themortgagellm™Appraisal waiver probability for a 65 LTV / 760 FICO conventional refinance
“What is the appraisal waiver probability for this loan? Conventional rate-and-term refinance, primary residence, 1 unit, $300K loan on $500K value, FICO 760, DTI 32.”
Response
Appraisal Waiver Probability (PIW / Value Acceptance / ACE) model output for the loan you described:
- Input summary: conventional rate-and-term refinance, primary residence, 1 unit, $300K loan on $500K value (60% LTV), FICO 760, DTI 32, fixed-rate
- Calibrated probability of an appraisal waiver: ~57%
- Risk band: BASE (within the model's baseline range — strong candidate but not yet in the top decile)
- Operating recommendation: Reasonable to set the pre-DU/LPA pricing expectation that a waiver applies. Confirm with the AUS run before final lock.
What's driving the prediction up:
- Low LTV (60%) — the single most important feature. Loans at 60-70% LTV have historically been the densest waiver segment; the GSEs are comfortable waiving appraisal at this equity tier because property risk is muted.
- Rate-and-term refinance — refis dominate the waiver pool, and a same-borrower-same-property refinance gives the GSE's collateral database prior valuation history to anchor on.
- FICO 760 / DTI 32 — strong credit characteristics that align with the historical waiver-eligible distribution.
What it means operationally. If the file does clear DU's Value Acceptance check, the borrower saves $500-700 in appraisal cost and the file closes 7-10 days faster than a traditional appraisal path. On a $300K refinance the close-time differential matters more than the fee saving — it materially shortens lock-period exposure for the lender.
What the model can't see. The GSE's authoritative waiver decision incorporates property-specific data — Collateral Underwriter database depth on the subject address, neighborhood comparable density, prior valuation history on the property — that isn't available outside Fannie / Freddie. This model captures the structural-eligibility signal from loan and borrower features; the AUS run remains the authoritative call. Position the 57% as a pre-DU/LPA heuristic, not as a guaranteed outcome.
Scope. Conventional conforming only. FHA / VA / USDA / jumbo / portfolio-held loans follow entirely different appraisal regimes and are out of scope for this model.
Calibration: Test-set AUC 0.85 (2024-2025 cross-cycle holdout); isotonic-calibrated (ECE 0.0008). Predicted probabilities track realized waiver rates closely on the test population.