I'm looking at pulling cash out of my condo, maybe $40k, and my loan officer mentioned something about a waiver being possible depending on LTV. I'm at roughly 58% LTV right now so I figured I'd qualify, but I don't actually know what determines whether the waiver gets offered or if I have to pay for a full appraisal anyway.
Fannie and Freddie run the property data through their models and either kick out a waiver offer or they don't, the lender doesn't really control it, they just pass along whatever the GSE decides. Cash-out refis get scrutinized harder than rate-and-term, so waivers are less common even at conservative LTVs, and condos add another wrinkle because the project itself has to be approved, not just the unit. I've seen clean 55% LTV cash-out requests on condos get denied a waiver purely because the complex had high investor concentration or pending litigation. The thing I'd want to know before assuming you're in the clear: has your HOA had any special assessments, insurance lapses, or legal action in the last 24 months, because that can blow up the project approval even if your personal numbers look perfect.
On a cash-out refi the waiver bar is harder to clear than on a rate-term. Fannie caps cash-out PIW at 70% LTV for single-family but condos get extra scrutiny because the project itself has to be in their database with enough comparable sales. If your condo complex is small or had any HOA issues flagged, the AUS might just kick it out regardless of your 58%.
Worth asking your LO to run it through DU first before you pay anything, takes about ten minutes and you'll know immediately.
Condos specifically are one of the property types where the waiver engine gets twitchy, and I have seen borrowers in the low-to-mid 50s LTV still get sent to a full appraisal on cash-out because something in the project data flagged. HOA approval status, litigation history on the building, even a thin comparable sale pool in the complex can knock it out. Your loan officer can run DU or LP before you order anything, and that tells you in minutes whether a waiver is even possible on this file. If it comes back requiring a full appraisal, budget closer to $550 to $700 for a condo in most markets because the appraiser has to pull project documents on top of the standard comp work, and turnaround runs longer than on a single family.
