Appraiser Update
Welcome to our Q3 2025 Fannie Mae Appraiser Update. The Greek philosopher Heraclitus is credited with saying that the only constant is change. In this edition, we share information and resources to help you navigate recently announced changes.
Perhaps the most significant appraisal policy change in recent memory is the launch of the new Uniform Appraisal Dataset (UAD) 3.6. In this edition we continue to unpack UAD 3.6 changes including the Update Report, the Completion Report, new definitions for Condition and Quality ratings, and new sections for disaster mitigation and energy efficiency. Another change is discontinuation of our requirement to inspect comparable sales from the exterior, which will save appraisers some driving time.
To help with UAD 3.6 implementation, we have created a tool for appraisers to check their reports for UAD 3.6 compliance.
We also review recent Selling Guide changes related to reconsideration of value (ROV). Speaking of the Selling Guide, we provide some tips on how to make the most of this important resource for appraisers and we highlight changes to our ANSI fact sheet.
We hope you find the Appraiser Update to be a useful reference. Please let us know what topics you want to see in the future.
Collateral Policy Team
Restricted Appraisal Update and Completion Reports
The legacy Fannie Mae Form 1004 is used both to update the original appraisal and to verify completion of any improvements required by the original appraisal. In UAD 3.6, these two functions are split and the 1004D is replaced by two separate reports, the Restricted Appraisal Update Report (Update Report) and the Completion Report.
Restricted Appraisal Update Report
Appraisers will recognize much of the content and policy related to the Update Report. Similar to the 1004D, we require lenders to obtain it when the original appraisal is more than four months and less than 12 months old as of the date of the note and the mortgage. The Update Report incorporates the original appraisal by reference. The appraiser is required to indicate (yes or no) whether the value has decreased since the effective date of the original appraisal, and if the value has decreased, the lender is required to obtain a new appraisal. For the Update Report, the lender is required to use the same appraiser that performed the original appraisal, but when that is impossible, the lender can assign it to a different appraiser (the lender must explain why in the loan file).
Although UAD 3.6 facilitates reporting of various scopes of inspection (interior and exterior, exterior only, or no inspection), Fannie Mae continues to require the appraiser at a minimum to inspect the subject exterior when performing the update (see Fannie Mae Selling Guide Supplement: Uniform Appraisal Dataset (UAD) 3.6 Policy, SB4-1.2-04). The appraiser is also required to provide a front photo of the subject.
The Update Report has some enhancements over the 1004D including greater clarity around significant assistance, the identification of counterparties such as the AMC, and disclosure of prior services. When the appraiser performing the Update Report is the same as the appraiser who performed the original appraisal, then that original appraisal must be disclosed as a prior service.
The designation of the Update Report as a Restricted Appraisal Report (with reference to the original report) allows the appraiser brevity in stating facts and findings, but the appraiser’s work file still needs to capture enough information to produce an Appraisal Report (e.g., develop and support the opinion of value).
Completion Report
The Completion Report contains three new sections (relative to the 1004D):
- Itemized List of Repairs displays the individual repairs required in the original appraisal. This section displays conditionally: if the original appraisal did not require any repairs, the section does not display in the report. The appraiser is required to provide the current status and photo for each repair item on the list.
- New Observed Items for Repair lists any additional repair items observed during the completion inspection, again conditionally. The appraiser provides a photo of each new item along with the feature, location, description, impact on soundness or structural integrity, and recommended action.
- Completion Status for appraisals Subject to Completion Per Plans. The appraiser reports whether the construction is complete. If complete, the appraiser is asked to state whether the construction is consistent with the original plans/specs. If not consistent, the appraiser lists the differences and states whether they are superior, similar, or inferior to the original.
The Completion Report allows for virtual inspections. The Selling Guide supplement says “If the appraiser does not perform an on-site inspection, they can use alternative methods to confirm the completion, such as digital photos, site videos, or other technological solutions. All completion documentation must include one or more visually verifiable exhibits.”
Like the Update Report, the Completion Report must be done by the original appraiser if possible.
Both reports must be submitted to UCDP by the lender or its authorized agent.
Additional resources on the UAD web page
The UAD 3.6 Documentation section has three tabs that contain appendices specific to each report (URAR, Update Report, and Completion Report). Appendices on each tab are numbered to indicate which report the appendix relates to. For example, Appendix C-1: URAR Layout is on the URAR tab, Appendix C-2 Restricted Appraisal Update Report Layout is on the Update Report tab, and Appendix C-3 Completion Report Layout is on the Completion Report tab.
