Yes, conventional loans usually require an appraisal, but some borrowers qualify for an appraisal waiver through automated underwriting.
If you’re getting a conventional mortgage today, you’ll hear the word “appraisal” early. Lenders lean on it to confirm the home’s market value before they lend against it. Often, that means a licensed appraiser visits (or uses approved data sources) and writes a report.
Still, the answer isn’t a flat “always.” Some loans can close without a full appraisal when the file qualifies for a waiver or an approved alternative valuation. This guide shows when an appraisal is ordered, when it might be skipped, what it costs, and what to do if the value comes in low.
What A Conventional Loan Appraisal Does
A home appraisal is a lender tool, not a “pass/fail” test of the house. It answers one core question: if the borrower stops paying, would the home likely sell for enough to repay the loan balance? That’s why the report centers on recent comparable sales, property features, condition, and market trends.
Don’t mix up an appraisal with a home inspection. An inspection is about defects and repairs so the buyer can feel confident. An appraisal is about market value for the lender. You can still get an inspection even if the lender doesn’t require one.
Appraisal Requirements For Conventional Loans By Situation
Conventional appraisals show up in purchases, refinances, and cash-out deals, but the “why” changes with the transaction. Use the table below to match your situation to what lenders often request and where you may have options.
| Situation | What Lenders Often Require | What You Can Do Next |
|---|---|---|
| Purchase with strong down payment | Full appraisal or an eligible waiver | Ask if AUS returned a waiver before scheduling |
| Purchase with small down payment | Full appraisal is common | Plan for the appraisal fee and timeline |
| Rate-and-term refinance | Full appraisal, desktop/hybrid, or waiver | Confirm valuation option after AUS run |
| Cash-out refinance | Full appraisal is common | Expect tighter value scrutiny and longer turn times |
| Condo or co-op unit | Full appraisal plus project review steps | Share HOA docs early to avoid delays |
| 2–4 unit property | Full appraisal is common | Gather rent data and leases if they exist |
| New construction purchase | Full appraisal with plans/specs review | Provide final plans, upgrades list, and completion dates |
| Rural or nonstandard property type | Full appraisal is common | Expect wider comp radius and extra research time |
| Loan flagged for waiver | No full appraisal when lender accepts the waiver | Confirm any extra data collection steps in writing |
Are Appraisals Required For Conventional Loans?
In most cases, yes. A conventional lender wants an independent opinion of value before closing, and an appraisal is the standard way to get it. That’s why people keep asking are appraisals required for conventional loans? when they’re trying to budget fees and avoid surprises.
There are two big exceptions. First, your file may qualify for an appraisal waiver through the automated underwriting results. Second, a lender may use an approved appraisal alternative (like a desktop appraisal or a hybrid model) when the investor guidelines allow it and the lender is set up to accept it.
When An Appraisal Can Be Waived
Appraisal waivers are most common with one-unit homes, solid borrower profiles, and loan terms that fit automated underwriting rules. The waiver decision is made by the automated underwriting engines used for conventional loans, not by a guess from your loan officer.
Fannie Mae lists valuation paths in its Selling Guide, including sections that state when an appraisal isn’t required under Value Acceptance + Property Data. Freddie Mac posts its appraisal waiver rules in Guide Section 5602.3.
Signals That Often Help A Waiver
- A prior appraisal on the property in the agencies’ databases
- Low loan-to-value ratio
- One-unit property with standard features
- Clean ownership and title history
- Strong credit and stable income documentation
A waiver still isn’t a promise until your lender runs your full file through underwriting. A lender can also choose not to accept a waiver, even if the system offers it, based on internal risk rules.
Times A Waiver Is Less Likely
- Cash-out refinances where risk is higher
- 2–4 unit properties
- Homes with scarce comparable sales
- Properties with obvious condition issues
- Transactions in certain disaster-affected zones
Types Of Appraisals You Might See
Not every appraisal looks the same in 2025. Many conventional loans still use the classic “full” appraisal with an interior visit. Others use newer formats that meet agency standards while cutting time or in-person steps.
Full Interior Appraisal
The appraiser visits the home, measures, takes photos, checks condition, and matches the property to recent sales. This is still common for purchases and cash-out refinances.
