In this article
Kooky
Builder of Shaka, the payment router that pays every agent their commission on closing date.
About Kooky and Shaka →Most loans delivered to Freddie Mac still come with an appraisal report, the company says. For part of the loans that lenders sell to Fannie Mae and Freddie Mac, that step is now replaced by something else. The decision is taken by software, on data the two companies already hold, and it is taken before anyone drives to the house. Whether a loan gets that treatment depends on a short list of published conditions, and it changes what the lender must do, what it is relieved of, and what the buyer pays for.
This guide sets out those conditions as the two companies publish them. It covers Fannie Mae's value acceptance, its companion option called value acceptance + property data, the hybrid appraisal, and Freddie Mac's automated collateral evaluation, known as ACE, with its own property data version, ACE+ PDR. It draws on the Fannie Mae Selling Guide, Fannie Mae's single-family summary pages and Freddie Mac's single-family pages. The rules described are those of the two companies for loans sold to them across the United States; they are not state law, and they say nothing about loans a lender keeps or sells elsewhere.
Fannie Mae Selling Guide, topic B4-1.4-10 (dated 3 June 2026), and Fannie Mae's value acceptance summary (updated September 2025).
The options, from waiver to hybrid appraisal
The options sit on a ladder, and each rung asks for a little more evidence about the property.
At the bottom is value acceptance, Fannie Mae's name for an offer that carries no appraisal requirement. The Selling Guide, in topic B4-1.4-10, puts it in one line: for certain loan casefiles, Fannie Mae's Desktop Underwriter (DU) system offers value acceptance, "in which case an appraisal is not required." Fannie Mae's summary page describes the offer as an agreement to accept the value the lender submitted. For a purchase, that value must be based on the contract price. For a refinance, it is the lender's or the borrower's estimate.
Related readUSA: how UAD 3.6 and the new URAR replace numbered appraisal formsOne rung up is value acceptance + property data. According to Fannie Mae's summary, it is offered when a loan meets the requirements for value acceptance but Fannie Mae needs more information about the property, including its current characteristics and condition. Selling Guide topic B4-1.4-11 describes it as an option that replaces the appraisal: interior and exterior data is collected at the property to verify that it is eligible, and Fannie Mae still accepts the lender's value.
The third rung is the hybrid appraisal, covered by topic B4-1.2-03. Here there is an appraisal and an appraiser, but the appraiser works from data collected at the property by a trained, vetted third party.
Freddie Mac runs a parallel pair. Its single-family pages describe ACE as an automated collateral risk assessment inside Loan Product Advisor, its own underwriting system, which lets lenders deliver loans to Freddie Mac without an appraisal report. ACE+ PDR adds a property data report: in Freddie Mac's words, additional property information is physically collected on site by trained data collectors, in lieu of an appraisal. Freddie Mac presents ACE+ PDR as one of five collateral valuation offerings.
How the software decides
For Fannie Mae, the Selling Guide explains the main ingredient. Generally, a prior appraisal of the same property must already exist in the data of Fannie Mae's Collateral Underwriter (CU). DU matches the address of the property against that data. A prior appraisal is set aside if it carries a CU overvaluation flag or could not be scored. Fannie Mae's summary adds that the company combines its database of appraisals, which it counts in the millions, with proprietary analytics to set the minimum level of collateral due diligence a loan requires.
Related readWestern Australia's official property tools: titles, alerts, valuesThe summary page adds a rule that works the other way: DU will not offer value acceptance if an appraisal of the property was uploaded to the Uniform Collateral Data Portal within the prior 120 days by any lender.
Freddie Mac's description is similar in kind. Its ACE pages say the assessment uses proprietary models, 40 years of historical data and public records. Its frequently asked questions add that the models analyse existing appraisal data, multiple listing service data and public records. The lender's part, as Freddie Mac lists it, is to submit the loan to Loan Product Advisor before ordering an appraisal, to give the estimated value for a refinance or the purchase price for a purchase, and then to read the Feedback Certificate, which shows whether the loan is eligible for ACE.
Fannie Mae says its offers are available to all lenders through DU, with no prerequisites and no registration. Freddie Mac says there is no fee associated with ACE.
Which Fannie Mae loans can qualify
The Selling Guide limits value acceptance to one-unit properties, condominiums included, on loans that receive an Approve/Eligible recommendation from DU. Principal residences and second homes can qualify on purchases and refinances. Investment properties can qualify on refinances.
Within that perimeter, the ceiling is set by the loan-to-value ratio: the loan as a percentage of the value given to DU. Fannie Mae's summary page publishes the maximum for each case, as a loan-to-value (LTV) and combined loan-to-value (CLTV) limit.
| Transaction | Principal residence | Second home | Investment property |
|---|---|---|---|
| Purchase | 90% | 90% | Not listed |
| Limited cash-out refinance | 90% | 90% | 75% |
| Cash-out refinance | 70% | 60% | 60% |
Fannie Mae, value acceptance summary, updated September 2025. The Selling Guide governs where the two differ.
