Yes, you can waive an appraisal on a Texas home loan through an appraisal waiver, which some lenders offer if you meet certain criteria, such as a high credit score, a sizable down payment, and enough property data in the lender’s automated system.
Read on to understand what an appraisal waiver is and how to qualify for one. I’ll also explain its pros and cons to help you decide whether it’s worth the benefits.
What Is an Appraisal Waiver?
An appraisal waiver lets you bypass the traditional in-person property assessment by a licensed appraiser when purchasing a home.
To calculate your home’s current market value, the lender will use an automated underwriting system, which uses advanced algorithms and includes information such as the home’s past sales data and recent home sales within the area.
How to Qualify for an Appraisal Waiver in the U.S.
Not many borrowers and transactions qualify for an appraisal waiver. You have better chances of securing an appraisal waiver if the home has been recently sold, which means there’s likely a previous appraisal on record.
And even when a waiver is available through an automated valuation tool, your lender still has the final say on whether an in-person appraisal is necessary or not.
Here’s how to qualify for an appraisal waiver:
- Choose a lender that uses Fannie Mae’s Desktop Underwriter or Freddie Mac’s Loan Product Advisor. Waiver programs are often only for conventional loans backed by Fannie Mae or Freddie Mac, so they don’t apply to FHA, VA, and USDA loans. If you have a Fannie Mae-backed loan, the property must have a previous appraisal report in Fannie Mae’s database. This doesn’t necessarily apply to Freddie Mac-backed loans.
- Keep a low-risk borrower profile. Maintain a strong credit score and a low loan-to-value (LTV) ratio to improve your eligibility. Previously, lenders usually looked for a 20% down payment to keep the borrower’s LTV below 80%. Under the current 2025 Fannie Mae guidelines, some waiver programs allow up to 90% LTV.
- Know the property limits. Your lender may grant the waiver if you’re buying a single-unit primary, secondary, or condo property under $1 million in purchase price or estimated value.
- Be aware of the loan limits. The loan must meet current conforming loan limits and be for a purchase or rate-and-term refinance (limited cash-out refinance transactions).
- Be prepared to provide full income and asset documentation. Appraisal waivers aren’t available for limited-documentation and alternative-income loans. Submit all required documents promptly to qualify for a waiver.
- Buy a home in a high-needs rural region. You may qualify for an appraisal waiver if you’re buying in a county defined by the Federal Housing Finance Agency (FHFA) as a high-needs rural area. Under Fannie Mae’s rural high-needs program, lenders may allow higher LTV ratios up to 97% (as low as 3% down payment), although they will still review income, property, and other criteria before approving any waiver.
Be sure to ask your lender about specific appraisal waiver requirements, as these may vary from one lender to another.
When Lenders May Waive an Appraisal
Lenders avoid lending more than a home’s actual value to reduce the risk of major losses if the borrower defaults on the mortgage. This is why they typically prefer an in-person assessment, which is more accurate than an automated valuation tool.
That said, they may grant an appraisal waiver if:
The property has a recent appraisal on record.
This means a professional in-person appraiser has recently established the home’s market value. For example, the property may have been sold and appraised within the past year or so.
In this case, the lender may waive a new appraisal if the loan type, such as a 30-year fixed conventional loan or a cash-out refinance, allows qualification with the recent appraisal.
The lender wants a more efficient underwriting process.
Underwriting often takes several days or even weeks. If the lender considers an in-person appraisal unnecessary, skipping it shortens closing time.
However, the lender will make sure there’s enough sales data, particularly recent sales of nearby properties.
Key Takeaway: Lenders may waive an appraisal if there’s a recent appraisal or dependable property data to confirm the home’s market value.
Pros and Cons of an Appraisal Waiver
Even if you can waive an appraisal on your Texas home loan, is it really wise to do so? Weigh its benefits and drawbacks:
Advantages of an Appraisal Waiver
- Saves Money: In Texas, home appraisal costs anywhere from $425 to $650 on average, depending on the property’s location (rural vs. urban), type (single-family vs. multifamily), and size. Appraisal fees may go as high as $675 to $800, particularly in high-demand counties. You may be able to save several hundreds of dollars if you don’t have to pay for a professional home appraisal.
- Saves Time and Speeds Up Closing: With an appraisal waiver, you don’t have to schedule for an in-person visit and wait for the results, making the closing process faster.
Disadvantages of an Appraisal Waiver
- Risk of Overpaying: Automated underwriting systems require substantial recent data for accurate results. If the market is constantly changing or there isn’t much recent data in the property’s location, the results might be less reliable. You could end up overpaying (and over-insuring) for your house.
- Risk of Overlooking Property Issues: A professional in-person appraiser will check every nook and cranny to uncover any issues. For example, a home appraiser may determine that damaged appliances or signs of water damage affect the overall value of the home. An automated valuation won’t be able to discover these critical problems, which would be expensive to fix.
- Potentially Lower Resale Value: If you overpay now, you’ll find it hard to sell later at a profit, since buyers will rely on a new appraisal and won’t accept a sales price that’s much higher than the home’s actual worth.
Buying a Home Without an In-Person Appraisal
While you might save some money upfront with an appraisal waiver, it could cost you much more down the road if you end up paying above the home’s true value.
Remember: an in-person appraisal confirms the property’s actual worth and protects both you and the lender.
Have more questions? Talk to one of our loan officers at Texas United Mortgage to understand whether an appraisal waiver makes sense for your financial situation. We’ll help you understand the requirements to ease the homebuying process.
Get in touch with us today to discuss your options!
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