New program to help buyers bypass appraisals
Mortgage giant Freddie Mac has announced a new program allowing some homebuyers to skip a traditional appraisal, which could lower the fees the buyers pay and speed up the closing process. Freddie’s Automated Collateral Evaluation (or ACE) will determine a property’s collateral risk by culling 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.
Lenders will be able to assess whether a property is eligible for ACE by submitting data through Freddie’s Loan Product Advisor. The program will factor in credit, capacity, and collateral to assess the quality of the loan and determine whether the estimated value of the home provided by the lender is acceptable. ACE will be available for home purchases beginning Sept. 1; it has been available for qualified refinances since June 19.