approved?
No. Project review is a separate process from the unit's valuation. A building can fail even when the unit's appraisal is waived.
Does a new condo qualify for a waiver?
It is harder. The system relies on data such as prior appraisals and sales history, and a brand-new or newly converted building has little. Eligibility on paper does not mean an offer in practice. Lenders can also set stricter rules than the agencies.
Can a waiver offer be withdrawn after I get it?
Yes. Changes to the loan, such as the amount or loan type, can remove it. At Fannie Mae the offer also must be no more than four months old on the note date. If it disappears, an appraisal gets ordered.
Do second homes work differently from a primary residence?
Yes. Second homes are eligible for value acceptance, but they carry a lower maximum leverage than a principal residence. Occupancy type is one of the inputs the automated system weighs, so say up front how you plan to use the condo.
If you are buying a condo and want to see how the building review and the appraisal question fit your own file, Lendmire can help you compare the purchase programs on the same condo.
To start, request a condo purchase scenario review with Lendmire.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges FHA, VA, conventional and jumbo home purchase and refinance financing in 16 states through wholesale lenders. Every option is subject to the lender's guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide B4-1.4-10 Value Acceptance
2. Fannie Mae Value Acceptance page
3. Fannie Mae SEL-2024-01, condos added to value acceptance plus property data
4. Fannie Mae (document 41851)
5. CFPB ECOA valuations compliance guide
6. CFPB consumer guide to the valuations rule
This article is part of Lendmire’s conventional loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Conventional Loan Rules for Buying a Home Before Selling Your Current One · Conventional Loan Reserve and Litigation Rules for a Condo Project · Conventional Loan PMI Cancellation Rules and Payment History
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.