As a real property appraiser, you rely on appraisal reports to communicate your opinion of value. One of the most important principles in USPAP is also one of the most misunderstood: forms are not reports.
Filling out a form properly and completely does not automatically mean your report is USPAP-compliant. The content of the appraisal report, not its form or format, determines compliance.
That distinction has never mattered more than it does right now.
The residential appraisal industry is in the midst of its most significant reporting transformation in over a decade. The transition to Uniform Appraisal Dataset (UAD) 3.6 and the redesigned Uniform Residential Appraisal Report (URAR) is well underway, with a mandatory compliance deadline of November 2, 2026 for all appraisals submitted to Fannie Mae and Freddie Mac.
The static forms appraisers have relied on for decades, including the 1004, 1073, 1025, and 2055, are being retired and replaced by a single, dynamic, data-driven reporting structure.
This shift does not change the three foundational requirements of USPAP Standards Rule 2-1. But it does change how you meet them. Understanding that distinction is critical to your compliance and your credibility in the new reporting environment.
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What Are the Three Basic Requirements for an Appraisal Report?
USPAP Standards Rule (SR) 2-1 provides three basic, foundational requirements for real property appraisal reporting. These requirements apply regardless of which reporting format or technology you are using:
“Each written or oral real property appraisal report must:
(a) clearly and accurately set forth the appraisal in a manner that will not be misleading;
(b) contain sufficient information to enable the intended users of the appraisal to understand the report properly; and
(c) clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.”
These three requirements form the ethical and legal backbone of every appraisal report you produce. UAD 3.6 does not alter them. What it does alter, significantly, is the mechanism through which you demonstrate compliance. Let’s examine each requirement in the context of the new reporting standard.
Standards Rule 2-1(a): Clearly, Accurately, and Not Misleading
SR 2-1(a) builds on the ETHICS RULE requirement that your appraisal reports must not be misleading. You satisfy this requirement by making sure you “clearly and accurately set forth the appraisal.”
As the saying goes, you must tell the truth, the whole truth, and nothing but the truth.
Under the legacy form-based system, appraisers added context and explanation through a free-form General Addendum, which provided flexibility when a standard data field did not fully capture the nuances of a particular property or assignment.
Under UAD 3.6, that flexibility is now built directly into the report structure itself through section-specific commentary fields, which keeps all relevant analysis organized and immediately accessible to reviewers.
The UAD 3.6 reporting structure is notably more granular than its predecessor. The redesigned URAR captures data at a level of detail that legacy forms did not require, including:
- Room-level information
- Separate interior and exterior quality and condition ratings
- Component-level update status
- Energy efficiency features
- Disaster mitigation characteristics
Every structured data selection you make is visible, machine-readable, and subject to automated review.
Because of this expanded granularity, consistency between your structured data inputs and your narrative commentary is more important than ever. Ensuring that your narrative and your data selections align is a straightforward way to demonstrate that your report clearly and accurately sets forth the appraisal.
The practical takeaway: In the UAD 3.6 environment, “not misleading” means your narrative commentary and your structured data selections must tell the same story. Review both layers of your report before submission, not just the text.
Standards Rule 2-1(b): Sufficient Information for Intended Users
SR 2-1(b) requires that you provide your client and other intended users with enough information to properly understand the appraisal report. This has always required you to communicate “on their level,” with consideration for the specific issues involved in the assignment.
Clients and intended users will require more or less information depending on many factors, including:
- Their level of sophistication or experience with appraisals and appraisal reports
- The intended use of the appraisal and report
- Relevant property characteristics
- The complexity of the appraisal process
Just as the scope of work varies from assignment to assignment, the level of report detail also varies. USPAP only requires you to write the report with intended users in mind, not the general public.
What changes under UAD 3.6 is where and how you provide that sufficient information.
Under the legacy system, appraisers satisfied SR 2-1(b) by incorporating narrative commentary in a General Addendum, which served as a flexible space for market analysis, adjustment support, and property descriptions that extended beyond the standard form fields.
Under UAD 3.6, that commentary is now integrated directly into specific sections of the report.
The redesigned URAR provides dedicated commentary fields within each topical section, including Site, Improvements, Additional Structures, Sales Comparison, and Rental Analysis. Related data, photos, and commentary are grouped together in the same section, so that a reviewer looking at site issues finds all relevant information in one place.
This organizational approach benefits intended users by making the report more navigable and the analysis easier to follow. It also asks appraisers to think about their commentary in a more targeted way. Rather than gathering all narrative explanation in one location at the end of the report, the new structure invites you to place your analysis alongside the data it supports.
In practice, that means:
- Writing targeted, section-specific commentary that directly supports the structured data in that section.
- Being concise and analytical, since the new format is designed to present information efficiently.
- Ensuring that every section requiring explanation contains that explanation within the section itself, so intended users can follow your reasoning as they move through the report.
This approach reinforces the spirit of SR 2-1(b) by making the report more transparent and easier for intended users to understand.
Standards Rule 2-1(c): Disclosing Assumptions, Extraordinary Assumptions, Hypothetical Conditions, and Limiting Conditions
SR 2-1(c) requires that you “clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.” USPAP also requires, under Standards Rules 2-2(a) and 2-2(b), that extraordinary assumptions and hypothetical conditions be stated clearly and conspicuously, meaning they must be unavoidably noticeable to any intended user who reads the report.
Understanding the differences among these four categories remains as important as ever.
