Your options

Can you ask for a full interior appraisal instead?

You can raise it. Whether it happens depends on the lender, the loan and what they know about the house.

Can a borrower insist on a full interior appraisal?

You can ask, but on a loan the lender picks the valuation option, not the borrower.

For loans run through Desktop Underwriter, the system tells the lender which options the file is eligible for. Fannie Mae says the lender may select any option presented, which may include a desktop appraisal, a hybrid appraisal or a traditional appraisal.

So a traditional appraisal is often on the list. The choice among them sits with the lender.

Why might a lender agree?

Because Fannie Mae's rules expect lenders to act on what they know about the property.

For appraisal waivers, Fannie Mae says the lender must order an appraisal if it believes one is warranted based on additional information it has about the property or later events. More broadly, the lender is responsible for making sure the property is adequate collateral for the loan.

That makes facts about the house relevant. Records and photos can miss a recent renovation, an unrecorded addition, damage, or an unusual layout.

Do some properties already need a full appraisal?

Yes, several property types fall outside the lighter options.

Fannie Mae does not allow desktop appraisals on condos, cooperative units, manufactured homes, two to four unit properties, second homes, investment properties or any refinance. Hybrids are also ruled out for two to four unit properties, cooperative units and manufactured homes. If your property is in one of these groups, a desktop or hybrid is not on the menu at Fannie Mae.

Who pays for the appraisal?

That is set by your lender and shown in your loan paperwork.

The CFPB notes that when you buy or refinance, the lender may need a new appraisal and may require you to pay for it. Ask the lender how a change of option would affect your costs and timing.

What if the lender says no?

You can still commission a private appraisal for your own information.

Under Fannie Mae's rules the lender is responsible for selecting the appraiser on its loans, so a report you order yourself will not stand in for the lender's valuation. It can still tell you what a full interior inspection finds. For a private order, Pocket Appraisal handles residential valuations across the country.

Questions

Common questions

Is a hybrid appraisal less reliable than a full one?

It is built differently, not to a lower standard. The appraiser still signs and stands behind the value, but relies on data a collector gathered rather than a personal visit.

Can I get a copy of whichever appraisal is used?

For a typical first mortgage, a CFPB explainer last reviewed September 4, 2020 says you are entitled to copies of the appraisals and valuations your lender obtains, no later than three days before closing.

Should I tell the lender about recent work on the house?

It is information the lender can weigh. Fannie Mae expects lenders to order an appraisal instead of a waiver when their information about the property warrants one.

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