If you’ve gone through buying or refinancing a house, you’ve probably dealt with the classic setup: an appraiser rolls up with a clipboard, pokes around inside and out, measures, and then you wait around for their report. That’s how it always used to go down. However, these days, with technological upgrades, the appraisal process has undergone some changes.
There are four main ways it can happen now: the traditional full appraisal, appraisal waivers (or “value acceptance” as Fannie Mae calls it these days), hybrid appraisals, and desktop valuations.
1. The Traditional Full Appraisal
This is still the go-to for a lot of loans. A licensed appraiser comes out in person, checks the condition, number of bedrooms and baths, any upgrades or issues, and figures out the value. They usually lean on a few methods:
– Sales Comparison: The most common one. They look at recent sales of similar houses nearby (those “comps”) and adjust the numbers based on differences like square footage, updates, or wear and tear.
– Cost Approach: Good for brand-new builds. It’s basically “what would it cost to rebuild this from scratch, minus how much it’s aged?”
– Income Approach: If it’s a rental or investment spot, they base it on how much rent it could pull in.
It’s thorough, which keeps everyone protected, but yeah, it takes time and costs more.
2. AMCs
Back after the 2008 crash, Appraisal Management Companies (AMCs) became a thing to ensure the transparency and trustworthiness of the appraisal. Lenders hire the AMC, and the AMC picks the appraiser; this keeps lenders from leaning on appraisers to manipulate the numbers.
3. The Faster Routes: Waivers, Hybrids, and Desktops for Easier Loans
Appraisal Waiver (Value Acceptance)
This is the simplest; no appraiser shows up at all. Instead, it’s all automated through Fannie Mae’s Desktop Underwriter or Freddie Mac’s Loan Product Advisor, which pulls information from public records, past appraisals, and market data. As of early 2025, both Fannie Mae and Freddie Mac bumped up eligibility to make it available for more borrowers.
Exact qualifiers? For standard waivers on purchases or limited cash-out refinances:
– Up to 90% loan-to-value (LTV) for primary residences and second homes (that’s a down payment as low as 10%).
– For refinances, it can go up to 97% LTV in some cases, like if it’s a rate-and-term refi on a primary home.
– Investment properties? Only for refinances, and LTV caps at 75% or so, depending on details.
But it’s not automatic; even if you’re at 90% LTV, the property has to be a one-unit home (including condos or PUDs), under about $1.5 million in most areas, and the system has to give a low-risk score.
Quick table for clarity:
| Type | Max LTV / CLTV | Notes |
|---|---|---|
| Standard Waiver | Up to 90% LTV | Purchase, limited-cash-out, select refinances |
| Refinance Waiver (Select) | Up to 97% LTV | Limited cases |
Hybrid Appraisal
This one’s a mix—someone, not necessarily the appraiser, heads out to the property to snap photos. Then the actual licensed appraiser calculates the numbers remotely, using that data plus comps and market info. It’s not like the lender skips the value analysis; the appraiser still does a full valuation, just without being there in person.
Desktop Appraisal
Zero site visit here. The appraiser works off desk data only; public records, MLS listings, floor plans, and photos from past sales. They use Form 1004 Desktop. It’s the speediest and cheapest, but only for straightforward, low-risk stuff like primary home purchases at 90% LTV or less. Not for refis or anything where data might be spotty.
4. A Few Extras
– Form 1007: That’s for investment properties to figure out rental value.
– “Subject-To” Appraisals: For loans where value hinges on fixes or builds being done, like FHA, VA, or construction deals. The appraiser says, “This value assumes these repairs happen.”