The summary notes that DU version 12.0, in January 2025, expanded eligibility for purchase transactions.
Related readDubai Land Department's digital tools: who uses each and what it costsA worked example shows how the ceilings bite. Assume a principal residence under contract at US$400,000. With a loan of US$360,000, the ratio is 360,000 divided by 400,000, or 90%: exactly at the purchase ceiling, so the loan sits inside the range in which DU may make an offer. With a loan of US$388,000, the ratio is 97%, above the ceiling, and plain value acceptance is out of reach whatever the data on the house.
A second worked example, for refinancing. Assume a home with an estimated value of US$500,000. As a principal residence, a limited cash-out refinance could reach 90% of that, US$450,000, and a cash-out refinance 70%, US$350,000. As a second home, the cash-out ceiling falls to 60%, US$300,000. As an investment property, a limited cash-out refinance stops at 75%, US$375,000. These figures are the edges of eligibility only: being under a ceiling does not by itself produce an offer.
The Selling Guide also lists the transactions that are shut out of value acceptance whatever the ratio:
- two- to four-unit properties;
- co-op units and manufactured homes;
- proposed construction, and construction-to-permanent loans, whether single-close or two-close;
- HomeStyle Renovation and HomeStyle Refresh loans;
- leasehold properties;
- Texas Section 50(a)(6) loans;
- community land trusts and properties with resale price restrictions, including loans that use the Affordable LTV feature;
- transactions in which the purchase price or the estimated value given to DU is US$1,000,000 or more;
- transactions that use gifts of equity;
- casefiles with an Ineligible recommendation, and manually underwritten loans.
There is one stated exception on the construction side. DU may offer value acceptance on new construction if an existing "as is" prior appraisal of the property is on file and the loan meets every other criterion.
Fannie Mae's summary page adds a case the list above does not spell out: loans on which the mortgage insurer requires an appraisal. The summary states that the Selling Guide governs in any conflict between the two documents.
An offer the lender cannot always take
An offer from DU is not the end of the matter. The Selling Guide names four situations in which the lender must order an appraisal even though an offer appeared:
Related readDubai's property portals: owners, listing rules and broker costs- DU could not identify a criterion that makes the loan ineligible; the Guide gives Texas Section 50(a)(6) loans as its example.
- The law requires an appraisal.
- The lender uses rental income from the property itself to qualify the borrower.
- The lender believes an appraisal is warranted, on the basis of additional information or of events after the offer.
When none of those applies, three conditions must all hold for the lender to exercise the offer: the final submission to DU produced it, no appraisal was obtained for the transaction, and the offer is not more than four months old on the date of the note and mortgage. The loan is then delivered with Special Feature Code 801.
An appraisal, once obtained, cancels the waiver
Under the Fannie Mae Selling Guide, a lender that obtains an appraisal for the transaction may not exercise the value acceptance offer. Freddie Mac's ACE questions and answers say the same in its own terms: if an appraisal report is obtained before delivery, the loan loses ACE eligibility.
The Guide also closes the door on picking and choosing. Lenders may not adversely select against Fannie Mae when deciding which offers to accept, and Fannie Mae says it may monitor how offers are exercised and delivered and take action if it finds adverse selection. A lender that declines an offer must, according to the summary page, at least follow the appraisal recommendation DU gives for the loan.
Value acceptance plus property data: a visit without an appraiser
The second rung keeps the lender's value but adds eyes on the property. The Selling Guide describes the person who goes: a property data collector who personally visits the home and records it with a hand-held application built to the Uniform Property Dataset (UPD). That dataset has required, conditionally required and optional elements, and it includes photographs and a floor plan that conforms to the ANSI standard. The finished collection must be successfully submitted to Fannie Mae's Property Data API before the note date.
The collector need not be an appraiser. The hybrid appraisal topic of the Guide gives a real estate agent, an insurance inspector and an appraiser as examples, and the data field that records who did the work accepts six values: appraiser, appraiser trainee, real estate agent, home inspector, insurance inspector, or other. What the Guide insists on is the person's standing. The collector must be professionally trained and vetted, must have the knowledge the task needs, and must be free of conflicts of interest with the loan, the people involved in it, and the property.
Related readDubai's REES initiative and PropTech Hub: targets, entry routes, deliveryThe duty to make that true is the lender's. The Guide requires an annual background check, selection in line with Fannie Mae's Property Data Collector Independence Requirements, and an annual review of credentials. The lender must train collectors on fair lending laws and monitor their work through quality control, before funding and after closing. Collectors, for their part, must report problems of safety, soundness or structural integrity, and significant construction or renovation left incomplete.
