Big Changes to Appraisal Waiver Eligibility

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Appraisal Waiver Eligibility

The Federal Housing Finance Agency has announced several key updates to Fannie Mae and Freddie Mac policies aimed at improving efficiency and reducing costs in the mortgage market. These changes will benefit both lenders and borrowers.

Among the updates, the FHFA is expanding eligibility for the appraisal waiver on purchase loans, allowing more first-time and low-income buyers to save on closing costs and reduce wait times. The maximum loan-to-value ratio for the appraisal waiver will rise to 90%, while inspection-based appraisal waiver options will increase to 97%. These changes make the appraisal waiver a significant benefit for those seeking more affordable housing options and quicker loan processing times.

The FHFA’s focus on the appraisal waiver also extends to collaboration with the Department of Housing and Urban Development. Together, they plan to integrate FHA loan data in the Uniform Appraisal Dataset, enhancing transparency and aligning with the appraisal waiver framework. The new appraisal waiver guidelines aim to simplify the process, making it easier for both lenders and borrowers to meet appraisal requirements with greater flexibility.

In addition, Freddie Mac is expanding its pilot program for fee-based loan repurchase alternatives, providing lenders more flexibility alongside appraisal waiver benefits. The appraisal waiver approach is part of a broader initiative to make the mortgage market more accessible, particularly for low-income and first-time buyers.

Finally, in a move aimed at giving greater predictability for lenders, the Enterprises will now give 60 days’ notice before raising base guarantee fees on certain loans, which may interact positively with appraisal waiver policies, ensuring a smoother transition for affected parties.

These updates, especially the appraisal waiver expansion, are designed to increase liquidity in the mortgage market and improve access to affordable credit, especially for those facing housing affordability challenges.

For more details, visit FHFA.gov.

Source: Link

Read more about appraisals here “Understanding Residential Real Estate Appraisals”

Zillow Shares Surge on Strong Q3 Results

Zillow shares are surging in premarket trading today after the real estate company reported impressive third-quarter results. The company posted revenue of $581 million, up 17% from the same period last year, surpassing expectations. Meanwhile, Zillow’s net loss narrowed to $20 million, compared to a $28 million loss in Q3 of 2023.

Zillow’s performance outpaced the broader real estate industry, which saw just a 2% growth in transaction value, according to the National Association of Realtors. The company also raised its revenue outlook for the fourth quarter, projecting between $525 million and $540 million, aligning closely with analyst expectations.

Shares of Zillow have jumped 40% since the appointment of new CEO Jeremy Wacksman in August, signaling investor confidence. The company has also benefited from lower U.S. mortgage rates, which analysts say has helped boost the housing market.

JPMorgan has raised its price target on Zillow, citing a solid outlook despite a challenging market. For more updates, visit Zillow’s investor relations page.

Source: Link

Redfin: Rule Changes Barely Impact Commissions

And finally, a new study from Redfin shows that recent rule changes on real estate broker commissions have had little impact on the buying and selling process. The National Association of Realtors’ rule changes, implemented in August, slightly reduced agent compensation. In October, the average buyer’s agent commission was 2.34%, just a fraction lower than two years ago.

Despite concerns over a shift in commission structures, Redfin reports that sellers are still paying the buyer’s agent fees, though in smaller amounts. Redfin’s report also highlights the rise of negotiations over who covers these costs, but agents are seeing minimal changes overall.

The findings come as opposition grows to a nearly $1 billion settlement involving the NAR and other real estate groups, with some consumers and legal experts raising concerns about potential workarounds in the new system. A Missouri federal judge is set to approve the settlement next month.

As affordability challenges persist with rising mortgage rates and high home prices, experts say it’s too early to tell how these rule changes will ultimately affect the housing market.

Source: Link

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