When you’re buying or refinancing a home, the appraisal process can feel like a frustrating hurdle.
Between scheduling delays, appraisal fees, and the potential for unexpected results, it’s no wonder many borrowers are asking: What does PIW mean in mortgage terms?
PIW stands for Property Inspection Waiver, and it’s a valuable option that may allow you to skip the traditional home appraisal entirely, saving you both time and money.
In this guide, we’ll walk through how PIWs work, who qualifies, and what it could mean for your mortgage process.
Check your mortgage options.What is a Property Inspection Waiver (PIW)?
A Property Inspection Waiver is a feature offered through Fannie Mae’s Desktop Underwriter system, which allows certain borrowers to bypass the traditional home appraisal.
Instead of sending out a licensed appraiser, Fannie Mae relies on its automated valuation model (AVM) to determine the home’s value.
If your property and loan file meet specific risk and data standards, Fannie Mae may issue a PIW, meaning no in-person inspection is needed.
Think of it as a fast pass through one of the slowest parts of buying a home.
How does a PIW work in the mortgage process?
When you apply for a mortgage, your lender submits your application through Fannie Mae’s Desktop Underwriter® software. This system evaluates a wide range of risk factors, including your credit history, property details, and past sales data.
If the system determines that your loan is low risk and the property value can be accurately assessed through its internal models, it may automatically offer a PIW. Your lender then confirms the waiver and continues underwriting without the need for an external appraisal.
A PIW doesn’t affect your loan terms or amount—it simply removes one step from the process.
Who qualifies for a PIW?
Not all loans or borrowers are eligible for a Property Inspection Waiver. However, PIWs are commonly offered when:
- You’re buying or refinancing a single-unit property
- Your loan is a purchase or limited cash-out refinance
- The property is a primary residence, second home, or investment property
- Your loan-to-value (LTV) ratio is 80% or less
- There’s sufficient historical data available about the home’s previous sale or valuation
This combination signals to Fannie Mae that the risk of the loan is relatively low, and that an automated valuation is likely reliable.
When is a PIW not an option?
There are several scenarios where a PIW is automatically not available.
These include:
- Two- to four-unit properties
- Cash-out refinances
- New construction or construction-to-permanent loans
- Condominiums, co-ops, and leasehold properties
- Manufactured homes
- Properties recently involved in a foreclosure or still owned as an REO (real estate owned)
In such cases, a comprehensive appraisal is typically required to assess risk and property value accurately.
Benefits of choosing a PIW
For those who qualify, PIW comes with several appealing benefits:
- Faster closing: You won’t need to wait for an appraiser’s availability, report turnaround, or revisions.
- Lower out-of-pocket costs: Appraisals can cost anywhere from $400 to $800 depending on location. A PIW usually involves a small fee that’s significantly lower.
- Less paperwork: Appraisal documentation can be extensive—bypassing it simplifies the process.
- Reduced stress: No worrying about low appraisals jeopardizing your financing.
In today’s market, where appraisal delays can push closing timelines by weeks, a PIW can be a game-changer.
Are there any downsides to PIWs?
While PIWs offer convenience, they’re not ideal for every scenario:
- Market volatility: If the property’s market value has changed rapidly, a traditional appraisal might better reflect its true worth.
- Missing insights: An in-person appraisal can catch condition issues or needed repairs that AVMs won’t detect.
- No appeal process: If you believe the AVM underestimates your property’s value, you can’t request a reconsideration like you could with a human appraisal.
Still, for borrowers with stable properties and solid qualifications, a PIW often offers more pros than cons.
How to know if you qualify
The only way to know for sure if you qualify for a PIW is to apply for a mortgage and have your application submitted through Desktop Underwriter®.
Your lender will receive an instant response indicating whether a waiver is granted.
Depending on your situation, your lender may be able to determine eligibility early in the process.
FAQs about Property Inspection Waivers
Does a PIW mean the home hasn’t been inspected at all?
Not exactly. Although no formal appraisal is conducted, the automated valuation is based on data from previous sales, tax records, and neighborhood comparables.
Will using a PIW affect my loan approval or interest rate?
No. If granted, the PIW is accepted by Fannie Mae just like a traditional appraisal.
Can I opt out of a PIW if I want a full appraisal?
Yes. If you prefer to have a licensed appraiser inspect the property, you can request a full appraisal even if you qualify for a PIW.
Work with a lender who puts speed and savings first
A Property Inspection Waiver can be a fast, affordable shortcut through the mortgage maze—if you’re eligible.
It’s just one of the ways GO Mortgage can help streamline your homebuying journey and get you to the finish line faster.
Whether you qualify for a PIW or need support navigating more complex financing, GO Mortgage is here to help.
Our experienced team is ready to walk you through your options, answer your questions, and find the fastest path to your next home.
Get started with GO Mortgage.