While Fannie Mae has “retired” the time period appraisal waiver from its vendor information, the change within the newest update, which may have probably the most impression on customers entails the reconsideration of value coverage.
The Fannie Mae announcement is SEL-2025-07. Freddie Mac put out the same ROV update on Wednesday in its bulletin 2025-12.
Some of the updates appear to extra carefully align Fannie Mae insurance policies with these at Freddie Mac, as hypothesis relating to a merger and preliminary public providing to launch them from conservatorship continues.
What are the modifications to the reconsideration of value pointers
Reconsideration of value was a sizzling button matter within the mortgage business, particularly in mild of the findings of the Biden Administration Property Value and Appraisal Equity initiative which the Trump Administration repealed.
In March, the Federal Housing Administration cancelled the Biden Administration’s reconsideration of value course of for its program.
Both the Fannie and Freddie bulletins take away a lender requirement to supply an preliminary ROV disclosure on the time the borrower submits a mortgage utility.
Now the disclosure have to be offered together with supply of the appraisal report.
The GSEs additionally simplified documentation necessities to require solely gadgets associated to the result, not the beginning of the ROV, be retained within the mortgage file.
This change is efficient instantly. Fannie Mae Selling Guide Supplement UAD 3.6 has additionally been up to date to cowl this variation.
Why Fannie Mae is dropping the “appraisal waiver” time period
As for the appraisal waiver terminology change, the Fannie Mae bulletin stated it was “to extra precisely replicate the evolving position of our valuation options.” As a consequence, the wording is now not for use in reference to “value acceptance” within the Selling Guide.
“Furthermore, the continued use of twin phrases creates confusion, undermines product promotion, and delays business alignment round a unified time period,” the announcement stated. Where appraisal waiver stood alone within the information, it has been modified to value acceptance, and the place it appeared in parenthesis after that nomenclature, it was eliminated.
The transfer promotes a extra constant message throughout the mortgage business, and reinforces Fannie Mae’s dedication to modernizing the valuation course of.
Right now, the GSEs are about to enter a restricted manufacturing part of UAD 3.6, with the top objective of retiring the Fannie Mae Form 1004 and associated paperwork.
Updating MH Advantage rules
Another change expands eligibility to incorporate single-wide MH Advantage properties. The new standards additionally embody the same program provided by Freddie Mac.
“It additionally consists of the popularity of Freddie Mac CHOICEHome as an MH Advantage manufacturing and design equal as evidenced by the CHOICEHome label.” This is a substitute for the MH Advantage requirement that eligible properties have to have a program sticker. “The lender stays accountable for guaranteeing all MH Advantage website enchancment necessities within the Selling Guide are met,” the bulletin added.
Changes to life property property eligibility
Finally, Fannie Mae up to date necessities to make clear that charge easy possession of a property in a life property is eligible underneath the rules.
To qualify:
The life tenant have to be a borrower;One or extra of the remaindermen, the one that inherits or is entitled to inherit the property after the life property ends (in line with Investopedia), could also be debtors; andBoth the life tenant and the remaindermen should signal the safety instrument as a way to convey their respective pursuits.
Fannie Mae additionally clarified traits of comparable preparations like “woman fowl deeds” [where the property owner designates who will inherit the property after death, bypassing probate] and “switch on dying deeds” which don’t qualify as life estates.
Freddie Mac modifications
In its update, Freddie Mac elevated most loan-to-value ratio, complete LTV and residential fairness line of credit score complete LTV to 95% for buy or no-cash-out refinance loans secured by a two-to-four-unit major residence.
But manually underwritten and tremendous conforming mortgages should not included on this revision, Freddie Mac stated.
Freddie Mac’s automated underwriting system, Loan Product Advisor, is just not being up to date till Oct. 5. Until then, a vendor might disregard any “ineligible” LPA suggestions message which is in battle with the update.
“Feedback messages are for steering functions solely and should not half of, and should not a substitute or substitute for, the necessities within the Guide and different Purchase Documents,” Freddie Mac stated.
Freddie’s new TPO definitions
Another portion of the Freddie Mac update added new language round third-party oversight in its information. This consists of defining an aggregator and a third-party originator.
“These updates present extra direct steering relating to Sellers’ duty round oversight of Third-Party Originators and due diligence,” the bulletin stated. “These updates can even make clear expectations for threat administration, which can require procedural updates by Sellers.”
