No-Appraisal Refinancing: Meaning, Eligibility

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James Chen
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James Chen, CMT is an expert trader, investment adviser, and global market strategist.

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Updated June 03, 2024
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Doretha Clemons, Ph.D., MBA, PMP, has been a corporate IT executive and professor for 34 years. She is an adjunct professor at Connecticut State Colleges & Universities, Maryville University, and Indiana Wesleyan University. She is a Real Estate Investor and principal at Bruised Reed Housing Real Estate Trust, and a State of Connecticut Home Improvement License holder.
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Part of the Series
Refinance a Home
Know the Basics
  1. Refinance Your Home
  2. Cash-Out vs. Rate-and-Term
  3. Rate-and-Term Refinance
  4. Cash-Out Refinance
  5. No-Appraisal Refinance
    CURRENT ARTICLE
Effects on Financial Status
  1. Before You Refinance
  2. Refinancing and Your Net Worth
  3. Refinancing and Your FICO Score
When to Refinance
  1. The Best Time to Refinance
  2. Is Refinancing a Good Idea?
  3. Refinancing and Interest Rates
  4. Bad Reasons to Refinance
How to Refinance
  1. Home Appraisals
  2. Picking the Right Lender
  3. Best Mortgage Refinance Companies
Two lenders discussing whether a prospective borrower qualifies for no-appraisal refinancing

Ugur Karakoc / GettyImages

What Is No-Appraisal Refinancing?

No-appraisal refinancing is a type of mortgage that replaces an existing loan on a residence where the lender does not require an independent, professional assessment of a home’s value to extend a new mortgage. A home appraisal determines the fair market value of a property and helps the lender determine that borrowers are not asking for more money than a home is worth. 

Private lenders, such as banks and mortgage companies, commonly require appraisals to refinance. However, the lender may waive the refinance appraisal if borrowers have a Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA), or U.S. Department of Agriculture (USDA) loan.

Key Takeaways

  • No-appraisal refinancing replaces an existing mortgage on a residence and does not require a new home value assessment.
  • Homeowners typically choose no-appraisal refinancing when they are unlikely to qualify for a new standard loan.
  • No-appraisal refinancing is available from government agencies, including the Federal Housing Administration (FHA), the U.S. Department of Veterans Administration (VA), and the U.S. Department of Agriculture (USDA).

Understanding No-Appraisal Refinancing

No-appraisal refinancing is good for homeowners but risky for lenders. Homeowners typically choose no-appraisal refinancing when they are unlikely to qualify for a new loan that requires an appraisal. No-appraisal refinancing is available from several government sources: 

Upfront fees on Fannie Mae and Freddie Mac home loans changed in May 2023. Fees were increased for homebuyers with higher credit scores, such as 740 or higher, while they were decreased for homebuyers with lower credit scores, such as those below 640. Another change: Your down payment will influence what your fee is. The higher your down payment, the lower your fees, though it will still depend on your credit score. Fannie Mae provides Loan-Level Price Adjustments on its website.

Benefits of an Appraisal

Borrowers may be better off refinancing with a loan that requires an appraisal. For borrowers paying private mortgage insurance (PMI) due to a down payment of less than 20% of the purchase price, an appraisal may show the home’s value has increased and could void the PMI requirement on the new loan. The equity increase can also earn a lower interest rate on the refinanced mortgage.

Mortgage lending discrimination is illegal. If you think you've been discriminated against based on race, religion, sex, marital status, use of public assistance, national origin, disability, or age, there are steps you can take. One such step is to file a report with the Consumer Financial Protection Bureau or the U.S. Department of Housing and Urban Development (HUD).

When Is a Mortgage Considered Underwater?

A mortgage is considered underwater when more is owed on the mortgage than the property is worth. If the borrower defaults on the mortgage, the lender won't be able to sell the property for the balance of the outstanding mortgage and incur a loss.

What Is Streamline Refinancing?

Streamline refinancing is a way for homeowners to refinance their mortgages with less paperwork and credit documentation. Borrowers with FHA, VA, or USDA loans may qualify for a streamline refinance that doesn't require appraisals.

Why Do Borrowers Refinance Their Mortgage?

A refinance can help a borrower change the terms of an existing loan and revise the interest rates, payment schedules, or other terms.

The Bottom Line

No-appraisal refinancing is available from government agencies, including the Federal Housing Administration, Veterans Administration, and the Department of Agriculture. Refinancing a mortgage can help a borrower change the terms of an existing loan and revise the interest rates and payment schedule.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. Rocket Mortgage. "No-Appraisal Refinance."

  2. U.S. Department of Veterans Affairs. "Interest Rate Reduction Refinance Loan."

  3. Fannie Mae. "Fannie Mae’s New Refinance Option Available Beginning June 5."

  4. Freddie Mac. "Freddie Mac Refi Possible Available this Summer to Help Lower-Income Homeowners Benefit from Refinancing."

  5. Fannie Mae. “Loan-Level Price Adjustment Matrix,” Page 2.

Part of the Series
Refinance a Home
Know the Basics
  1. Refinance Your Home
  2. Cash-Out vs. Rate-and-Term
  3. Rate-and-Term Refinance
  4. Cash-Out Refinance
  5. No-Appraisal Refinance
    CURRENT ARTICLE
Effects on Financial Status
  1. Before You Refinance
  2. Refinancing and Your Net Worth
  3. Refinancing and Your FICO Score
When to Refinance
  1. The Best Time to Refinance
  2. Is Refinancing a Good Idea?
  3. Refinancing and Interest Rates
  4. Bad Reasons to Refinance
How to Refinance
  1. Home Appraisals
  2. Picking the Right Lender
  3. Best Mortgage Refinance Companies