The Federal Housing Administration, which receives the largest share of mortgage purposes amongst the authorities guarantors, is adopting the UAD 3.6 appraisal format going into place in the conforming market.
The new UAD 3.6 Uniform Residential Appraisal Report is changing conventional boilerplate types that are at the moment getting used, corresponding to the Fannie Mae 1004.
But heretofore, this variation was restricted to the conforming markets, with a restricted manufacturing section beginning in September, working its approach as much as a deliberate necessary adoption by November 2026.
This transfer by the FHA is welcome information, mentioned Elizabeth Green, senior vice chairman, valuation options at ServiceLink. Green is also the chair of the Property and Valuation Services Community for the Mortgage Industry Standards Maintenance Organization, which put collectively the new Appraisal Procurement Dataset Specification.
“The implementation by FHA will also imply extra efficiencies in the course of when transactions transfer from typical to FHA and vice versa throughout the origination course of, which in flip impacts any corresponding valuations which can be already in play when the mortgage kind adjustments,” she mentioned.
The government-sponsored enterprises included necessities that the FHA and different businesses like the Department of Veterans Affairs have into the new appraisal formal, in line with Green.
NMN reached out to the VA for remark relating to its plans however had not acquired a response by deadline.
The most up-to-date Mortgage Bankers Association Weekly Application Survey provides FHA a 19.1% market share with VA at 13.3%. USDA has the smallest share at 0.5%. Conventional purposes make up two-thirds of the market, however MBA doesn’t break these out into conforming and nonconforming.
Nonconforming lenders are also anticipated to undertake the new URAR, however every investor has its personal necessities and whereas many mirror the government-sponsored enterprises, they will diverge.
The FHA, in data bulletin 2025-42, mentioned its adoption of UAD 3.6 will start in early Spring 2026. A timeline for the transition, in addition to up to date insurance policies and know-how specs, shall be introduced later this 12 months.
The FHA mentioned the adoption of the new appraisal format would construct on its collaboration with the government-sponsored enterprises, in addition to the funding by its father or mother company the Department of Housing and Urban Development in the FHA Catalyst platform throughout President Trump’s first time period.
“The implementation of this industry-wide initiative will protect FHA’s alignment with the {industry} and strengthen its collateral threat administration capabilities,” the memo mentioned.
However, like in the conforming market’s adoption of the new format, FHA lenders may discover themselves working twin processes for a time as the company will nonetheless settle for value determinations utilizing UAD 2.6 throughout the transition interval.
“FHA is dedicated to offering stakeholders with cheap time to develop, check, and put together their know-how options earlier than necessary adoption, recognizing {that a} longer timeframe is important to accommodate required know-how updates,” the memo mentioned.
