Freddie Mac has announced a new program allowing some home buyers to skip a traditional appraisal, which could lower the fees the buyers pay and speed up the closing process.It's an automated system ( ACE) that will determine a property’s collateral risk by puling data from multiple listing services, public records, and historical home values, and then assess whether a buyer needs a traditional appraisal or an automated one. Borrowers who are refinancing may also be eligible for the program.
On the positive side, those who qualify for an automated appraisal could save up to $500 in fees and make it to settlement up to 10 days sooner. On the downside, automated systems can't always determine upgrades, remodels, views and other factors that create accurate values.
We'll have to see how this program works out....
Source: “Freddie Mac Extends Appraisal-Free Mortgage Program to Purchase Loans,” HousingWire (Aug. 18, 2017) and Freddie Mac