Federal Mortgage Law · 24% of the SAFE exameasy
Correct answer: When the lender waives the full appraisal based on automated valuation confidence; the borrower must acknowledge the risks of no in-person property inspection
A PIW (also called an Appraisal Waiver) allows the lender to skip a traditional appraisal when automated valuation models (AVMs) and property data show high confidence in the value. Fannie Mae and Freddie Mac offer these on eligible transactions. The borrower must acknowledge that no appraiser physically inspected the property — meaning hidden defects or value discrepancies may go undetected. PIWs reduce cost and speed up closing but shift some risk to the borrower.
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