Freddie Mac to nix full appraisals for some condo loans
MCLEAN, Va. – June 29, 2018 – Freddie Mac announced that consumers buying a condo or refinancing an existing condo mortgage may now be eligible for its automated appraisal waiver.
Originally launched in 2017 for single-family home loans, Freddie’s automated collateral evaluation (ACE) appraisal waiver allows eligible condo borrowers to save money if the lender decides that a traditional appraisal isn’t needed. Freddie says that could save buyers approximately $500 in fees and allow them to close 7-10 days faster.
“We continue to see the share of condo loans we purchase increase, especially among first-time homebuyers,” says David Lowman, executive vice president of Freddie Mac’s Single-Family business. “ACE for condos will help increase the efficiency of the mortgage origination process, offer greater certainty, and help save our clients, and their customers, time and money.”
ACE assesses the need for a traditional appraisal by “leveraging proprietary models and using data from multiple listing services (MLSs) and public records as well as a wealth of historical home values to determine collateral risks,” according to Freddie Mac.
To find out if a condominium property is eligible for an ACE waiver, lenders must submit loan data through Loan Product Advisor, Freddie Mac’s automated underwriting system. If ACE determines that the estimated value or purchase price of the condo is acceptable, the lender may receive immediate representation and warranty relief related to the value, condition and marketability of the property upon delivery of the loan to Freddie Mac.
However, lenders and borrowers always have the choice to either proceed with an ACE appraisal waiver or obtain a traditional appraisal.
ACE for condominium purchases and refinances will be available after July 16, 2018.
More information about Loan Advisor Suite is available online.
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