Big Appraisal Changes Coming: What Realtors® Need to Know

Big changes are coming to the appraisal process, which Fannie Mae and Freddie Mac call “Appraisal Modernization.” In yesterday’s PAR monthly webinar, Michelle Czekalski Bradley, a real estate broker, certified general appraiser and USPAP instructor, told Realtors® what to expect from these upcoming changes. 

What changes are coming and why do they matter? 

“Since 2018, Fannie Mae and Freddie Mac have been working to completely redesign how appraisals are reported. The goal is to move away from the traditional appraisal forms we’ve all used for 20 years and replace them with a single, data-driven, flexible report that adapts to any residential property type,” Czekalski Bradley explained. 

“Appraisers will be entering structured data that adjusts automatically depending on the type of property – for example, a condo, site-built or manufactured home.” 

“The idea is to make appraisals more transparent and aligned with how today’s mortgage systems handle data,” she added. 

In her explanation, she emphasized that this will be a major shift for appraisers that requires a high level of detail, new data fields and technology. There are some concerns from appraisers about the learning curve. 

“Yes, it’s an exciting modernization effort,” she said. “But it also comes with real growing pains that the entire profession, from appraisers to lenders to agents, will feel as we make the transition.” 

What’s the timeline for the rollout of these changes? 

The changes are planned to roll out in phases. Czekalski Bradley outlined the following timeline: 

1. Limited production period. This phase began last month and is intended to test and fine-tune. However, there currently aren’t any appraisal software programs that are fully up and running. 
2. Broad production. This phase will start in January 2026, when any lender can use either the current appraisal format or the new one. From this point through next summer, appraisers are expected to start getting lender requests for the new process. This when everyone involved will feel the learning curve, as appraisers and lenders will be adapting to the new process. 
3. Required implementation. Starting on Nov. 2, 2026, all new appraisal reports delivered to Fannie Mae and Freddie Mac must use the new UAD 3.6 format. All old reports will phase out completely for secondary market loans. 

What can agents expect in the months ahead? 

“In the coming months, agents should expect to notice changes that start right at the appraisal appointment itself,” Czekalski Bradley said. “Because of UAD 3.6, appraisers will be collecting a much greater level of detail, both in terms of data and photographs. That means we’ll be spending more time at the property capturing new data points.” 

“This is actually where agents can make a huge difference. Agents can really help facilitate this process by providing detailed information about any modifications made to the home, especially the kitchens and bathrooms.” 

She added that having details like when improvements were made and what materials were used will make the process more efficient for everyone involved. 

“This is all part of that learning curve I’ve been mentioning. As appraisers adapt to the new technology and reporting structure, appointments and report delivery times may take longer at first. But it will all work out – give it a year or so!”  

What are some of the added requirements that appraisers must report? 

“Under the new reporting structure, appraisers will be required to capture even more detail,” Czekalski Bradley noted. Some of these details include: 

• The distance from the front door threshold to the ground 
• Kitchen and bathroom updates 
• Broadband internet availability 
• Difference in the way a “structure” on the property is reported 
• Energy efficiency building certifications and green features 
• Disclosure of construction type 
• More robust reporting of HBU analysis and zoning issues 
• New reporting for private waterfrontage property, such as access depth 
• Separate condition and quality ratings for the interior and exterior 
• Rating of converted areas compared to the rest of the home 

Above all, what should be known about these changes? 

“What hasn’t been said enough is that this really is a turning point for the valuation side of our profession,” said Czekalski Bradley. “This has been building for years, fueled by technology, but this is the moment where it’s actually happening. It’s exciting, but it’s also uncomfortable. Change creates uncertainty and resistance, but that’s okay.” 

“What’s most important now is that everyone – appraisers, agents and lenders – stays engaged in the process,” she emphasized. “Stay informed, stay connected and don’t underestimate how much this will reshape the way we all do business.” 

For more about appraisal changes… 

To learn more about the upcoming changes, including specifics on reporting, the effects on the mortgage industry and consumers, and expected challenges and concerns, view the webinar recording on PAR’s website.