American valuation society

There is a tectonic shift that’s taking place in the appraisal space right now - and it promises to reverberate through every nook and cranny of the lending world. Mortgage brokers, direct lenders, independent mortgage bankers, banks, credit unions, investors, underwriters, reviewers, state review boards (and their investigators), amcs, appraisal educators, plus technology and software providers are all impacted in substantive ways.

 

On November 2nd of 2026, all appraisals, to be eligible for sale to Fannie and Freddie must be submitted in UAD (Uniform Appraisal Dataset) 3.6 format. (While both FHA and VA have indicated they will ‘support’ UAD 3.6, they have not stated they will uniformly adopt all the changes nor will November 2nd necessarily be their trigger date). UAD 3.6 is a designation that, essentially, re-defines the data collection process and the reporting format. What it does NOT do is change the appraiser’s responsibility to analyze the data and develop their opinion of value. What it will do is expand the tools an appraiser will have at their disposal and the opportunities to participate in additional assignments (property data collection, hybrid reports, etc.)  

 

Some quick history. Some 8 or so years ago, an initiative to develop an enhanced data collection process mixed with more sophisticated technology (some of which didn’t exactly exist at the time) was begun under the auspices of Fannie Mae and Freddie Mac.  This represented the root system for the vision of modernizing the appraisal process.  Remember, Fannie and Freddie don’t make loans, they buy them so they are better able to identify and reduce risk in collateral lending. 

 

• UAD 3.6 represents the transition to an overall framework for residential appraising. One report format, uniform in structure and connected by context. A huge plus for lenders, reviewers, and consumers to know where to look for information on a property.
• Hollywood would say: “One Ring to rule them all, One Ring to find them, One Ring to bring them all, and in the darkness, bind them...”
• The promise is that clarity, efficiency, and a true focus on discrete data (this type of data is often used in real estate and property appraisal to quantify specific characteristics or features that can be counted) can provide a shield against potential bias for those who can master the new incantations … and perhaps even a spell to reduce liability for appraisers and lenders alike.
•  The expectation is a faster process, a conquering of the grail quest to reach interoperability (the ability of products or systems to work (i.e., communicate) with each other.
• Given that current level of knowledge, experience, and resources vary greatly between the various participants in lending (i.e., large banking institutions, small banks and credits unions, large independent mortgage bankers, smaller IMB’s down to mortgage brokers who constitute a significant portion of today’s loan volume), the educational training component of understanding and adapting to the new tech solutions will be an unavoidable burden. But this new format will improve the ability to read and understand the appraisal.  
• The need to invest in new technology like enhanced mobile property data collection apps that can capture 1200-1500 (or more) data points versus a typical 250 – 300 that appraisers historically have collected in their inspections, computer vision tools that can support – or reveal – data that has never been available until now are just two examples
• The ability of the appraiser to analyze from competing market areas, and not just limited to a ‘neighborhood’ (now an outdated term by the way), by defining and describing the subject property and having technology provide a deeper bucket of data strengthens a lender’s decision to lend and a consumers commitment to invest.
• The belief is that this will also reduce the number of revision requests from lenders, improve the underwriters confidence in decisioning, and provide consumers a document bereft of acronyms and other ‘secret language’ that we all tend to employ in our respect fields to appear powerful and special.
• This is … a gargantuan task. Evolutionary really. Appraisers must accept and digest the changes - and our technology wizards must design tools specific for each stakeholder (at no small expense in cost and resources).

 

I’ve spoken with many appraisers … and more than a few Chief Appraisers I know and respect … about the challenges our industry faces. They (collectively) feel that the rumor of the demise of the appraisal profession is … premature. While there is without a doubt concern, resistance, and for some, outright rejection of these changes that come with UAD 3.6, appraisers and appraising will endure. Why? Because appraisers excel at analysis – and they will see the opportunities in front of them.  They will rise to the occasion and see technology as an aide, not an enemy. Much the same as lenders will do by embracing technology to become more efficient, as their loan originators will do by evolving their skill set and unique abilities to continue to enjoy trust with their customers. My experience and belief is that the human condition is still not replicable and in an even higher demand.

 

Change is many things to us all, but in the end, it is (unlike Thanos) … inevitable. I’m reminded of the line in that song The Eye by Brandi Carlile; “You can dance in a hurricane, but only if you’re standing in the eye”.  We all need to find the eye.

 

Here are those links I spoke of. Happy reading.

 

https://sf.freddiemac.com/docs/pdf/announcement_uad_january-2026.pdf

https://singlefamily.fanniemae.com/delivering/uniform-mortgage-data-program/uniform-appraisal-dataset

https://sf.freddiemac.com/tools-learning/uniform-mortgage-data-program/uad

I was thinking about how often market participants ask really fair questions—questions any reasonable person would ask—and then feel blindsided when the answer from an appraiser isn’t a clean yes/no.

“Will it appraise?”
“Can you just use this comp?”
“How much will the upgrades add?”
“Why isn’t it matching the list price?”

And the honest answer is often… it depends.

Not because we’re trying to be vague. But because appraisal answers are assignment-specific—they’re tied to a defined scope, a specific set of facts, and market evidence. A small detail can change the competitive set, the comps, the adjustments, and ultimately the conclusion.

Here’s what “it depends” usually means in plain English:

It depends on the assignment and the date.
Value isn’t a permanent number. The effective date matters. The intended use matters. The question has to be answered inside that framework.

It depends on what the market is actually paying for—not what we hope it’s worth.
Appraisers don’t create value; we’re translating buyer behavior into a supportable conclusion. If buyers in that segment aren’t paying extra for a feature at a certain price point, the data usually won’t support it either.

It depends on whether a comp is truly comparable.
“Close by” and “sold recently” are great starting points, but similarity is the real driver—condition, quality, functional utility, location influences, concessions, and what the property actually competes with.

It depends on the details that don’t show up in a quick glance.

Remodel quality, non-typical layouts, backing/traffic, view, solar terms, HOA restrictions, conversion of space, documentation/permits if available, and even what the neighborhood considers “standard.” Those things can move the needle.

If you’re an agent or builder and you want fewer surprises, here’s what helps the most:
Send the info that explains the property the way a buyer experiences it—upgrade list with dates, contract terms and concessions, documentation if available, and the “why” behind the price (multiple offers, scarcity, premium lot, etc.).

Most of the time, “it depends” isn’t the end of the conversation—it’s the beginning of the right conversation.

What’s a question you’ve asked (or been asked) in a deal where “it depends” would’ve been a helpful expectation setter upfront?

Imagine standing before a beautifully decorated Christmas tree, ready to flip the switch. You plug in the lights and nothing happens. You check the plug, the length of the wire and each bulb, one at a time, until you find that one tiny bulb somewhere along the strand is broken or loose, and its causing the entire string of lights from working.  

Similarly, in complex systems, the weakest link often determines how well the system functions or whether the system functions at all. The upcoming mandate for the Uniform Appraisal Dataset 3.6 (UAD 3.6) and the redesigned Uniform Residential Appraisal Report (URAR) is such a system. If any single stakeholder in the mortgage/valuation chain fails to support the standard, the entire “string” of appraisal-to-loan delivery can go dark. 

That’s why appraisal software, appraisers, appraisal management companies, lenders and even the GSEs, must all be certified and/or ready to go for UAD 3.6 to work as intended. 

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