Fannie Mae’s Value Acceptance + Property Data Overview

You’ve heard of this program, but you may not have had time to look into the details. This article is intended to provide you with a quick overview and connect you with the resources for a deeper dive:

1. What Is the Program?

2. Which Loans Are Eligible?

3. How Does the Program Work?

4. What Are The Benefits of the Program?

5. What Does Freddie Mac Offer that is Similar?

What Is the Program?

Value Acceptance + Property Data comprises an important new addition to Fannie Mae’s Valuation Modernization Program. Per Fannie, this initiative is “Empowering lenders to better serve their customers through a spectrum of options that foster a more efficient, understandable, and impartial valuation system, saving time and money in the origination process.”

The graphic below illustrates the valuation spectrum and highlights where Valuation Acceptance + Property Data fits into the overall scheme. Fannie states, “We’re transitioning to a spectrum of options to establish a property’s market value, with the option matching the risk of the collateral and the loan transaction. The spectrum balances traditional appraisals with appraisal alternatives.”

Value acceptance + property data extends value acceptance (appraisal waiver) benefits to more borrowers while identifying current subject property characteristics including condition.

Which Loans Are Eligible?

Generally, purchase and refinance transactions for single family homes and second homes will be considered for Valuation Acceptance + Property Data. Ineligible transactions are listed in the Fannie Mae’s Selling Guide (B4-1.4-11)

How Does the Program Work?

Value Acceptance Steps:

Lender receives value acceptance + property data offer from Desktop Underwriter® (DU®).
Lender arranges for property data collection from approved provider. An updated list of approved providers may be accessed here. CSS partners with several of these providers, and is able to facilitate property data collection orders.
Lender or service provider submits the results to Fannie Mae’s Application Programming Interface (API).

DU began issuing new messages for value acceptance + property data on April 15, 2023.

Property Data Collection Process:

The property data collection consists of a visual observation of the interior and exterior areas of the subject property. It must be performed by a trained and vetted property data collector* and must adhere to Fannie Mae’s Property Data Standard. The Standard sets forth the minimum requirements for collection of subject property data including photos and a floor plan conforming to the ANSI Standard. Once the PDC is collected and passes quality controls checks, it must be submitted to Fannie Mae’s Property Data API.

*The property data collector is the individual who personally visits the subject property to perform the property data collection guided by an application on a hand-held device developed in compliance with Fannie Mae’s Property Data Standard.

What Are the Benefits of the Program?

Fannie states:

“This new option reduces cycle times and may reduce borrower costs, promotes safety and soundness by obtaining a current observation of the subject property, and provides operational simplicity and certainty at time of loan application.”

The program should extend the use of valuation acceptances (appraisal waivers) to more borrowers.

What Does Freddie Mac Offer that is Similar?

Freddie Mac does offer a similar program. Their program is named ACE (automated collateral evaluation) + PDR (property data report). ACE + PDR is a new offering that allows lenders to originate cash-out and certain no cash-out refinance loans without an appraisal. With ACE + PDR, additional property information is physically collected on-site by trained data collectors using the proprietary Freddie Mac PDR dataset, in lieu of an appraisal.

Eligibility requirements differ from Fannie Mae’s Valuation Acceptance program. A detailed look at Freddie Mac’s eligibility requirements can be accessed here.

Conclusion

This should provide you with a basic understanding of Fannie Mae’s Valuation Acceptance + Property Data program – what it is and how it works – together with a look at Freddie Mac’s similar program. Both seek to harness residential valuation technology improvements to further their stated goals of “saving time and money in the origination process.” If you would like a deeper dive into these programs, some useful resources have been listed here.

Resources:

Visit Fannie’s Valuation Modernization page to get onboarding details and more info about using the technology and tools.

Fannie Mae’s Selling Guide

Freddie Mac’s ACE + PDR FAQs