Understanding the Shift: From UAD 2.6 to UAD 3.6 in Residential Appraisal

Another article was just published by Daniel Yoder on our website! This one explores the shift from UAD 2.6 to UAD 3.6 for residential appraisers. This change involves more than new regulations; it signifies a move towards a more data-centric appraisal reporting system.

Reflecting on UAD 2.6

For years, UAD 2.6 served as the standard dataset for appraisal reports sent to the GSEs (Fannie Mae/Freddie Mac). Its main goal was enhancing data quality and consistency for loans they acquired. Key aspects included:

• Standardizing a subset of fields on primary appraisal forms (1004, 1073, etc.).
• Requiring specific formats for data points like dates, values, and property ratings (Condition/Quality).
• Being based on the outdated MISMO® 2.6 schema.
• Mandating electronic submission via UCDP®.

However, feedback highlighted limitations: persistent data standardization problems, insufficient data collection, rigid forms, and difficulty capturing details of varied properties.

Why the Change to UAD 3.6?

The creation of UAD 3.6 and the redesigned Uniform Residential Appraisal Report (URAR) directly addresses these shortcomings and the mortgage industry's evolving needs. The dataset hadn't seen major updates since 2010. Key motivations include:

1. Modernization: Bringing appraisal data inline with current tech and digital mortgage processes.
2. MISMO Alignment: Moving to a supported MISMO Reference Model (v3.x) for better data exchange.
3. Form Consolidation: Replacing numerous static forms with one dynamic URAR.
4. Enhanced Flexibility: Better accommodating all residential property types, including unique ones.

UAD 2.6 vs. UAD 3.6: Core Differences

This transition fundamentally alters appraisal data structure and reporting:

• Scope: UAD 2.6 standardized some fields on specific forms. UAD 3.6 covers all GSE-eligible properties via a single, dynamic URAR. Report structure follows key property traits, not form numbers.
• Format: UAD 2.6 used static forms. UAD 3.6 employs a dynamic structure, showing only relevant fields based on the property/assignment.
• Data Structure: UAD 3.6 prioritizes discrete, machine-readable data over free-form text, aiming for improved consistency.
• Efficiency: UAD 3.6's structure supports automation, potentially streamlining reviews and reducing revisions, aided by tools like the UAD Compliance API mentioned in GSE readiness kits like https://sf.freddiemac.com/docs/pdf/uad-lender-readiness-kit.pdf.

Context: UAD 3.6 and the Proposed UPD

UAD 3.6 sets the reporting standard (final URAR structure), while the proposed Uniform Property Dataset (UPD) focuses on the data collection standard, especially for desktop/hybrid appraisals. Together, they aim for end-to-end valuation standardization.

This move towards structured data complements technologies like LiDAR scanning and AI for automated measurements, which can help capture the discrete data points required by these new standards.

Moving Forward

The shift from UAD 2.6 to UAD 3.6 emphasizes structured data capture over form-filling, targeting greater consistency and efficiency. As we near implementation milestones like the Limited Production Period (LPP) starting September 8, 2025 (learn more at https://www.valuemate.ai/blog/understanding-the-uad-36-limited-production-period-lpp), staying informed is vital.

Read the full analysis and prepare for the UAD 3.6 transition here: https://www.valuemate.ai/blog/understanding-the-shift-from-uad-26-to-uad-36-in-residential-appraisal