The share of homebuyer mortgages with appraisal waivers sold to the government-sponsored enteprises rose to a high for the year as 2024 came to a close, and further acceleration is likely.
The percentage of purchase loans with waivers rose to 14.5% from 12.1% in December, according to the most recent Recursion Co. analysis of Fannie Mae and Freddie Mac data. The variation in share other months was generally a percentage point or less.
A planned extension of appraisal waiver eligibility for purchase mortgages with elevated loan-to-value ratios will likely result in an even higher share when it takes effect in the first quarter of this year.
The maximum loan-to-value ratio is rising to 90% for full waivers and to 97% for inspection-based hybrids this year from what previously was an 80% ceiling.
The GSEs also are adding information from Federal Housing Administration-insured loans favored by first-time buyers to the online database they use to determine whether mortgages qualify for waivers.
Broader eligibility could give a further boost to lending giant United Wholesale Mortgage in particular as it has consistently been the largest users of appraisal waivers.
United Wholesale has delivered $1.28 billion in unpaid principal balance or 3,246 individual mortgages with waivers to the enterprises, representing around 45% of the PIW-eligible universe, according to Recursion Co.’s analysis.
The next largest user of waivers is Pennymac, which also competes in the wholesale channel, followed by Newrez, a mortgage banking unit that publicly-traded Rithm could spin off this year.