Where the offer reaches further is on purchases. Fannie Mae's summary gives the ceiling for value acceptance + property data on a purchase of a principal residence or second home as the limit of the loan programme itself: up to 97% LTV and CLTV, and up to 105% CLTV with Community Seconds. In the worked example above, the buyer borrowing US$388,000 against a US$400,000 contract price, at 97%, was above the ceiling for plain value acceptance but is within the stated range of this option.
The exclusions mirror those of value acceptance, including the US$1,000,000 line, with one worded differently: investment properties are shut out where rental income from the property is used to qualify the borrower.
The lender's conditions, as the Guide sets them out, echo those of value acceptance: the final DU submission returns the eligibility message, the collection reaches the Property Data API before the note date, no appraisal is obtained, the offer is no more than four months old on the date of the note and mortgage, and the loan is delivered with Special Feature Code 774. A collection, once made, is valid for 12 months from its date.
Related readNew South Wales property data tools: what each official one showsCollecting data is not the same as passing. Because there is no appraiser, the Guide makes the lender the reader of the file: it must review the data and the photographs itself in order to stand behind what it represents to Fannie Mae, namely that the property has no safety, soundness or structural integrity issues, no significant incomplete construction or renovation, and meets Fannie Mae's property eligibility requirements.
If the collection points to trouble, the Guide says the lender may need a report prepared by a qualified professional to confirm that the home is eligible and to establish what must be repaired. It gives wells, septic systems, foundations, roofs, electrical systems and mould as examples. Required repairs must be completed and documented before the loan is sold to Fannie Mae, under the completion rules of topic B4-1.2-05, which include Form 1004D and the permitted alternatives to it.
The loan itself can also move. If a change to the loan's qualifying terms causes the offer to be lost after the data has been collected, the Guide allows the same data, in some cases, to be handed to an appraiser for a hybrid appraisal. Otherwise, the lender obtains a desktop or traditional appraisal, as DU specifies.
Hybrid appraisals: an appraiser who does not visit
A hybrid appraisal is a real appraisal with a divided workflow. Under topic B4-1.2-03, the appraiser must consider the interior and exterior data collected by the third party and relies on it, with other sources, to assess the property's characteristics, condition included. The data collection and the appraisal report are separate assignments and may be done by different people. If the appraiser did not collect the data, the lender must supply it when it engages the appraiser. An appraiser who collects the data and later writes the report still produces a hybrid appraisal. The effective date is the date on which the appraiser arrives at the opinion of value.
Related readNew South Wales Strata Hub: what schemes report, fees and penaltiesTwo forms exist: Form 1004 Hybrid, the hybrid version of the Uniform Residential Appraisal Report, and Form 1073 Hybrid for individual condominium units. Both need the same exhibits as a traditional appraisal, plus the ANSI floor plan.
A lender reaches a hybrid by one of two roads. DU may offer it directly, in which case the lender may choose a hybrid, a desktop or a traditional appraisal. Or the loan arrives there after losing its value acceptance + property data eligibility once the data has been submitted.
- CollectA property data collection is obtained and submitted to the Property Data API.
- AppraiseThe data goes to an appraiser, who completes Form 1004 Hybrid or 1073 Hybrid.
- SubmitThe appraisal is sent to the Uniform Collateral Data Portal.
- ReviewThe lender reviews the appraisal as the Selling Guide requires.
- DeliverThe loan is delivered to Fannie Mae with the hybrid appraisal.
The hybrid is open to some loans the two waivers exclude. The Guide lists as eligible existing one-unit properties, condominiums included, as principal residences, second homes or investment properties; properties under construction; existing properties with incomplete construction or a renovation project; community land trusts and other resale-restricted properties; and Texas Section 50(a)(6) loans. Purchases, limited cash-out refinances and cash-out refinances all qualify. Still excluded are two- to four-unit properties, co-op units, manufactured homes, proposed construction, construction-to-permanent loans, the two HomeStyle products, casefiles with an Ineligible recommendation and manually underwritten loans.
| Option | Visit to the home | Whose value | Delivery marker |
|---|---|---|---|
| Value acceptance | None | The lender's submitted value | Special Feature Code 801 |
| Value acceptance + property data | Trained, vetted data collector | The lender's submitted value | Special Feature Code 774 |
| Hybrid appraisal | Trained, vetted data collector | The appraiser's opinion | Form 1004 Hybrid or 1073 Hybrid |
Fannie Mae Selling Guide, topics B4-1.4-10, B4-1.4-11 and B4-1.2-03.
Freddie Mac's ACE and ACE+ PDR
Freddie Mac's public single-family pages say less about eligibility than Fannie Mae's, and point to section 5602.3 of its Guide for the detail. What they do state is enough to see the same two-rung design.
