Lenders cannot relax even with the government-sponsored enterprises issuing what they termed a "temporary policy exception for sellers unable to meet UAD 3.6 mandate."

This extension "is not an indication to pause efforts to complete the UAD 3.6 transition, said Elizabeth Green, the senior vice president of valuations at ServiceLink. "Sellers taking this exception option may experience a larger impact overall, both for their own internal processes as well as appraiser readiness, which could lead to further varying costs."

Green, who is the chair of the Mortgage Industry Standards Maintenance Organization's Property and Valuation Services Community of Practice warned the dates for 3.6 submissions remain intact.

The exemption is to last until May 19, but getting one is not automatic, a joint memo from Fannie Mae and Freddie Mac said. Green added "This is a contractual arrangement and, if approved, requires the seller must follow the exception timeline accordingly."

To which Eric Tsai, CEO of Asteroom added, "The executives that execute these policy exception agreements will want to know that their organization can meet the terms."

An option is available, Tsai noted. "Lenders are directing loan officers and production teams to accept offers for appraisal alternatives like inspection-based appraisal waivers and hybrid appraisals whenever they are offered."

The request must be applied for, the lender has to acknowledge they cannot meet the UAD 3.6 mandate and must agree to be subject to revised contractual terms, the GSEs added. The memo has links to separate forms from each company to request the exception.

UAD is short for Uniform Appraisal Dataset; any appraisals are to be submitted via the Uniform Collateral Data Portal or UCDP. The 3.6 standard includes the new Uniform Residential Appraisal Report, URAR, which replaces the old form commonly known as the Fannie Mae 1004. Changes from Fannie Mae earlier this month also involved reporting of rental income.

People involved in the process of adopting UAD 3.6 warned the industry as far back as August 2025 they needed to prepare then for this November's deadline.

In a statement, the Mortgage Bankers Association thanked Federal Housing Finance Agency Director Bill Pulte, as well as the government-sponsored enterprises for the temporary exemption to the mandate.

This "will give lenders and appraisers additional time to prepare for this significant change and help avoid unnecessary disruptions, longer wait times, or higher costs for borrowers," Bob Broeksmit, MBA president and CEO, said in the statement.

"MBA has had extensive engagement with GSE leadership on the importance of a smooth implementation, and we appreciate their responsiveness to feedback from our members."

Under the original timeline, lenders who sell to Fannie Mae and Freddie Mac are required to use the UAD 3.6 standard exclusively starting with submissions on or after Nov. 2. Until then they were free to use valuations in either UAD 2.6 (the current forms such as the Fannie Mae 1004) or the newer standard.

The joint letter from the GSEs declared the Nov. 2 requirement for compliance has not changed. This new standard has been available for industry use since January, but few lenders were ready.

"A Seller that has not fully transitioned to UAD 3.6 by the mandate will not be compliant with the Guides, unless they obtain a policy exception," the letter said. "The policy exception grants a Seller the ability to continue using UAD 2.6 for a temporary time period and requires them to execute on their agreed-upon implementation plan with each applicable GSE."

However, property valuation technology company Clear Capital has already done more than 1,900 UAD 3.6 appraisals across a wide range of property types and markets, said Dan McAlister, its vice president of product.

"The progress the industry has made on UAD 3.6 over the last six months is remarkable, and it's a credit to Fannie Mae and Freddie Mac and to the appraisal management companies, lenders, appraisers and technology providers who have put in the hard work to get ready for Nov. 2. McAlister said. 

Clear Capita has partnered with appraisal software providers to find and fix technical issues quickly. "We've worked alongside appraisers as they learned a new way of reporting while keeping up with their daily volume," he continued. "And we've worked with lenders to agree on clear quality expectations for UAD 3.6 reports". 

The policy exception gives those lenders who need it "real breathing room," while still holding them to getting into compliance as soon as possible, McAlister said.

"Most importantly, it lowers the risk of disruption to loan pipelines heading into the end of the year, so borrowers aren't the ones who pay for adoption challenges," he declared. "For lenders who are ready, our advice is to keep moving forward on Nov. 2." 

Global DMS President and CEO Vladimir Bien-Aime said this flexibility from the GSEs will help to reduce bottlenecks in getting valuations into the system to avoid any delay in closings resulting from the change.

"For lenders that obtain the exception, the additional time provides an opportunity to align systems, validate integrations, train staff, and coordinate with their appraisal partners," he said. "Readiness is not simply about whether one platform is prepared; it is about whether the entire workflow functions reliably, from order placement through appraisal delivery."

He too warned this opportunity should be viewed as giving time to complete the transition, and not a reason for lenders to put it on hold. "The goal is to modernize the appraisal process without disrupting mortgage lending or the borrower's experience," Bien-Aime said.

Only the actual seller to a GSE must request the policy exception, the memo said. Originators who do not have a direct relationship with Fannie Mae and/or Freddie Mac, are not required to have an exemption, but they must align with their investors when it comes to implementing UAD 3.6.

On the other side of the scale, "If your company is an aggregator that buys loans from other lenders – third-party originators (TPOs) – and sells those loans to the GSEs, you must ensure that all of your TPOs are submitting UAD 3.6 appraisals, or you must request the policy exception," the memo said.

ServiceLink's approach has always focused on supporting both 2.6 and 3.6 options simultaneously in our platform," Green said. Our team is ready, integration partners tested, and our appraiser partners hit 3.6 nationwide coverage in August." 

The Federal Housing Administration is also adopting the use of the UAD 3.6 standard, but has yet to set a date for mandatory implementation. The Department of Veterans Affairs is also expected to use the forms and format.

"The UAD 3.6 significantly improves the appraisal product by ensuring greater consistency and better readability," the MBA's Broeksmit said. "We will continue working closely with the GSEs, FHFA, and our members in the months ahead to support a successful transition to UAD 3.6."