Summary
- Understanding UAD and URAR: The UAD standardizes appraisal fields and definitions for Fannie Mae and Freddie Mac loans, while the URAR is the corresponding appraisal report.
- URAR Redesign Initiative: The GSEs are updating the URAR to a dynamic, flexible form, replacing multiple appraisal forms with one intelligent document.
- Reasons for Update: Current forms date back to 2005 and, despite the UAD introduction in 2010, remain largely unchanged. The redesign aims for efficiency and adaptability.
- Benefits of Changes: The new URAR will streamline appraisal processes, organize data better, include standardized property descriptions, and improve readability with fewer abbreviations and enhanced photo placement.
There has been a lot of talk about the Uniform Appraisal Dataset (UAD) and Uniform Residential Appraisal Report (URAR) redesign initiative, and how it will make life easier for appraisers. What exactly does this mean? In this post, we’re providing an overview of the UAD and URAR, what’s changing, and what benefits these changes will bring.
What is the UAD?
The Uniform Appraisal Dataset (UAD) specifies what fields are required for individual real estate appraisal forms. It also standardizes definitions, abbreviations, ratings, inputs, and value ranges for certain fields. Introduced in 2010, the UAD was created to improve the consistency and quality of property appraisals completed for loans delivered to the GSEs (e.g., Fannie Mae and Freddie Mac).
What is the URAR?
The Uniform Residential Appraisal Report (URAR) is the report that’s used for appraisals done for Fannie Mae and Freddie Mac home loans. Starting in 2018, the GSEs have been working to give the UAD and URAR a “makeover” which will result in a new dynamic URAR. The current appraisal forms (1004, 1075, 1073, 2055) will be retired and replaced by one flexible, intelligent form that appraisers will complete using vendor software.
Why update the appraisal forms?
The mortgage appraisal forms we use today were designed in 2005 using technology and mortgage processes in place at the time. Despite the UAD being introduced in 2010, the mortgage appraisal forms have largely remained unchanged, and several property types were not part of the UAD. Given the changes taking place everywhere else, it only seems logical to improve the UAD and redesign the URAR to make it more dynamic and efficient.
The new UAD and URAR are currently in the works, and changes are expected to begin rolling out in late 2024 or 2025. Since the URAR is probably the most-used report by appraisers, the overhaul will have a widespread impact on the profession. It will be important for appraisers to keep abreast of these changes as they unfold.
How will these UAD and URAR changes be beneficial?
Here’s a summary of the new UAD and URAR changes and the benefits they will bring:
- A redesigned, dynamic URAR will replace the numerous and separate appraisal forms and can be used for different property types, such as two-to-four units, condominiums, and manufactured homes, and for different scopes of work, such as interior and exterior inspections, updates, and completion assignments.
- The new URAR will be better organized and populated based on the property type and characteristics.
- The standardized data in the new UAD will allow appraisers to better define the property (outbuildings, additional units, site influences, energy efficient and green features, etc.).
- Concerns that require attention will be easily identified in each section of the report instead of being buried in an addendum.
- Photographs will be included in relevant sections to make descriptions easier for appraisers and enhance reader understanding.
- The new Sales Comparison Approach section of the URAR will contain significantly fewer abbreviations and be easier to read.
- The UAD will be expanded to cover all residential property types, including: single-family, condominium, cooperative, manufactured home, and 2- to 4-unit.
Advance your knowledge
Learn more about Fannie Mae and Freddie Mac’s appraisal requirements with our CE course: GSE Appraisal Requirements and Guidelines.
Stay up-to-date on changes to the UAD and URAR with McKissock
When changes occur to the UAD and URAR, McKissock is dedicated to helping you stay up-to-date and knowledgeable. And with the Unlimited Learning Membership, you’ll not only get full access to hundreds of appraisal courses, certification courses, and our Learning Library, but you’ll also get access to our Pro-Series Webinars, including those with representatives from Freddie Mac and Fannie Mae where you can gain more insight and have your questions answered.
Editor’s Note: This post was originally published on July 29, 2022 and updated in January 2024.
