UAD 3.6, a sweeping overhaul of how residential appraisals are reported to Fannie Mae and Freddie Mac, becomes available to all lenders on Jan. 26. The rollout comes even as many lenders are still sorting out what the change will mean for their appraisal workflows, systems and timelines.

The new standard replaces UAD 2.6 and eliminates long-standing forms such as the Fannie Mae 1004, shifting the industry to a fully data-driven Uniform Residential Appraisal Report. UAD 3.6 was developed by the Mortgage Industry Maintenance Standards Organization and will ultimately be adopted not only by the government-sponsored enterprises, but also by the Federal Housing Administration and the Department of Veterans Affairs on their own schedules.

For lenders, the immediate question is less about whether to adopt and more about when and how.

From limited testing to broad availability

A limited production phase for UAD 3.6 recently wrapped up, giving the GSEs some live appraisal submissions, though likely fewer than they had hoped, said Elizabeth Green, chair of the MISMO Property and Valuation Services Community of Practice.

Now, any lender selling loans to Fannie Mae or Freddie Mac can begin submitting UAD 3.6 appraisals.

Software readiness is no longer the main constraint. Major appraisal platforms, including Cotality through its a la mode technology, now support submission of the UAD 3.6 URAR. A la mode is used by a majority of U.S. appraisers.

"Think of it as the new one-size-fits-all URAR, because it is going to be data-driven," said Green, who is also senior vice president of valuation solutions at Servicelink.

Large lenders, she said, tend to be furthest along because they have had to assess system impacts early. Mid-size and smaller lenders are generally taking a more cautious approach.

"They're not jumping out to be first on Monday to submit a file," Green said.

One common concern is what happens to loans already in process if an appraisal submitted under UAD 3.6 takes longer than expected. Servicelink is handling that risk on a best-efforts basis, and Green said those fears tend to ease once lenders have a few completed files under their belts.

Vendor readiness and early adopters

Appraisal technology providers say they are seeing a mix of urgency and hesitation across their client bases.

"There's a lot of excitement in the appraisal community to learn about UAD 3.6 and move forward," said Shawn Telford, chief appraiser and valuation officer at Cotality. "We're ready now, and our appraisers are fully capable of supporting clients that want to start submitting UAD 3.6 files."

Some lenders that skipped the limited production phase are prepared to begin submitting appraisals as soon as the platform opens broadly, said Tony Pistilli, president of valuations at Restb.ai.

Others have taken a "let's not be in the market first" approach, but Pistilli said that mindset is starting to shift as deadlines approach.

"November is going to be here sooner than we think," he said. "There's a growing sense of immediacy to get things done."

Why process alignment matters

Pistilli likened UAD 3.6 adoption to a string of Christmas lights: if one bulb is out, the whole strand fails. The same is true, he said, if lenders, appraisers, AMCs and technology providers are not aligned.

To address that risk, Restb.ai recently introduced a new API, called Future UAD, that uses artificial intelligence to extract property details such as features, condition and damage directly from appraisal photos. Those data points can then populate the new URAR.

The technology is designed to reduce the burden on appraisers as they move from a relatively simple four-page form to a report structure that can run closer to 30 pages.

"It's like the difference between a Chevrolet and a Mercedes," Pistilli said. "So just a totally different structure, a different look, a different feel, and without technology, I think it's going to be very cumbersome for appraisers to complete this new appraisal in a timely manner."

Cotality's approach to adoption

Cotality and its a la mode platform completed formal verification of their UAD 3.6 capabilities with Fannie Mae and Freddie Mac in December.

The company adapted its existing Total platform to meet the new requirements, adding tools that give appraisers more control over their reports, along with built-in errors and omissions checks.

Clients are moving at different speeds, Telford said. Some are ready to adopt now, while others plan to phase in UAD 3.6 over the next nine months, leading up to when use of the standard becomes mandatory for conforming loan submissions.

Cotality has been collecting feedback from beta users for more than a year and from appraisers since releasing a learning edition of the software in September.

"We've been through dozens upon dozens of iterations," Telford said. "The industry has never been through anything this big and this comprehensive."

Helping users navigate the new form

Beyond core appraisal software, vendors are also building tools to help lenders and appraisers understand the new reporting structure.

Servicelink is partnering with Grid-ML to launch a UAD 3.6 Interactive Reference Guide. It follows the same format as for the loan estimate and the closing disclosure. The guide allows users to click through the new form and see definitions, instructions and usage guidance in context, similar to tools created for the loan estimate and closing disclosure, also referred to as the TRID disclosures. 

"We are not changing appraisal science," Green said. "We're just changing the reporting of an appraisal."

For lenders weighing when to move, that distinction may matter. The work itself remains familiar, but the way it is captured, validated and delivered is fundamentally different.