NOTE: The appendices most beneficial to appraisers are C (Layout), D (Sample Report) and F (Reference Guide). Our Q2 Appraiser Update highlighted Appendix F-1: URAR Reference Guide as a resource for appraisers learning UAD 3.6.
Comp driveby not required for UAD 3.6
The Scope of Work for the legacy version of the Uniform Residential Appraisal Report (URAR) states “The appraiser must … (3) inspect each of the comparable sales from at least the street …”. The legacy URAR instructions repeat the requirement for the appraiser to drive to and personally view the exterior of the comps with the additional stipulation that photographs of the front of each comparable sale are required exhibits. We have often been asked, in view of the abundance of remote viewing technology available today, why do we still require appraisers to physically visit each comparable? The short (but not very satisfying) answer has been that it is difficult to change the URAR.
The creation of UAD 3.6 has allowed us to revisit this requirement. While we will still require “Clear, descriptive color photographs … of the … front of each comparable” [see Exhibits for the Uniform Residential Appraisal Report section in the Fannie Mae Selling Guide Supplement: Uniform Appraisal Dataset (UAD) 3.6 Policy], for appraisal reports in UAD 3.6 we have retired the requirement to inspect the comparable sales from the street.
Here is what the new Scope of Work for UAD 3.6 says: “The appraiser must, at a minimum: … (2) research, verify, and analyze adequate and reliable data … for each comparable property reported …”. This means appraisers will be at liberty to source the required comparable photos at their own discretion.
UAD 3.6 compliance checker
Do you remember when your teacher would tell you “always check your work” before turning it in? UAD 3.6 brings appraisers a way to do just that.
Appraisers can check their UAD 3.6 appraisal reports for compliance with the UAD standard by using the UAD compliance application programming interface (API). The compliance API should be built into appraiser desktop software for UAD 3.6 versions. The API evaluates the appraisal report for compliance with the UAD Delivery Specification. It checks for data completeness, validity (format and data type), and reasonableness, and returns messages that describe any issues found. It makes it easy for you to verify that your appraisal reports are compliant with UAD 3.6, giving you peace of mind, especially while learning the new standard.
NOTE: The API is only focused on data compliance; it does not include Collateral Underwriter® scores, flags, or messages related to property observations or value support. The Compliance API Fact Sheet covers how the API works.
Compliance Rules Resources
- Appendix H-1: UAD Compliance Rules-URAR
- Appendix H-2: UAD Compliance Rules – Restricted Appraisal Update Report
- Appendix H-3: UAD Compliance Rules – Completion Report
Reach out to your software provider or us for assistance.
Reconsideration of Value changes
In our September Selling Guide update, we made two changes to our Reconsideration of Value (ROV) policy:
Removed the requirement for the lender to provide an initial ROV disclosure to the borrower at the time of the loan application. Going forward, the only required borrower disclosure is when the lender delivers the appraisal report to the borrower.
Simplified the loan file documentation requirements. The new documentation requirement is for the lender to “ensure documentation related to the outcome of the ROV is retained in the loan file.”
Stay up-to-date on Selling Guide changes
One of the many the challenges facing appraisers is how to know when Fannie Mae changes our appraisal policies. Each time we make a policy change, we publish an updated version of the Selling Guide with all the changes highlighted in yellow. The Selling Guide is available in two formats:
1 - As a web page
Use the “Search the Guide” field and the Table of Contents to navigate the online version of the Selling Guide.
2 - As a PDF
The PDF version includes hot links to Selling Guide sections. Use CTRL+F to search for a key word.
Pro tip: downloading the latest Selling Guide version to your device means you can always consult it, even when working offline. The Selling Guide is typically updated on the first Wednesday of the month.
For additional tips on finding resources and answers, check out the Find Fannie Mae Answers Fast article in the Q4 2023 Appraiser Update.
ANSI Reminder
Following our June 2025 Selling Guide policy changes related to the ANSI® Z765-2021 standard, we have published an update to our Standardized Property Measuring Guidelines Fact Sheet and FAQ. Policy changes include retirement of our ANSI exception code, alignment of terminology, and requirement to report dimensions in tenths of a foot (rather than inches).
Coming soon: Update on Manufactured Housing
The manufactured home industry is experiencing change. For example, HUD published new “Manufactured Home Construction and Safety Standards” in 2024, effective Sept. 15, 2025. Fannie Mae also has made several recent changes to our manufactured home policies. Our fourth quarter 2025 Appraiser Update will unpack the changes and provide useful guidance for appraising manufactured homes.
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