No Appraisal on a Home Purchase?
It is a tell tale sign that the real estate market could be changing. Fannie Mae and Freddie Mac both announced they will be offering property inspection waivers on some home purchases. Why? Well in their FAQ’s online, Fannie Mae says, “they wanted to offer borrowers a choice for efficiency and cost savings by foregoing an appraisal on some lower loan to value (LTV) purchase transactions.
So is this a good thing? I’m not exactly sure. Scratching my head on this end trying to figure out why Fannie would do this. It was loosened mortgage restrictions like this that caused the housing market to crash in 2008. Will we see another onslaught like we did then? I’m not sure–what I do know is that it’s not the best idea, in my opinion.
So who is eligible. According to Fannie Mae’s online FAQ’s. A PIW or property inspection waive will be considered on one unit properties, including condos. Limited to cash out refinance transactions, principle residences and second homes up to 90% LTV, investment properties up to 75% LTV, purchase transactions with principal residences and second homes up to 80% LTV. The list is more extensive than that, but you get the idea. The full list can be found in the link above.
Another sign the real estate market is changing? The stated income loan is back. The requirements are minimumal. Sound familiar? Well it should, the “liar loans” are what helped cause the economic meltdown of 2008 driving the US into one of the worst financial storms since the great depression.
Do I think this will have an immediate impact on prices in the short term? No, I expect to see prices to rise over the next several years. Why? That’s easy. After the mortgage crisis–everyone had to submit full documentation to get a loan on a home. We are good, I think, for now. Let’s get back to answering that question though in the next few years.
If you have questions about buying a home, selling a home or investing in real estate, call me at 619-818-2992.
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