Appraisal modernization FAQs for lenders

Adopting an appraisal modernization workflow can create cost and time savings for lenders and their borrowers. With the announcement of the new Uniform Property Dataset, it’s never been easier for lenders to adopt appraisal modernization programs. Read on to find answers to commonly asked questions about these programs and learn how you can get started modernizing appraisals at your company.

1. How do inspection-based appraisal waiver programs work?

To obtain an inspection-based appraisal waiver for qualified loans, follow these three steps:

  1. Submit the loan to a GSE automated underwriting system, such as Fannie Mae’s Desktop Underwriter® or Freddie Mac’s Loan Product Advisor®.
  2. The GSE’s automated underwriting systems will determine if a loan is eligible for an inspection-based appraisal waiver.
  3. If eligible, order a data collection from an approved provider. A qualified property data collector will visit the property to conduct the inspection and verify the property’s features and condition. The results are submitted to the GSE and delivered back to you. 

2. What are the benefits of using inspection-based appraisal waivers?

Using inspection-based appraisal waivers saves lenders time and money — savings that can be passed on to consumers. When using Clear Capital’s Universal Data Collection™ (UDC™) for the property data collection, lenders will spend less than half of what they would spend on a traditional appraisal and enjoy turn times as short as three days. 

3. What is the Uniform Property Dataset (UPD)?

The UPD is a unified data standard for Fannie Mae’s Value Acceptance + Property Data and Freddie Mac’s ACE+ PDR. These two programs now share a property data collection standard. This means that lenders can submit to either program using the same property data collection. Underwriters no longer have to remember the data standards for two separate programs.

4. What is a property data collection?

During the property data collection process, data collectors are required to identify and photograph all structures and rooms on a property — documenting any upgrades, damages, additions, conversions, and site features on a property. Data collectors will also take note of all building materials and utilities present and use a tool like CubiCasa to generate an ANSI-aligned floor plan that includes gross living area (GLA) calculations. 

Once the property data collection is finished and the collector has gathered all the necessary information, the data is submitted to the GSE and delivered to the lender.

5. Who can perform property data collections?

Freddie Mac and Fannie Mae require data collectors to be trained and background-checked professionals. Clear Capital employs licensed real estate agents to perform property data collections. Real estate agents are a great choice for property data collection services because they are trained in real estate and must meet state licensing and monitoring requirements.

Clear Capital employs a number of checks to eliminate conflicts of interest. We always ensure that the real estate agent performing the data collection is not involved in the sale or purchase of the property.

6. Do lenders need to review the property data collection?

Yes, lenders are responsible for performing quality checks in two stages — pre-funding and post-closing. The quality check requirements are essentially the same as they are for any other loan.

7. How do hybrid and desktop appraisals work?

With hybrid and desktop appraisals, the appraiser relies on a property data collection to complete the appraisal. A hybrid appraisal requires a physical inspection of the property by a third party. A desktop appraisal can be completed without a physical inspection, but can include consideration of a third-party inspection.

8. What are the benefits of using a hybrid or desktop appraisal?

Both hybrid and desktop appraisals may cost less than a traditional appraisal and take less time. Lenders who use these appraisal modernization methods enjoy reduced costs and quicker turn times — both of these benefits can be passed on to consumers.

9. Will appraisers accept hybrid and desktop appraisal assignments?

Yes! Clear Capital works with more than 5,000 appraiser partners who perform hybrid and desktop assignments. To date, we’ve completed more than 235,000 hybrid and desktop appraisals. 

To start modernizing appraisal at your company, get in touch with us. We’d love to discuss how inspection-based appraisal waivers, hybrid appraisals, and desktop appraisals can save you and your customers time and money. Email, call 530.550.2525, or learn more about our appraisal modernization tools.

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