Connecticut Avenue Securities Investor Presentation

Appraisal Waiver As part of Fannie Mae's commitment to simplify the complexity of mortgage origination by creating efficiencies and delivering innovations that improve the loan manufacturing process, we updated our appraisal waiver offering, formerly known as Property Inspection Waiver, by integrating Desktop Underwriter (DU) and Collateral Underwriter (CU). By using CU's industry-leading analytics, we can offer appraisal waivers for certain lower-risk eligible loans. Step One Step Two Step Three Step Four DU File Submission DU Eligibility Exclusion Checks CU Eligibility Exclusion Checks Appraisal Waiver Offered Subject property generally has a prior appraisal that was analyzed by CU. ☐ ■ CU will evaluate the prior appraisal for overvaluation or property eligibility issues. If any of these issues exist, an appraisal waiver will not be granted. CU will use the prior appraised value along with Fannie Mae's Home Price Index to assess the reasonableness of the estimated property value provided by the lender in DU. If estimated property value is reasonably supported, the loan may be eligible for a waiver, subject to additional eligibility requirements. The majority of transactions will continue to require an appraisal. Fannie Mae has offered appraisal waivers for many years, and we have observed no material differences in performance for loans with the waiver versus comparable risk loans that obtained an appraisal. ■ Waiver rates have been included on CAS deal files as a loan-level field since October 2017. In March 2020, Fannie Mae enhanced its Uniform Mortgage Backed Securities (UMBS) and Mortgage-Backed Securities (MBS) disclosures to include a new attribute, "Property Valuation Method," which indicates the method by which the value of the subject mortgaged property was obtained, including appraisal waivers. The new attribute applied to all Fannie Mae single-family securities - both fixed- rated and adjustable-rate – with issue dates on or after January 1, 2017. This enhancement is for active loans only and not loans that were previously paid off or liquidated for other reasons. 83 © 2021 Fannie Mae. CAS deal files include a loan-level waiver identifier

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