Assumptions
There is no longer a formal USPAP definition for assumption. The Appraisal Standards Board removed it in 2018, as its use is not intended to differ from the general English meaning of the word. Assumptions are made in virtually every appraisal assignment and must still be disclosed under SR 2-1(c).
Extraordinary Assumptions
USPAP defines an extraordinary assumption as: “an assumption, as of the effective date, which, if found to be false, could alter the appraiser’s opinions or conclusions.”
While an ordinary assumption may apply to virtually any assignment, an extraordinary assumption is directly tied to a specific assignment. If you later discover it to be false, your value opinion could change as a result. That direct relevance to the specific assignment is what makes it “extraordinary.”
SR 2-1(c) requires that appraisers disclose all extraordinary assumptions clearly and accurately, and that the report state that their use might have affected the assignment results. Under UAD 3.6, the redesigned URAR includes structured fields specifically designed to capture and present these disclosures, making them machine-readable and prominently visible to reviewers.
This directly supports the USPAP requirement for conspicuous disclosure.
Hypothetical Conditions
USPAP defines a hypothetical condition as: “a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.”
The most common example is the appraisal of a property with proposed improvements as of a current effective date. When you appraise a home that has not yet been built, you know with certainty that the improvements do not exist as of the effective date, yet the appraised value reflects the completed improvements. This is a hypothetical condition.
A complete and compliant disclosure goes beyond stating “subject to completion per plans and specifications.” To fully satisfy SR 2-1(c), you must also explicitly identify the hypothetical condition and note that its use may have affected the assignment results. For example:
“The appraised value is subject to completion of the improvements per plans and specifications, based upon the hypothetical condition that the improvements were complete as of the effective date of the appraisal. The use of this hypothetical condition may have affected the assignment results.”
Under UAD 3.6, this type of disclosure is supported by dedicated structured fields within the URAR, ensuring it is prominently presented and clearly associated with the relevant section of the report.
Limiting Conditions
Limiting conditions define the boundaries of the appraisal assignment and the appraiser’s scope of responsibility. With the retirement of the legacy static forms, it is important to understand that the standard limiting conditions and certifications have been modernized and integrated into the dynamic URAR framework under UAD 3.6.
The substance of these conditions has not changed, but their presentation has been updated to align with the new data-driven reporting structure.
How UAD 3.6 Supports USPAP Compliance
UAD 3.6 represents a significant evolution in how appraisal information is structured, reviewed, and relied upon. The new reporting framework is designed to make it more straightforward for appraisers to demonstrate compliance with SR 2-1 by aligning the structure of the report with the substance of what USPAP requires.
| What UAD 3.6 Changes | How It Supports USPAP SR 2-1 |
| Section-specific commentary fields replace the General Addendum | Analysis is placed directly alongside the relevant data, making reports easier for intended users to follow (SR 2-1(b)) |
| Structured data fields for disclosures | Extraordinary assumptions and hypothetical conditions are prominently presented and machine-readable (SR 2-1(c)) |
| Room-level and component-level data | Greater granularity supports clear, consistent, and accurate reporting (SR 2-1(a)) |
| UAD Compliance API pre-submission check | Appraisers can verify data completeness and consistency before submission (SR 2-1(a)) |
| Single dynamic URAR for all property types | One unified structure supports consistent reporting across all assignment types (SR 2-1(a)) |
Preparing for UAD 3.6: Practical Steps for Appraisers
The mandatory deadline of November 2, 2026 is closer than it may appear. Here is how to prepare now:
1. Take UAD 3.6 Training
Both Fannie Mae and Freddie Mac have published appraiser-specific training courses that qualify for continuing education credit. McKissock’s URAR Certification program is specifically designed to help appraisers navigate the new reporting structure. is specifically designed to help appraisers navigate the new reporting structure.
2. Review the URAR Reference Guide
Appendix F-1, available on both GSE websites, provides field-by-field guidance on how to complete the new URAR. Bookmark it and consult it regularly, as guidance is updated periodically.
3. Coordinate with Your Software Provider
Confirm that your appraisal software is UAD 3.6-ready and that you understand how to use the UAD Compliance API to verify your reports before submission.
4. Adapt Your Writing Approach
Begin practicing the habit of writing commentary within the relevant section of the report, placing your analysis alongside the data it supports. This is the most meaningful workflow adjustment most appraisers will make during the transition.
5. Revisit your Extraordinary Assumption and Hypothetical Condition Language
Review how you currently disclose these items and consider how they will translate into the structured fields of the new URAR, particularly if you are completing Desktop or Hybrid assignments.
The Bottom Line
The three basic requirements of USPAP Standards Rule 2-1 have not changed. Your report must not be misleading, it must contain sufficient information for intended users, and it must clearly and conspicuously disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions. These obligations are as fundamental today as they were when USPAP was first adopted.
What has changed is the environment in which you fulfill them. UAD 3.6 introduces a dynamic, data-driven reporting structure that brings greater precision, better-organized analysis, and more intentional disclosure practices to the appraisal process. Appraisers who take the time to understand how the three requirements of SR 2-1 map onto the new URAR will be well positioned to serve their clients and intended users with confidence.
Editor’s note: This post was originally published on May 23, 2024, and has been substantially revised in July 2026 to reflect the UAD 3.6 and Forms Redesign transition. The mandatory compliance deadline for UAD 3.6 is November 2, 2026, for all appraisals submitted to Fannie Mae and Freddie Mac.
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