Desktop Or Hybrid Appraisal
A desktop appraisal relies on public records, listing data, and other verified sources without an interior visit. A hybrid model mixes third-party property data collection with an appraiser’s report. These options are only allowed in specific cases under agency rules and lender overlays.
How Much A Conventional Appraisal Costs And How Long It Takes
Appraisal fees vary by region, property type, and appraiser availability. For a one-unit home, many borrowers see fees in the $400–$700 range, while multi-unit or unusual properties can run higher. Your Loan Estimate should list the fee early, and the final amount shows on the Closing Disclosure.
Turn times also swing. In some areas an appraiser can schedule within a week. In busy seasons it can take longer, especially for rural areas or homes where comps are thin.
What Happens After The Appraisal Comes Back
Once the report lands, underwriting checks two numbers: the contract price and the appraised value. The lender uses the lower of the two to set the loan-to-value calculation. If the value matches or beats the price, the file usually keeps moving.
If the value comes in under the contract price, you still have paths forward. The right move depends on your down payment, cash reserves, and how flexible the seller is.
Options When The Value Is Low
- Renegotiate the price. Many sellers will adjust if the comps back up the lower figure.
- Bring the difference in cash. This keeps the deal alive but raises your cash-to-close.
- Change the loan structure. A higher down payment can keep the same loan-to-value cap.
- Ask for a value review. Your lender can ask the appraiser to check better comparable sales or factual corrections.
- Switch lenders only with care. A new lender may still order an appraisal and land near the same value.
Second Table: Quick Cost And Timing Map
Use this as a rough planning tool when you’re building your closing calendar. Exact timing depends on your market and lender workflows.
| Step | What You Pay | What Usually Takes Time |
|---|---|---|
| Appraisal ordered | Fee collected upfront or at closing | Appraiser assignment in a busy zip code |
| Scheduling | No extra charge | Finding a slot that works for access |
| Site visit or data collection | No extra charge | Access, pets, lockboxes, occupant timing |
| Report writing | No extra charge | Comp research, adjustments, review |
| Underwriting review | No extra charge | Condition items or repair notes |
| Value review request | No extra charge | Gathering stronger comps and documentation |
| Clear to close | No extra charge | Final checks and disclosure timing rules |
How To Make The Appraisal Go Smoothly
You can’t “talk” an appraiser into a number, and you shouldn’t try. You can still make the visit easy and make sure the appraiser sees the right facts.
For Buyers
- Share your full purchase contract and any addenda with your lender fast.
- List upgrades that are already complete, with dates and receipts.
- Make sure the appraiser can access all rooms, attic, garage, and yard.
- Check that the listing shows accurate square footage and bed/bath count.
For Homeowners Refinancing
- Write a one-page upgrades list: roof, HVAC, windows, remodels.
- Fix small safety issues that can trigger repair calls: missing handrails, broken steps, exposed wiring.
- Clear clutter from tight areas so measurements are easy.
Common Questions People Ask Their Lender
People often circle back to the same core question: are appraisals required for conventional loans? A better way to ask your lender is to pin down the valuation option tied to your exact case.
- Did the automated underwriting findings offer an appraisal waiver?
- If yes, will the lender accept it, or is a full appraisal still required?
- If no, what appraisal type will be ordered: full, desktop, or hybrid?
- How long are appraisals taking in my county right now?
- What happens if the report calls for repairs?
Appraisal-Ready Checklist You Can Reuse
Save this checklist and run it a day before the appraiser visit or data collection. It keeps the visit short and reduces back-and-forth with underwriting.
- All utilities are on, including water and electric.
- All rooms are accessible, including any finished basement space.
- Upgrades list is printed or emailed to the lender.
- HOA contact info is ready for condos.
- Pets are secured during the appointment window.
- Repair receipts are grouped in one folder.
- Any safety items are fixed: rails, steps, smoke/CO alarms.
Takeaways For A Faster Closing
Most conventional loans still rely on an appraisal, so budget for the fee and the time. If your file is strong and the property is standard, you might qualify for a waiver, but you won’t know until your lender runs the file through automated underwriting and confirms it can be used. Either way, being ready with clean facts and quick access can keep your closing on track.