Fannie Mae and Freddie Mac are making condominium loans eligible for automated appraisal waivers that could reduce mortgage borrowers' fees and shorten closing times for lenders.
Fannie Mae added the eligibility in
"We continue to see the share of condo loans we purchase increase, especially among first-time homebuyers," David Lowman, executive vice president of Freddie Mac's single-family business, said in a press release. "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."
Appraisals need to be substantiated by in-house and third-party data sources in order to be eligible for the waivers, in line with the two government-sponsored enterprises' broader move toward simplifying loan processing through automated verification of underwriting information. To validate appraisal information, the GSEs examine historical home valuation data they have, as well as multiple listing services and public records, using proprietary models.
In addition to using data validation to simplify loan processing, the agencies often rely on it to extend representation and warranty relief to lenders.
Condominium data can be tougher to verify than data on traditional loans because there is