On limits, a Freddie Mac notice dated 12 December 2024 reported that Guide Bulletin 2024-16 expanded both options for purchase transactions, effective 24 March 2025. The maximum for ACE on a purchase rose from 80% to 90%, expressed as Freddie Mac's LTV and TLTV ratios. For ACE+ PDR, the maximum moved from 80% to the highest ratio allowed for the mortgage product concerned. That matches Fannie Mae's structure for purchases.
Related readSingapore's official property tools: what HDB, URA and CEA put onlineOn the property data report, Freddie Mac's ACE+ PDR questions and answers, last updated on 4 June 2025, are firm about who carries the judgement. A PDR reports on the condition of the property. It is submitted to a Freddie Mac interface called the bACE API, which returns a 36-character identifier for each submission; the lender includes the most recent one when it resubmits the loan to Loan Product Advisor. Submitting the report does not discharge the lender. It must still review the PDR, photographs included, decide independently whether repairs are needed, and confirm that the property meets both the ACE+ PDR requirements and Freddie Mac's property eligibility rules.
The same page deals with a report that turns up more units than expected. If the property really has more than four units, the loan cannot be sold to Freddie Mac. If it has two to four, the lender moves up to a traditional appraisal for that property type.
What the lender gets, and what it still owes
For the lender, the gain is of two kinds. The first is operational: Fannie Mae's summary says the process can be shortened because there is no appraisal to obtain and review. The second is legal. Fannie Mae's summary says that a lender exercising value acceptance receives relief from enforcement of certain representations and warranties, covering the property's value, marketability, physical characteristics, eligibility and condition, under the label Day 1 Certainty. The relief is not unconditional. The lender must represent that the other data it submitted to DU, everything except the value, is complete and accurate, and it must order an appraisal if it has reason to think one is warranted.
Related readSingapore property portals: who owns them and what agents payWith property data, more stays with the lender. The representations on safety, soundness, structural integrity, incomplete work and property eligibility described earlier are the lender's own. With a hybrid appraisal, the Guide says the lender remains responsible for the accuracy of the property description, the completeness of the data, including condition and quality ratings, property eligibility and the applicable life-of-loan representations and warranties. Relief on certain value representations is available for eligible loans when Collateral Underwriter, which scores hybrid appraisals submitted through the portal, returns a risk score of 2.5 or less.
At Freddie Mac, the questions and answers show that relief on collateral representations for an ACE+ PDR loan is tied to procedure: after the report is submitted, the loan must be resubmitted to Loan Product Advisor before the relief status appears in Freddie Mac's Loan Selling Advisor.
What the buyer gets, and does not get
For the borrower, the published benefits are money and time. Fannie Mae's summary says the consumer saves because no appraisal is paid for. It counts 5.34 million loans sold with value acceptance from January 2018 to June 2026 and estimates borrower savings at US$3 billion, using an approximate weighted average appraisal cost of US$550. The arithmetic can be checked: 5.34 million loans at US$550 each comes to about US$2.94 billion.
Freddie Mac puts the average saving at US$600 per borrower and the total at more than US$2.3 billion as of September 2025. It also reports, as of the second quarter of 2025, that ACE loans closed faster by an average of 14 days for purchases and 12 days for refinances. Fannie Mae says its approach may help lenders close sooner, without giving a number of days.
Related readSingapore land records online: what SLA's INLIS and OneMap showWhat the buyer does not get is equally plain from the rules. With value acceptance or ACE, no appraiser forms an opinion of the home, and with the property data options the person who visits records the property without valuing it. On a Fannie Mae purchase, the value in the file is the contract price the buyer agreed. Nor is the choice the buyer's to make under these rules: the offer is made to the lender, and it is the lender that exercises it, declines it, or is obliged to order an appraisal.
A waiver does not say what a home is worth. It says the loan can be sold without anyone having to ask.
The pages read for this guide do not set out what a lender must tell a borrower when a waiver is used. Asked whether there are regulatory disclosure requirements for a lender accepting an ACE offer, Freddie Mac's own answer is that lenders should put the question to their legal counsel or their regulator.
What the published pages leave open
Several points cannot be settled from the public pages and are worth naming.
Freddie Mac's ceilings for refinances, any price or value cap, the property types it admits and the age an ACE offer may reach are set in section 5602.3 of its Guide, which its summary pages cite without reproducing. Only the purchase limits above, announced in December 2024, were stated on the pages consulted, and Freddie Mac's own treatment of hybrid appraisals was not among them.
Neither company publishes, on these pages, what a property data collection or a hybrid appraisal costs, or who bears that cost. The savings figures above concern the appraisal fee that is avoided, not the price of what replaces it.
Finally, Freddie Mac notes that most loans delivered to it still come with an appraisal report. The waiver remains a defined exception with published edges.
Kooky, from Shaka
Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
